You are here
A look back at the euro's 20 years
TWO decades ago, the euro currency was launched, at first existing virtually for accounting and financial transactions and then three years later, as notes and coins.
Here is a recap of its defining moments.
On Dec 31, 1998 on the eve of the euro launch as planned in the European Union's Maastricht Treaty, the definitive conversion rates were revealed to great fanfare in Brussels: one euro will buy 1.95583 Deutsche Marks, 6.55957 French francs and 1.936,27 Italian lire.
Tens of thousands of people in banks and European stock exchanges immediately got to work to ensure everything was ready and in place when markets reopen on Jan 4. Shops that displayed prices in both currencies with approximate exchange rates updated their tags.
On Jan 1, 1999 the euro became the official currency for 291 million people in 11 countries - Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, The Netherlands, Portugal and Spain. The new money can be used for virtual bank operations, payments by cheque, traveller's cheque and bank card.
January 4 was the euro's baptism on European exchange markets. One euro exchanged for more than US$1.18. But weeks later, it slid to less than a dollar and at the end of October, it hit its lowest rate ever, at US$0.823.
On Jan 1, 2001 Greece became the 12th country to adopt the single currency.
Coins and notes
A year later, the euro became tangible - some 15 billion notes and more than 50 billion coins were put into circulation, shaking up the lives of 304 million Europeans.
People familiarised themselves with the single currency, sometimes using pocket calculators to make it easier to work out conversions. Unlike country-specific currencies, the euro notes do not have national symbols, opting instead for bridges and windows. A period of two currencies in circulation in each country in the eurozone began as national currencies were gradually phased out, lasting until Mar 1. On July 15, the euro reached parity with the dollar again.
In 2003, Sweden, in a referendum, joined Denmark and Britain in rejecting the single currency. Elsewhere, new EU member countries adopted the single currency - Slovenia in 2007, Cyprus and Malta in 2008, Slovakia in 2009, Estonia in 2011, Latvia in 2014 and Lithuania in 2015.
On July 15, 2008 the euro reached a historic exchange rate high, trading at US$1.6038 as the US was rocked by a sub-prime mortgage crisis. That November, the eurozone entered a recession lasting a year. In 2010, the EU was mired in a debt crisis. In May, the EU and the International Monetary Fund (IMF) provided a 110-billion-euro (S$172 billion) bailout for Greece, which in turn committed to a severe austerity plan. A month later, the euro plunged below US$1.20. In November, Ireland, where banks were crippled by debt, also obtained an EU/IMF bailout plan of 85 billion euros. Portugal obtained a 78-billion-euro international bailout in May 2011.
Saving the euro
On July 25, 2012 Spain's long-term interest rate soared above 7.6 per cent, sparking fears of a euro collapse. A day later, European Central Bank (ECB) chief Mario Draghi promised to do "whatever it takes to preserve the euro". In August, the ECB bought back in one week bonds of eurozone nations costing 22 billion euros to support Italy and Spain.
The EU accepted in October to wipe a part of the Greek debt along with a new set of loans.
In May 2014, the single currency neared US$1.40, hitting exports. Then, months later, it came close to US$1.05 in a tumbling that was linked to the buying of assets by the ECB to support the economy. In July the next year, Greece obtained a third bailout aimed at keeping it from crashing out of the eurozone, or "Grexit".
'Bin Laden' banknotes
In 2016, the ECB said it planned to stop issuing the 500-euro note by the end of 2018. The note was known as the "Bin Laden" and believed to be favoured by criminals for money laundering and terrorist financing. AFP