The Euro CGG3O

The Euro The euro is the official currency of the eurozone –17 of the 27 member states of the European Union –Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain –Also used in a five other European countries –Montenegro, Andorra, Monaco, San Marino and Vatican City

Powerful Currency Introduced in 1999, coins and notes start circulating in 2002 The second largest reserve currency in the world and the second most traded currency in the world after the US dollar

Why the Euro? Currency exchange rates are a trade barrier – they add uncertainty to international transaction –The Euro makes it much easier to do business between Eurozone countries The Euro is a very strong (and stable) currency, so smaller countries benefit from the being part of a much larger economy

Problems with the Euro Member countries lose economic control –Both fiscal and monetary policy must now be determined centrally

Before the Euro Traveling in Europe meant exchanging money a lot Austrian schilling Belgian franc Dutch guilder Finnish markka French franc German Mark Irish pound Italian lira Luxembourgish franc Monegasque franc Portuguese escudo Sammarinese lira Spanish peseta Vatican lira Greek drachma Slovenian tolar Cypriot pound Maltese lira Slovak koruna Estonian kroon

Before the Euro Exchanging currencies isn’t free – you pay the bank or company a fee for this service It’s possible to eat of a significant portion of your funds just through currency conversion charges

Now The Euro has you covered for most of Europe, but you will still need to buy… –British Pounds –Swiss Francs –Danish Krones –Swedish Kronas –Polish Zlotys –Czech Korunas –Slovakian Korunas –Hungarian Forints –Romanian Leis

The European Debt Crisis Over the past year, Greece, Spain, and Portugal’s economic troubles have caused the Euro to fluctuate The other Eurozone countries are negatively affected by this, but ultimately bear the responsibility for fixing it – France and Germany agreed yesterday to boost the eurozone's rescue fund to €2 trillion