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About euro

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  1. 1. EURO Executed by Tetiana Olinycheno The 2nd year student of MEO program by Specialty “Economic and Organization of Enterprises”
  2. 2. What does it mean “euro”? The euro is the single currency shared by (currently) 18 of the European Union's Member States, which together make up the euro area. The euro is the second largest reserve currency as well as the second most traded currency in the world after the United States dollar. The euro zone is the second largest economy in the world.1
  3. 3. History of the euro The1st step • The currency was introduced in non-physical form (electronic transfers, banking, etc.) at midnight on 1 January 1999, when the national currencies of participating countries (the Eurozone). On the first day of trading, 5 January, the euro climbed to 1.19 US$. The2nd step • Since 1 January 2002 the euro has been circulating in physical form, as banknotes and coins. The euro is not the currency of all EU Member States.
  4. 4. The euro and Economic and Monetary Union All EU Member States form part of Economic and Monetary Union (EMU), which can be described as an advanced stage of economic integration based on a single market. It involves close co-ordination of economic and fiscal policies and, a single monetary policy and a single currency - the euro. These conditions are known as the 'convergence criteria' (or 'Maastricht criteria') and include low and stable inflation, exchange rate stability and sound public finances.
  5. 5. Who manages it? • With the launch of the euro monetary policy became the responsibility of the independent European Central Bank (ECB), which was created for that purpose, and the national central banks of the Member States having adopted the euro. Together they compose the Eurosystem.
  6. 6. Who uses it? The euro is the currency of the 333 million people who live in the 18 euro area countries. It is also used, either formally as legal tender or for practical purposes, by other countries such as close neighbours and former colonies. The euro has become the second most important international currency after the dollar.
  7. 7. Global currency reserves
  8. 8. Why do we need it? Apart from making travelling easier within the EU, a single currency makes economic and political sense. The framework under which the euro is managed underpins its stability, contributes to low inflation and good sound public finances. A single currency is also a logical complement to the single market and contributes to making it more efficient. Last but not least, the euro gives the EU’s citizens a tangible symbol of their European identity.
  9. 9. Which countries have adopted the euro - and when? Year Country 1999 Belgium, Germany, Ireland, Spain, France, Italy, Luxembourg, the Netherlands, Austria, Portugal and Finland 2001 Greece 2002 Introduction of euro banknotes and coins 2007 Slovenia 2008 Cyprus, Malta 2009 Slovakia 2011 Estonia 2014 Latvia
  10. 10. Eurozone map in 1999 - 2002
  11. 11. Economic and Monetary Union of the European Union (EMU 2014) Two countries (Denmark and the United Kingdom) have ‘opt-out’ clauses in the Treaty exempting them from participation In February 2013, the government of Lithuania approved a plan for euro adoption in 2015. However, Lithuania has not yet met all the economic criteria necessary to join the euro.
  12. 12. The United Kingdom's currency is the pound sterling and it has not declared plans to adopt the euro in the foreseeable future. British public opinion has consistently opposed joining the euro. Opinion polls 19–21 December 2008, 71% of respondents said they would vote No whilst 23% of participants would vote Yes, and 6% were undecided. Denmark uses the krone as its currency and does not use the euro, having negotiated an opt-out from participation under the Edinburgh Agreement in 1992. In 2000, the government held a referendum on introducing the euro, which was defeated
  13. 13. Convergence criteria of Lithuania Assessme nt month Country inflation rate Budget deficit to GDP Debt-to- GDP ratio ERM II member Long- term intere st rate 2012 Repo rt Reference values max. 3.1% (31 Mar 2012) max. 3.0% (Fiscal year 2011) max. 60%, or decreasing (Fiscal year 2011) min. 2 years (31 Mar 2012) max. 5.80% (31 Mar 2012) Lithuania 4.2% 5.5% 38.5% 28 June 2004 5.19% April 2013 Reference values max. 2.5% (as of 31 Mar 2013) max. 3.0% (Fiscal year 2012) max. 60%, or decreasing (Fiscal year 2012) min. 2 years (as of 31 Mar 2013) max. 4.81% (as of 31 Mar 2013) Lithuania 2.8% 3.2% 40.7% 28 June 4.53%
  14. 14. Benefits of the EURO 1. Transaction Costs 2. Price Transparency 3. 3. Eliminating Exchange Rate uncertainty 4. 4. Improvement in Inflation Performance. 5. 5. Euro could emerge as a global trading currency 6. Inward investment 7. Economizing on foreign currency reserves
  15. 15. Potential adoption by other countries • EU – Bulgaria, Croatia, Czech Republic, Denmark, Lithuania, Hungary, Poland, Romania, Sweden, United Kingdom. • Non- EU Iceland, Kosovo, Montenegro.
  16. 16. Bibliography 1. .htm 2. "By the third protocol to the Cyprus adhesion Treaty to EU and British local ordinance“ 3. EMU: A Historical Documentation (European Commission) 4. Hacker, Björn (2013): On the Way to a Fiscal or a Stability Union? The Plans for a »Genuine« Economic and Monetary Union, FES, online at: 5. 6.
  17. 17. Thank you for your attention Dziękuję za uwagę Дякую за вашу увагу Grazie per la vostra attenzione Vielen Dank für Ihre Aufmerksamkeit დიდი მადლობა hvala