The History of the Eurodollar

Most European Union member countries have accepted the Euro as their currency.

The European Union (EU) features 27 countries as of October 2010. Sixteen of the member states use a common currency known as the Euro. The development of the Euro was a goal of the EU, and although not established until 1999, a common currency became an official objective in 1969.

1970s

The EU began a process to adopt a single European monetary unit for all member countries in 1970. By 1979, the European monetary system featured an exchange rate mechanism and a quasi-currency averaging member country currency value.

1980s

The Single European Act (SEA) was adopted in 1987, providing for establishing a common internal market between members. Two years later, an EU council approved a formal plan for adoption of an Economic and Monetary Union.

1990s

Creation of the Euro was ultimately achieved in three stages. In 1990, cooperation on economic policy between banks and member countries began. Plans for a European Central Bank and integration of all EU member state monetary systems were adopted. In 1998, it was agreed that 11 countries were prepared to adopt the Euro, and the Euro was first launched as an electronic currency in 1999.

Considerations

The Euro is in use by five countries not officially part of the European Union and has become the second-most circulated currency in the world next to the U.S. dollar.

References

• European Union: European Union A Guide for Americans
• BBC News: A History of the Euro
• Europa: European Monetary Union (EMU) Historical Documentation