20 years have passed since the introduction of the euro on January 1, 2022.
In 2002, the euro was introduced in the form of banknotes and coins in 12 European Union countries: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain.
Due to the time difference, The inhabitants of the French territory of Reunion, an island in the Indian Ocean, were the first to inaugurate the new currency on 1 January 2002, 20.00 GMT. Two hours later, the euro entered the European continent, first in Finland and Greece at 22.00 GMT, and an hour later in most other countries that have joined the new currency: Germany, Austria, Belgium, Spain, France, Italy, Luxembourg and the Netherlands. Ireland and Portugal followed, starting at 00.00 GMT, according to ecb.europa.eu and Agerpres.
The euro had become the official currency of 11 EU member states on 1 January 1999, being introduced as a virtual currency for carrying out payment transactions that did not involve banknotes and coins, as well as for accounting purposes, according to ec.europe.eu. Until 1 January 2002, the old currencies, considered subunits of the euro, continued to be used for cash payments.
The history of the euro begins on July 1, 1990, when the first phase of economic and monetary union (EMU) began. On January 1, 1993, the Single Market was completed, and the preparatory phase of economic and monetary union began on January 1, 1994. On 1 November 1993, the composition of the ECU was determined.
The second phase of EMU began with the establishment of the European Monetary Institute on 1 January 1994. Member States acted to combat budget deficits and achieve economic convergence. On 15 and 16 December 1995, the European Council adopted the name “euro” for the single currency.
The name of the new currency was an important element in preparing for the transition to the single currency, partly determining the acceptability of Economic and Monetary Union by the public, according to http://publications.europa.eu.
The decision on the irrevocable entry into the third stage of EMU was taken in 1996, and on 2 May 1998, at the Brussels summit, EU leaders approved the list of the 11 countries participating in the first wave: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. The United Kingdom, Denmark and Sweden have opted to postpone their participation in the euro.
Monetary policy is the same for the whole euro area and is decided by the European Central Bank, which began operations in July 1998 in Frankfurt. Public debt is issued in a single currency and financial markets operate in euros. As of January 1, 2000, banks issue euro checkbooks, and bank customers can pay with both checks and credit cards.
The euro is currently the single currency adopted by 19 of the 27 Member States of the European Union, which make up the euro area. These are: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia and Spain. The euro is also used, either as a legal means of payment or for practical reasons, by a number of other countries, such as neighboring states or former colonies. In total, it is used by around 343 million European citizens.
Given these figures, it is not surprising that the euro has become the second most important international currency after the dollar. Moreover, in terms of cash in circulation, it has even surpassed the American currency.
Euro coins have the following eight values: 1 cent, 2 cents, 5 cents, 10 cents, 20 cents, 50 cents, 1 euro and 2 euros. In turn, the euro banknotes have the values: 5 euros, 10 euros, 20 euros, 50 euros, 100 euros, 200 euros and 500 euros.
Romania does not meet the criteria for adopting the euro
All EU Member States are, in principle, obliged to introduce the euro once they meet the convergence criteria. The only exception is Denmark, which has a “non-participation clause” in the EU treaties and is exempt from the obligation to adopt the euro, according to consilium.europa.eu.
Thus, Romania is also among the EU member states that have the obligation to adopt the Euro currency, which means practically participating with full rights in the Economic and Monetary Union, once all the necessary conditions are met, respectively the nominal convergence criteria (price stability, public finances, exchange rate stability, long-term interest rates), legal and real (indicators, such as GDP / capita, labor productivity, energy intensity, etc.), notes the website of the National Bank of Romania, www.bnr.ro.
Convergence reports, prepared every two years by the European Central Bank and the European Commission, place increasing emphasis on real convergence. Therefore, in the run-up to the adoption of the single currency, the national economy needs to make the necessary adjustments for integration into the euro area, marked by extensive structural reforms, with effects on its overall competitiveness.
At the time of the 2020 European Central Bank Convergence Report, Romania met only some of the nominal and legal convergence criteria, according to the NBR.
The Convergence Program 2021-2024 states that Romania remains committed to joining the euro area, but the Government’s efforts are focused on minimizing the negative social and economic effects of the COVID-19 pandemic.