New Year always brings special emotions for people all over the world. However, for the European Union, this date is even more remarkable. Twenty-five years ago, the Euro was introduced to some countries across the continent, which has revolutionized the whole trading and global financial system. The Euro history brings interest not only to EU’s citizens but also traders worldwide.
Introduction Of Euro: History Before 1999
The European Union is the most tight union between almost thirty countries. Its development was focused on complex integration, unlike focusing specifically on trading. The EU has been bringing together multiple countries, unlike any other organization, for over fifty years. Right now, the EURUSD currency pair is one of the most traded assets worldwide.
Germany, France, Italy, and Benelux countries highly appreciated the idea of economic and monetary union. It could have brought the whole continent to a new level, making trade and partnerships between the member countries even more accessible.
As you can see, Euro history does not begin on January 1st, 1999. It was a long process, disturbed by numerous economic obstacles during the post-war period. One of the most significant was the oil crisis due to an even higher dependency on this commodity compared to today. Eventually, the fundamental milestone of the future Euro’s introduction was the launching of the European Monetary System in 1979. This system coordinates monetary policies between EU countries.
How Does Euro Impact Trading?
People interested in trading on the European market can decline the word “integration” in many ways. Traders can also notice it. Besides indices gathering together equities from one country (DAX40, CAC40, IBEX35,) the European Union also has STOXX50, where traders can analyze 50 prominent companies from the EU in a complex way.
Trading in the EU is more accessible for those countries that use the same currency. Even if all member countries can count on coordinated economic and fiscal policies, they can’t forget about the spread during the exchange of currencies.
According to the research published by the European Central Bank Occasional Paper in October 2021, exports from member countries before 1999 to the second wave of members rose up to 30 percent. It shows the impact of the European Union and the common currency.
Theoretically, every member of the EU has to introduce the Euro at some point. However, the procedure and preparation for successful monetary transformation take years, and some countries, such as Poland, Hungary, and the Czech Republic, still need to be ready for that. There are some exceptions. Denmark has been a member of the European Union since 1973 but has negotiated an opt-out from the Euro. That’s why traders can see the Danish Krone in the market.
The Development Of Euro Across Europe
Obviously, the adoption of the common currency takes time to happen. The same story goes with the Euro. History of the EU’s currency is turbulent, especially regarding its adoption.
On January 1st, 1999, the Euro was introduced in several countries. However, to make the transformation smoother, it was initially called an “invisible” currency because it was used only for digital transfers and payments. Remember that in 1999, they weren’t as common as nowadays. After three years, the European Union launched coins and banknotes for the Euro, still the most significant cash changeover in history.
Except for six founding countries, in 1999, the Euro was adopted by Austria, Finland, Ireland, Portugal, and Spain. During these 25 years, several other countries were introduced to the European Union (10 countries joined in 2004), and some already adopted the Euro. Croatia is the most recent newcomer, switching from the previously used kuna.
Twenty-five years ago, the whole world of finances significantly changed. The European Union puts integration in the very first place, which naturally comes together with globalization. Euro is not only a vital financial asset in Europe – both individual and corporate traders worldwide pay attention to the developments of this currency.
