Introduction of the euro

Introduction of the euro

The introduction of the euro took place principally between 31 December 1998, when the exchange rates between the euro and legacy currencies in the Eurozone became fixed, and early 2002, when euro notes and coins were introduced and the legacy currencies withdrawn.

Since its initial introduction the euro has expanded further.

Background (1992-1999)

The euro was established by the provisions in the 1992 Maastricht Treaty on European Union that was used to establish an economic and monetary union. In order to participate in the new currency, member states had to meet strict criteria such as a budget deficit of less than 3% of their GDP, a debt ratio of less than 60% of GDP, low inflation, and interest rates close to the EU average.

Economists that helped create or contributed to the euro include Robert Mundell, Wim Duisenberg, Robert Tollison, Neil Dowling and Tommaso Padoa-Schioppa. (For macro-economic theory, see below.)

Due to differences in national conventions for rounding and significant digits, all conversion between the national currencies had to be carried out using the process of triangulation via the euro.

The rates were determined by the Council of the European Union, based on a recommendation from the European Commission based on the market rates on 31 December 1998, so that one ECU (European Currency Unit) would equal one euro. (The European Currency Unit was an accounting unit used by the EU, based on the currencies of the member states; it was not a currency in its own right.) These rates were set by Council Regulation 2866/98 (EC), of 31 December 1998. They could not be set earlier, because the ECU depended on the closing exchange rate of the non-euro currencies (principally the pound sterling) that day.

Preparation for transition to the euro

The currency was introduced in non-physical form (traveller's cheques, electronic transfers, banking, etc.) at midnight on 1 January 1999, when the national currencies of participating countries (the Eurozone) ceased to exist independently in that their exchange rates were locked at fixed rates against each other, effectively making them mere non-decimal subdivisions of the euro. The euro thus became the successor to the European Currency Unit (ECU). The notes and coins for the old currencies, however, continued to be used as legal tender until new notes and coins were introduced on 1 January 2002.

Beginning on 1 January 1999, all bonds and other forms of government debt by Eurozone nations were denominated in euro.

The designs for the new coins and notes were announced between 1996 and 1998, and production began at the various mints and printers early in 1999. The task was large, and would require the full three years. In all, 7.4 billion notes and 38.2 billion coins would be available for issuance to consumers and businesses on 1 January 2002. [

On 1 December 2007, the Central Bank of Malta issued for sale the first Maltese Euro Set. This set was targeted for collectors and contains the eight Maltese euro coins in BU quality, together with a commemorative ingot and a certificate, enclosed in a luxury wooden case. Only 40,000 sets were made and the initial price of each set was €35. [cite web | url = | title = The First Official Maltese Euro Set 2008 | publisher = Central Bank of Malta | accessdate= 2008-05-03] As expected, the demand from collectors was huge and the sets were all sold out in span of few weeks.Fact|date=May 2008

Malta issued 33,000 business starter kits and 330,000 starter kits for the general public along with 40,000 sets for the euro collectors in late 2007. The latter are BU quality coins packed in a luxury wooden box and come with a numbered certificate.

Maltese coins which were current at the time of the euro transition may be exchanged through February 1, 2010.


Will join Eurozone on 1 January 2009.


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