EURO

The euro (symbol: €; banking code: EUR) is the currency of twelve European Union member states

The Twelve Austria Belgium Finland France Germany Greece The Republic of Ireland Italy Luxembourg The Netherlands Portugal Spain

History 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

The euro is administered by the European System of Central Banks (ESCB), composed of the European Central Bank (ECB) and the Eurozone central banks operating in member states

The definitive values in euro of these subdivisions (which represent the exchange rates at which the currency entered the euro) are as follows:

Country Rate Austria 13.7603 Belgium 40.3399 Finland 5.94573 France 6.55957 Germany 1.95583 Greece 340.750 Ireland 0.787564 Italy 1936.27 Luxembourg 40.3399 Netherlands 2.20371 Portugal 200.482 Spain 166.386

A New Reserve Currency

The euro will probably become one of the major global reserve currencies. Currently, international currency exchange is dominated by the American dollar.

If the euro were to become a reserve currency it would benefit member countries by lowering the on their debts.

The Euro and Oil

The Eurozone consumes more imported petroleum than the United States. This would mean that more euros than US dollars would flow into the OPEC nations, but oil is priced by those nations in US dollars only

There have been frequent discussions at OPEC about pricing oil in euros, which would have various effects, among them, requiring nations to hold stores of euros to buy oil, rather than the US dollars that they hold now

Euro Exchange Rate Against USD

After the introduction of the euro, its exchange rate against other currencies, especially the US dollar, declined heavily.

Advantages of the Euro

Elimination of exchange-rate fluctuations Transaction costs Price parity Increased trade across borders Increased cross-border employment Simplified billing Expanding markets for business Financial market stability Macroeconomic stability Lower interest rate Structural reform for European economies