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200 euros

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100 euro

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10 euro

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5 euro

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Brief introduction of euro currency

European timetable

1999 65438+1October 65438+1October: the European monetary union entered the third stage and the euro was officially born. The European Central Bank has determined a unified monetary policy, and the euro has been used for large-scale settlement between banks, and all financial markets are also settled in euros.

1 99965438+1October1~ 65438+in 20021October1:During the transition between national currencies and the euro, enterprises and individuals can use both currencies at the same time.

June 2002 65438+1 October1:The euro began to be fully used, and the currencies of various countries began to withdraw from the market.

July 1 day, 2002: Euro replaces national currencies and becomes a unified European currency.

The Position of Euro in Future International Trade

In the short term, it mainly depends on the extent to which private investors and central banks transfer assets from other currencies to the euro. Bergsten, director of the American Institute for International Economics, predicts that the amount of such investment transfer will reach about 500 billion to 1 trillion dollars, and the transfer of private investment from dollars will become the mainstream.

1980 ~ 1985), Japanese investors converted 230 billion US dollars of domestic assets into overseas assets expressed in US dollars. As a result, the exchange rate of the US dollar against the Japanese yen rose by 25%, and the average exchange rate against the Group of Ten rose by 75%. Therefore, the trend of large-scale transfer of international capital to the euro may have similar effects: lowering the interest rate of the euro and pushing up the exchange rate of the euro against other currencies.

At present, 50% of international merchandise trade is settled in US dollars, while the trade volume of the United States accounts for 18.3% of the total global trade volume, and the export volume of the European Union only accounts for 13% of the total global export volume. The EU's total import and export trade reached 1 trillion US dollars, accounting for 20% of the world's total trade, and the six core member countries of the EU. Austria's trade volume accounts for 18.9% of the world's total trade volume, while in 1996, the total GDP of the European Union reached 8.4 trillion US dollars, while that of the United States was 7.2 trillion US dollars. Therefore, the EU has advantages over the United States in terms of economic scale and trade volume. If calculated according to the proportion of Deutsche Mark's share in international commodity trade settlement to Germany's share in world exports, the unified euro will increase from 16% to 25%. Therefore, Bergsten pointed out that the euro created by a unified Europe will challenge the status of the US dollar as the dominant currency, which is 10.

In recent years, EU countries have maintained moderate current account surpluses, while the current account deficit of the United States has been going on for 15 years, and the accumulated net foreign debt has reached 1 trillion dollars. An independent European central government will also further open financial markets. All these factors will increase the attractiveness of the euro, but the advantage of the United States lies in its breadth, depth and flexibility in the capital market. This will keep the US dollar as the dominant international currency for a period of time, just like the relative decline of British economy after World War I, the international status of British pound will last for a long time. In the long run, the performance of the euro will depend on the exchange rate policy of the independent European Central Bank and the fiscal budget policies of the governments in the euro zone. Monetary union will help stabilize several key economic indicators in the euro zone. However, due to the lack of time verification, these indicators are not enough to be the guiding basis for formulating economic policies. Therefore, the ECB's monetary policy can only be explored in the dark. In this case, the European Central Bank is likely to cautiously adopt a tight monetary policy with high interest rates. If the policies of countries in the euro zone cooperate with loose fiscal policies, the euro may remain a strong currency for a long time.

The introduction of the euro will also have a great impact on the status of the United States in the IMF. Paragraph l of article 13 of the principles of the international monetary fund stipulates that the main office of the international monetary fund should be located in the territory of the member country with the largest share. The size of the American economy determines that it has the largest share of136.6 billion dollars in the IMF, far exceeding Germany's1/kloc-0.4 billion dollars and France's/kloc-0.0/0.2 billion dollars. However, if the European Economic and Monetary Union can run smoothly, the total share of its member countries in the IMF may exceed that of the United States, so the IMF will have to face the dilemma of moving its headquarters in Washington to Europe or amending its principles. In addition, the determination of SDR will also be affected. Since 1980, the exchange rate of special drawing rights has been determined by the weighted calculation of the exchange rates of five currencies: the US dollar, the German mark, the Japanese yen, the French franc and the British pound. If the Deutsche Mark, the French franc and even the British pound are abolished, the determination of SDR will have to re-select other target currencies.

However, due to the uneven level of economic development of countries within the EU, there has been a strong market and weak currency. Moreover, the unification of the monetary system is a big project that affects the whole body. It is hard to say whether the European Economic and Commodity Market Union can start as scheduled and what impact it will have on the world economy after its operation. The European Central Bank may encounter great resistance when implementing monetary policy tools. The Bundesbank requires the European Central Bank to establish basic reserves, and all countries that join the single currency should follow German monetary policy tools, including minimum reserves, that is, each bank needs to pay part of its deposits to the central bank as a means to control inflation. However, Britain believes that adopting such a monetary policy tool is expensive, and the minimum reserve requirement for banks is actually a tax on banks, which may force some big banks to flee from London's financial center, and London will face the danger of losing its central position. If it is difficult for Britain to play a role in the process of realizing the European monetary union, the importance of the European monetary union will be greatly reduced.

As the EU is a major economic and trade power in the world, its currency will naturally become one of the major exchange and reserve currencies. So, what does the emergence of the euro mean to the dollar that dominates the global foreign exchange market? Economists have two completely different views on this. One view is that replacing the strong Deutsche Mark with the euro without credibility will lead investors to convert more funds into dollars, and investors obviously lack confidence in the ability of the European Central Bank to implement monetary policies such as curbing inflation. However, the unbalanced unification of monetary standards among members of the economic and monetary union will aggravate the instability of the euro. Another view is that the euro, as the main competitor of the US dollar in the international foreign exchange market, will divert some investors of the US dollar and further reduce the share of the US dollar in the international foreign exchange reserves.

The impact of the euro on the share of the dollar in the international foreign exchange market is largely influenced by the changes in the reserve currencies of central banks. At present, the foreign exchange reserves of EU member countries reach 370 billion US dollars, far exceeding those of the United States and Japan, while the gold reserves are more than twice that of Japan and four times that of the United States. There are two main uses of foreign exchange reserves: one is for trade and interest payment; The second is to deal with sudden crisis. After the operation of the economic and monetary union, the demand for foreign exchange reserves of the European Central Bank will be greatly reduced. If all the existing 15 member States of the European Union successfully join the economic and monetary union, 60% of the total foreign trade will become internal trade, and the ratio of foreign exchange reserves to commodity imports will double, from the current 29% to 59%. In fact, it is impossible for all 15 members of the European Union to join the economic and monetary union as scheduled. Therefore, it is impossible for the foreign exchange reserve ratio to rise so significantly. However, after the euro begins to operate, the European Central Bank will still face the situation of excess foreign exchange reserves, and 90% of the foreign exchange reserves of EU countries are US dollars. Therefore, it is very possible for the European Central Bank to sell dollars, which is only to reduce the foreign exchange reserve ratio and to adjust the simplification of the reserve market.

So, how will other central banks respond to the operation of the euro? This mainly depends on the role of the euro in international commodity trade and the ability of the European Central Bank to cope with inflation. The total GDP of the European Union is larger than that of the United States, and the operation of the economic and monetary union will help the European capital market to further scale up and enhance its flexibility. This will intensify the competition between the euro and the dollar in the international currency market, and Japan's existing foreign exchange reserves are almost entirely composed of dollars. If we only consider the diversification of reserve currencies, the central bank will gradually reduce the number of dollars held and increase the number of euros held. Many emerging market countries will follow suit and reduce the exchange rate risk of foreign exchange reserves.

The competition between the euro and the dollar will not be known soon, but it is an indisputable fact that the international monetary system composed of the euro, the dollar and the yen has gradually replaced the international monetary system dominated by the dollar for more than half a century. The share of US dollar in global foreign exchange reserves has dropped from 80% in the early 1970s to 64%, but it still far exceeds that of the United States in the global economy. However, the future status of the euro in the foreign exchange market is still a problem worthy of attention.

The birth process of the euro

If EU integration is an advanced form of EU, then economic and monetary union is another higher level of EU integration. First of all, it requires the economic situation of participating countries to keep pace.

1 On February 7th, 1992, EU leaders signed a treaty in Maastricht, the Netherlands, and decided to start the construction of the third European economic and monetary union at the latest1June 7th+10/October 6th.

With the joint efforts of France and Germany, EU leaders held a meeting in Dublin, Ireland in February 1996, and finally decided 1999, 1, the start date of the European monetary union, and the European unified currency euro will also be put into use on this day. 1On May 2, 1998, the European Union confirmed Belgium, Germany, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal and Finland as the founding members of the Euro.