The Single Currency – the Euro €

1. The Single Currency – the Euro € An introduction

2. Before the Euro • Before the Euro each country in the EU had it’s own currency. • Germany - the Deutschmark • France – the Franc • Italy – The Lira • Spain – the Peseta • Ireland – the Punt • So to spend money in any of these countries you had to change your own currency into the other countries currency. So French Person visiting Germany -Francs to Deutschmarks or Irish family holidaying in Spain - Punts to Pesetas and this cost money

3. 2002 – the Euro € • In 2002 after a great deal of economic preparation 11 countries did away with their own currencies and instead started to use the Euro. • So Germans found that instead of having DMs they now had €s. For every 1.95 DMs they now had 1€. • The Irish, no more Punts, instead €s. For every Punt they swopped they gained 1.25€

4. Effects of the Single Currency • Trade was easier • No more currency exchange between the 11 countries, so saving money • Lower interest rates for many countries. • No varying values of currency, making the costs of importing and exporting more predictable • Original Members of the € • Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal, and Spain • Other countries have since joined; • Cyprus, Greece, Malta, Slovakia, Slovenia, Estonia

5. Why did Britain say no to joining • Britain could have joined the Euro, but instead stayed out and we kept the £. Why? • We did not want to lose control over setting our own interest rates • We had very different economies from Germany and France • British people did not want to lose the £ • Euro Notes and coins