Together this direct usage of the euro outside the EU affects nearly 3 million people. The euro has been used as a trading currency in Cuba since 1998, Syria since 2006, and Venezuela since 2018. There are also various currencies pegged to the euro (see below). In 2009, Zimbabwe abandoned its local currency and used major currencies instead, including the euro and the United States dollar.
Direct usage
Euro
Euro | Direct usage
It has been used as a trading currency in Cuba since 1998, Syria since 2006, and Venezuela since 2018. It is used as the sole currency of 19 EU member states. It is a currency used within the EU members as well as outside. The euro has been used as a trading currency in Cuba since 1998, Syria since 2006, and Venezuela since 2018
when did the euro come out in spain
user
2002
assistant
what is this ?
user
The euro (symbol: €; code: EUR) is the official currency of 19 of the member states of the European Union.
assistant
are there any inflation risk associated with it ?
user
In the short term, there was a widespread impression in the population of the eurozone that the introduction of the euro had led to an increase in prices, but this impression was not confirmed by general indices of inflation and other studies.
assistant
what are its linguistic issues ?
user
Bulgaria has negotiated an exception; "euro" in the Bulgarian Cyrillic alphabet is spelled as eвро and not eуро in all official documents. In the Greek script the term ευρώ (evró) is used
assistant
are its exchange rates flexible ?
user
Yes - In the years following the Single European Act, the EU has liberalised its capital markets and, as the ECB has inflation targeting as its monetary policy, the exchange-rate regime of the euro is floating.
assistant
what are its direct uses ?
user
Together this direct usage of the euro outside the EU affects nearly 3 million people. The euro has been used as a trading currency in Cuba since 1998, Syria since 2006, and Venezuela since 2018. There are also various currencies pegged to the euro (see below). In 2009, Zimbabwe abandoned its local currency and used major currencies instead, including the euro and the United States dollar.
Euro | Direct usage
The ECB targets interest rates rather than exchange rates and in general does not intervene on the foreign exchange rate markets. This is because of the implications of the Mundell–Fleming model, which implies a central bank cannot (without capital controls) maintain interest rate and exchange rate targets simultaneously, because increasing the money supply results in a depreciation of the currency. In the years following the Single European Act, the EU has liberalised its capital markets and, as the ECB has inflation targeting as its monetary policy, the exchange-rate regime of the euro is floating.
Euro | Flexible exchange rates
Europe Direct is a European information network designated by the European Commission. The target group is all citizens of the European Union.
Europe Direct | Introduction
In Europe, the SEPA Direct Debit (SDD) and SEPA Credit Transfer payment schemes are available in each SEPA country for payments within the Eurozone. SEPA Direct Debit initially worked alongside national direct debit schemes until 1 August 2014. From that date, only SEPA Direct Debit was permitted for collecting euro-denominated payments in the EU. In October 2016, SDD and IBAN became the mandatory methods for euro transfers in all of the EU and EEA, but not mandatory for transfers in other currencies.
Direct debit | Europe
The main aim of Europe Direct is to provide European citizens with general information on the European Union. Other aims include the answering of questions on political activities of the European Union and promoting European integration. Advice and practical tips on rights entitled to Union citizens are provided. Inquiries, in any of the current 24 official languages, are processed in a central contact point and answered in the same language. The customer service staff must be fluent in at least three languages and have a university degree. Europe Direct support is available via telephone (free of charge within the EU and on a uniform number), e-mail or web-chat.
Europe Direct | Mission
Direct effect is applicable when the particular provision relied on fulfils the "Van Gend en Loos" criteria. It is therefore applicable in the case of treaty articles ("Van Gend en Loos" was a claim based on a treaty article), in which case it can be both vertically and horizontally directly effective.
Direct effect of European Union law | Treaty articles
The chart below provides a full summary of all applying exchange-rate regimes for EU members, since the European Monetary System with its Exchange Rate Mechanism and the related new common currency ECU came into being on 13 March 1979. The euro replaced the ECU 1:1 at the exchange rate markets, on 1 January 1999. Between 1979 and 1999 the D-Mark functioned as a "de facto" anchor for the ECU, meaning there was only a minor difference between pegging a currency against the ECU and pegging it against the D-mark. The eurozone was established with its first 11 member states on 1 January 1999.
European Exchange Rate Mechanism | Historical exchange-rate regimes for EU members
Physical investment seems to have increased by 5% in the eurozone due to the introduction. Regarding foreign direct investment, a study found that the intra-eurozone FDI stocks have increased by about 20% during the first four years of the EMU. Concerning the effect on corporate investment, there is evidence that the introduction of the euro has resulted in an increase in investment rates and that it has made it easier for firms to access financing in Europe. The euro has most specifically stimulated investment in companies that come from countries that previously had weak currencies. A study found that the introduction of the euro accounts for 22% of the investment rate after 1998 in countries that previously had a weak currency.
Euro | Investment
The principal monetary policy tool of the European central bank is collateralised borrowing or repo agreements. These tools are also used by the United States Federal Reserve Bank, but the Fed does more direct purchasing of financial assets than its European counterpart. The collateral used by the ECB is typically high quality public and private sector debt. The criteria for determining "high quality" for public debt have been preconditions for membership in the European Union: total debt must not be too large in relation to gross domestic product, for example, and deficits in any given year must not become too large.
European Central Bank | Monetary policy tools
Europe Direct includes Europe Direct Information Centre (short: EDI or EDIC), European Documentation Centre (EDC) and the EU Team Europe speakers bureau. The network was created in 2005 and restructured in February 2009.
Europe Direct | Network
British Gas plc". Horizontal direct effect concerns the relationship between individuals (including companies). If a certain provision of EU law is horizontally directly effective, then citizens are able to rely on it in actions against each other. This indicates that a citizen is able to rely on a provision from the EU law against another citizen before the national court. These obligations can create rights for or be imposed on citizens in the Member State. Contrary to treaty articles and regulations, Directives are usually incapable of being horizontally directly effective. Certain provisions of the treaties and legislative acts such as regulations are capable of being directly enforced horizontally.
Direct effect of European Union law | Varieties of direct effect
The euro is the sole currency of 19 EU member states: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain. These countries constitute the "eurozone", some 343 million people in total . With all but one (Denmark) of the remaining EU members obliged to join when economic conditions permit, together with future members of the EU, the enlargement of the eurozone is set to continue. Outside the EU, the euro is also the sole currency of Montenegro and Kosovo and several European microstates (Andorra, Monaco, San Marino and the Vatican City) as well as in five overseas territories of EU members that are not themselves part of the EU (Saint Barthélemy, Saint Martin, Saint Pierre and Miquelon, the French Southern and Antarctic Lands and Akrotiri and Dhekelia).
Euro | Direct usage
Tax policy in the European Union (EU) consists of two components: direct taxation, which remains the sole responsibility of member states, and indirect taxation, which affects free movement of goods and the freedom to provide services. With regard to European Union direct taxes, Member States have taken measures to prevent tax avoidance and double taxation. EU direct taxation covers, regarding companies, the following policies: the common consolidated corporate tax base, the common system of taxation applicable in the case of parent companies and subsidiaries of different member states (to avoid withholding tax when the dividend qualifies for application of the EC Parent-Subsidiary Directive, the financial transaction tax, interest and royalty payments made between associated companies and elimination of double taxation if the payment qualifies for application of the EC Interest and Royalties Directive.
Direct tax | Direct taxation in other countries
On December 31, 1998, the Euro would officially become a currency and these exchange rates would become irrevocable and trading Deutschemarks for Euros would be like exchanging nickels for dimes. Yet, leading up to this conversion, the demand for Euros was so incredibly high that one could buy all of the constituent currencies of the Euro for 98.25% of the value of the Euro and then sell the Euro itself for its full value. This was caused when corporates, governments and banks had decided that after January 1, 1999, the majority of their electronic billing and transfers would be done in Euros.
Fixed-income relative-value investing | Classic arbitrage
Monetary policy in the eurozone (the EU countries which have adopted the Euro) is determined by the European Central Bank (ECB). Thus, the setting of central bank interest rates and monetary easing is in the sole domain of the ECB, while taxation and government expenditure remain mostly under the control of national governments, within the balanced budget limits imposed by the Stability and Growth Pact. The EU has a monetary union but not a fiscal union. In October 2007, then ECB president, Jean-Claude Trichet, emphasised the need for the European Union (EU) to pursue further economic and financial integration within certain areas (among others, labour mobility and flexibility and reaching retail banking convergence).
European Fiscal Compact | Background
In European Union law, direct effect is the principle that Union law may, if appropriately framed, confer rights on individuals which the courts of member states of the European Union are bound to recognise and enforce. Direct effect is not explicitly stated in any of the EU Treaties. The principle of direct effect was first established by the Court of Justice of the European Union (CJEU) in "Van Gend en Loos v. Nederlandse Administratie der Belastingen". Direct effect has subsequently been loosened in its application to treaty articles and the ECJ has expanded the principle, holding that it is capable of applying to virtually all of the possible forms of EU legislation, the most important of which are regulations, and in certain circumstances to directives.
Direct effect of European Union law | Introduction
The party has three principal aims: The party has suggested that if Ireland were to withdraw from the Eurozone, it could lead to "more stable economic growth".
Direct Democracy Ireland | Policies
Its international usage has also grown as a trading currency, acting as an economic or political alternative to using the United States dollar. Its increasing usage in this sense has led to its becoming the only significant challenger to the US dollar as the world's main reserve currency.
International status and usage of the euro | Introduction
Using a mechanism known as the "snake in the tunnel", the European Exchange Rate Mechanism was an attempt to minimize fluctuations between member state currencies—initially by managing the variance of each against its respective ECU reference rate—with the aim to achieve fixed ratios over time, and so enable the European Single Currency (which became known as the euro) to replace national currencies.
European Currency Unit | Exchange rate
Although it is generally accepted that EU law has primacy, not all EU laws give citizens standing to bring claims: that is, not all EU laws have "direct effect". In "Van Gend en Loos v Nederlandse Administratie der Belastingen" it was held that the provisions of the Treaties (and EU Regulations) are directly effective, if they are (1) clear and unambiguous (2) unconditional, and (3) did not require EU or national authorities to take further action to implement them. Van Gend en Loos, a postal company, claimed that what is now TFEU article 30 prevented the Dutch Customs Authorities charging tariffs, when it imported urea-formaldehyde plastics from Germany to the Netherlands.
European Union law | Direct effect
The "band" or "spread" in Fig.1 is €0.6 (from €1.2 to €1.8).
Fixed exchange rate system | Open market mechanism example
The chart below provides a full historical summary of exchange-rate regimes for EU members since the European Monetary System with its Exchange Rate Mechanism and the related new common currency ECU was born on 13 March 1979. The euro replaced the ECU 1:1 at the exchange rate markets, on 1 January 1999. During 1979–1999, the German mark functioned as a de facto anchor for the ECU, meaning there was only a minor difference between pegging a currency against ECU and pegging it against the German mark.
Enlargement of the eurozone | Exchange-rate regime for EU members
To prevent this, the ECB may purchase government bonds and thus meet the shortfall in money supply. This is called sterilized intervention in the foreign exchange market. When the ECB starts running out of reserves, it may also devalue the euro in order to reduce the excess demand for dollars, i.e., narrow the gap between the equilibrium and fixed rates.
Fixed exchange rate system | Excess demand for dollars
Further case law to demonstrate this practice is "Francovich v Italy" where action could be taken against the government by an individual for their failure to implement a directive and the subsequent loss of rights suffered in court.
Direct effect of European Union law | Directives
EU countries must remove the currency from circulation and reimburse the holder", no matter what the country of issue. The European Central Bank has established that "Member states may refuse to reimburse Euro money that has been deliberately rendered unfit for circulation, or where it has been caused by a process that would predictably have led to the money becoming unfit. The exception to this is money collected for charitable purposes, such as coins thrown into a fountain". The ECB legal department also states "the ECB will refuse to replace money that has been stamped for advertising purposes".
Money burning | Euro Zone
A concept of European Union constitutional law that relates specifically to "regulations", direct applicability (or the characteristic of regulations to be "directly effective") is set out in Article 288 (ex Article 249) of the Treaty on the Functioning of the European Union (as amended by the Lisbon Treaty). Although often confused with the doctrine of direct effect, direct applicability refers to the fact that regulations require no implementing legislation within individual member states - they take effect as soon as they are published by the European Commission. This confusion is perhaps explained by reference to the treaty provision governing regulations which provides that they, and only they, have "direct applicability" within the member states.
Direct applicability | Introduction
There are countries which, though not official members of the Eurozone, still use the euro as legal or de facto currency, through official agreements with the EU. These are European microstates which are largely economically dependent on their larger Eurozone-member neighbours. Some other countries unilaterally decided to use the Euro without having currently a formal agreement with the EU.
Third-country economic relationships with the European Union | Eurozone-related
For services paid for in currencies other than the euro, the amount in euro is converted to the other currency using the reference rates published in the Official Journal of the European Union (OJoEU). After the adoption of EU regulation 531/2012 the retail exchange rate to be used for the relevant year should be calculated by taking the average of the reference exchange rates published in the OJoEU on 1 March, 1 April and 1 May of that year, with the new exchange rate coming into force on 1 July of that year. The wholesale exchange rate however is taken from only the rate published on 1 May of that year.
European Union roaming regulations | Local price limits
The supply of foreign exchange is similarly derived from the foreign demand for goods, services, and financial assets coming from the home country. Fixed exchange-rates are not permitted to fluctuate freely or respond to daily changes in demand and supply. The government fixes the exchange value of the currency. For example, the European Central Bank (ECB) may fix its exchange rate at €1 = $1 (assuming that the euro follows the fixed exchange-rate). This is the central value or par value of the euro. Upper and lower limits for the movement of the currency are imposed, beyond which variations in the exchange rate are not permitted.
Fixed exchange rate system | Open market mechanism example
The ERM is based on the concept of fixed currency exchange rate margins, but with exchange rates variable within those margins. This is also known as a semi-pegged system. Before the introduction of the euro, exchange rates were based on the European Currency Unit (ECU), the European unit of account, whose value was determined as a weighted average of the participating currencies. A grid (known as the Parity Grid) of bilateral rates was calculated on the basis of these central rates expressed in ECUs, and currency fluctuations had to be contained within a margin of 2.25% on either side of the bilateral rates (with the exception of the Italian lira, the Spanish peseta, the Portuguese escudo and the pound sterling, which were allowed to fluctuate by ±6%).
European Exchange Rate Mechanism | Intent and operation of the ERM II
In August 1993, the margin was expanded to 15% to accommodate speculation against the French franc and other currencies.
European Exchange Rate Mechanism | Increase of margins
Since membership of the eurozone establishes a single monetary policy for the respective states, they can no longer use an isolated monetary policy, e.g. to increase their competitiveness at the cost of other eurozone members by printing money and devalue, or to print money to finance excessive government deficits or pay interest on unsustainable high government debt levels. As a consequence, if member states do not manage their economy in a way that they can show a fiscal discipline (as they were obliged by the Maastricht treaty), they will sooner or later risk a sovereign debt crisis in their country without the possibility to print money as an easy way out.
Economic and Monetary Union of the European Union | Monetary policy inflexibility
In Turkey, direct debits are widely used, for utility and credit card payments, as well as commercial transactions. However, whereas in other countries the payee instructs his/her bank to make a collection, in Turkey the payer needs to authorise his/her bank directly. The usage differs from standing orders, as payment amounts are not fixed and payments need not be periodical (i.e. payments can be of any amount and can be casual or periodic).
Direct debit | Turkey
Capital within the EU may be transferred in any amount from one country to another (except that Greece currently has capital controls restricting outflows, and Cyprus imposed capital controls between 2013 and April 2015). All intra-EU transfers in euro are considered as domestic payments and bear the corresponding domestic transfer costs. This includes all member States of the EU, even those outside the eurozone providing the transactions are carried out in euro. Credit/debit card charging and ATM withdrawals within the Eurozone are also charged as domestic; however, paper-based payment orders, like cheques, have not been standardised so these are still domestic-based.
European Single Market | Capital
The gap between the amounts currently foreseen and 90% of the EU-27 average is reduced by one-third.
Common Agricultural Policy | New design of direct payments
Direct elections take place to the European Parliament every five years. The Council and European Council is composed of nationally elected or appointed officials and thus are accountable according to national procedures. The Commission also isn't direct elected although future appointments of the President must take into account of results of Parliament's elections. Parliament's elections are held by universal suffrage of EU citizens according to national restrictions (such as age and criminal convictions). Proportional representation is used in all parliamentary constituencies. Members of the European Parliament cannot also be elected nationally and are elected in national or sub-national constituencies. The first such election was of the in 1979.
Politics of the European Union | Elections
The network of EU-wide 500 information centres (16 in the UK,10 in Ireland, 3 in Malta ) are open to the public. These centres are run by national or private organisations under a public contract. They are co-funded by the European Commission.
Europe Direct | Mission
If a state leaves the European Union, Article 50 of the Treaty on European Union says that "Treaties shall cease to apply to the State in question". If the state has been using the euro as its currency then, rather than form a new domestic currency, it might continue to use the euro unilaterally or by way of a monetary agreement with the EU as Montenegro or Andorra do without being a member of the EU.
Withdrawal from the eurozone | Withdrawal from the European Union
The ECJ first articulated the doctrine of direct effect in the case of "Van Gend en Loos", the European Court of Justice laid down the criteria (commonly referred to as the "Van Gend criteria") for establishing direct effect. The EU article provision had to be:
Direct effect of European Union law | Introduction
The ECB has also set up a clearing system, TARGET, for large euro transactions. The final stage of completely free movement of capital was thought to require a single currency and monetary policy, eliminating the transaction costs and fluctuations of currency exchange. Following a Report of the Delors Commission in 1988, the Treaty of Maastricht made economic and monetary union an objective, first by completing the internal market, second by creating a European System of Central Banks to co-ordinate common monetary policy, and third by locking exchange rates and introducing a single currency, the euro. Today, 19 member states have adopted the euro, while 9 member states have either determined to opt-out or their accession has been delayed, particularly since the Eurozone crisis.
European Single Market | Capital
In practice, the only means of sterilisation used has been the auctioning of sufficient quantities of one-week deposits at the ECB – the same means of sterilisation that the ECB used for its previous bond-buying programme, the SMP.
Outright Monetary Transactions | Description
Without that, the country will experience outflows or inflows of capital. Fixed pegs were usually used as a form of monetary policy, since attaching the domestic currency to a currency of a country with lower levels of inflation should usually assure convergence of prices. In a pure flexible exchange rate regime or floating exchange rate regime, the central bank does not intervene in the exchange rate dynamics; hence the exchange rate is determined by the market. Theoretically, in this case reserves are not necessary. Other instruments of monetary policy are generally used, such as interest rates in the context of an inflation targeting regime.
Foreign exchange reserves | Purpose
Official practice for English-language EU legislation (not necessarily in national legislation) is to use the words "euro" and "cent" as both singular and plural. This practice originally arose out of legislation intended to ensure that the banknotes were uncluttered with a string of plurals. Because the "s"-less plurals had become "enshrined" in EU legislation, the Commission decided to retain those plurals in English in legislation even while allowing regular plurals in other languages. The Directorate-General for Translation now recommends that the regular plurals, "euros" and "cents", be used. The European Commission Directorate-General for Translation's "English Style Guide" (a handbook for authors and translators in the European Commission) previously recommended the use of regular plurals for documents intended for the general public but now has no restriction on usage.
Language and the euro | English
In July 2012, in the midst of renewed fears about sovereigns in the eurozone, Draghi stated in a panel discussion in London that the ECB "...is ready to do "whatever it takes" to preserve the Euro. And believe me, it will be enough." This statement led to a steady decline in bond yields for eurozone countries, in particular Spain, Italy and France. In light of slow political progress on solving the eurozone crisis, Draghi's statement has been seen as a key turning point in the fortunes of the eurozone. Following up on Draghi's speech, the Governing Council of the European Central Bank (ECB) announced on 2 August 2012, that it "may undertake outright open market operations of a size adequate to reach its objective" in order to "safeguarding an appropriate monetary policy transmission and the singleness of the monetary policy".
European Central Bank | Outright Monetary Transactions
On 28 June 2012 eurozone leaders agreed to permit loans by the European Stability Mechanism to be made directly to stressed banks rather than through eurozone states, to avoid adding to sovereign debt. The reform was linked to plans for banking regulation by the European Central Bank. The reform was immediately reflected by a reduction in yield of long-term bonds issued by member states such as Italy and Spain and a rise in value of the Euro.
European debt crisis | Direct loans to banks and banking regulation
In light of the threat of a further fall in inflation and possibly even of a protracted period of deflation, on 7 November 2013 the CNB declared an immediate commitment to weaken the exchange rate to the level of 27 Czech korunas per 1 euro (day-on-day weakening by about 5 percent) and to keep the exchange rate from getting stronger than this value until at least the end of 2014 (later on this was changed to the second half of 2016). The CNB thus decided to use the exchange rate as a supplementary tool to make sure that inflation returns to the 2 percent target level.
Inflation targeting | Czech Republic
The chart below provides a full summary of all applying exchange-rate regimes for EU members, since the European Monetary System with its Exchange Rate Mechanism and the related new common currency ECU was born on 13 March 1979. The euro replaced the ECU 1:1 at the exchange rate markets, on 1 January 1999. During 1979–1999, the D-Mark functioned as a de facto anchor for the ECU, meaning there was only a minor difference between pegging a currency against ECU and pegging it against the D-mark. The eurozone was born with its first 11 Member States on 1 January 1999. The first enlargement of the eurozone, to Greece, took place on 1 January 2001, one year before the euro had physically entered into circulation.
History of the euro | Overview of eurozone enlargements and exchange-rate regimes for EU members
The direct current drives a three-phase inverter, which powers two asynchronous three-phase induction motors. There are two additional output windings on the transformer for the locomotive's auxiliaries and to supply power to the train vehicles.
Eurotunnel Class 9 | Background and design
The euro is the second-most widely held reserve currency after the U.S. dollar. After its introduction on 4 January 1999 its exchange rate against the other major currencies fell reaching its lowest exchange rates in 2000 (3 May vs Pound sterling, 25 October vs the U.S. dollar, 26 October vs Japanese yen). Afterwards it regained and its exchange rate reached its historical highest point in 2008 (15 July vs U.S. dollar, 23 July vs Japanese yen, 29 December vs Pound sterling). With the advent of the global financial crisis the euro initially fell, to regain later. Despite pressure due to the European sovereign-debt crisis the euro remained stable.
Euro | Against other major currencies
Around this time, in 1990, the EU introduced the Economic and Monetary Union (EMU), as an umbrella term for the group of policies aimed at converging the economies of member states of the European Union over three phases
Fixed exchange rate system | Example: The Snake
The chart below provides a full summary of all applying exchange-rate regimes for EU members, since the European Monetary System with its Exchange Rate Mechanism and the related new common currency ECU was born on 13 March 1979. The euro replaced the ECU 1:1 at the exchange rate markets, on 1 January 1999. During 1979–1999, the D-Mark functioned as a de facto anchor for the ECU, meaning there was only a minor difference between pegging a currency against ECU and pegging it against the D-mark. The eurozone was born with its first 11 member states on 1 January 1999. The first enlargement of the eurozone, to Greece, took place on 1 January 2001, one year before the euro had physically entered into circulation.
Eurozone | Historical eurozone enlargements and exchange-rate regimes for EU members
Fig.2 describes the excess demand for dollars. This is a situation where domestic demand for foreign goods, services, and financial assets exceeds the foreign demand for goods, services, and financial assets from the European Union. If the demand for dollar rises from DD to D'D', excess demand is created to the extent of "cd". The ECB will sell "cd" dollars in exchange for euros to maintain the limit within the band. Under a floating exchange rate system, equilibrium would have been achieved at "e". When the ECB sells dollars in this manner, its official dollar reserves decline and domestic money supply shrinks.
Fixed exchange rate system | Excess demand for dollars
Direct debit functionality is provided by two separate schemes. The basic scheme, "Core SDD", is primarily targeted at consumers and was launched on 2 November 2009. Banks offering SEPA payments are obliged to participate in this scheme. A second scheme, "B2B SDD", is targeted towards business users. Among the differences with respect to "Core SDD": Banks offering SEPA payments are not obliged to participate in this scheme (participation is optional).
Single Euro Payments Area | SEPA Direct Debit
OMT is considered by the European Central Bank once a Eurozone government asks for financial assistance. The Eurozone has established the European Stability Mechanism and the European Financial Stability Facility bailout funds in order to meet the challenges of the European debt crisis. From these funds and through OMT, the Eurozone's central bank can, henceforth, buy government-issued bonds that mature in 1 to 3 years, provided the bond-issuing countries agree to certain domestic economic measures – the latter being the so-called term of "conditionality". The aim of the program is then to prevent divergence in short-term bond yields, and to ensure that the ECB's monetary policy is transmitted equally to all the Eurozone's member economies.
Outright Monetary Transactions | Description
Interest is also adjusted as if the transaction never happened.
Direct debit | Poland
The euro is also used in countries outside the EU. Four states – Andorra, Monaco, San Marino, and Vatican City — have signed formal agreements with the EU to use the euro and issue their own coins. Nevertheless, they are not considered part of the eurozone by the ECB and do not have a seat in the ECB or Euro Group. Several currencies are pegged to the euro, some of them with a fluctuation band and others with an exact rate. For example, the West African and Central African CFA francs are pegged exactly at 655.957 CFA to 1 EUR.
Eurozone | With formal agreement
Nobel prize-winning economist James Tobin thought that the euro project would not succeed without making drastic changes to European institutions, pointing out the difference between the US and the eurozone. Concerning monetary policies, the US central bank FRB aims at both growth and reducing unemployment, while the ECB tends to give its first priority to price stability under Bundesbank's supervision. As the price level of the currency bloc is kept low, the unemployment level of the region has become higher than that of US since 1982. When it comes to fiscal policies, 12 percent of the US federal budget is used for transfers to states and local governments.
Eurozone | Criticism
Outside Europe, a number of special territories of EU members also use the euro as their currency. Additionally, over 200 million people worldwide use currencies pegged to the euro. The euro is the second-largest reserve currency as well as the second-most traded currency in the world after the United States dollar. , with more than €1.3 trillion in circulation, the euro has one of the highest combined values of banknotes and coins in circulation in the world.
Euro | Introduction
Most of the constitutions define directly or indirectly the economic system of the countries parallel to the democratic transition of the 1990s: free-market economy (sometimes complemented with the socially [and ecologically] oriented sector), economic development, or only economic rights are included as a ground for the economy. In the case of fiscal policy, the legislative, the executive and other state organs (Budget Council, Economic and Social Council) define and manage the budgeting. The average government debt in the countries is nearly 44%, but the deviation is great because the lowest figure is close to 10% but the highest is 97%.
Eastern Europe | Since 1989
It also found that having a domestic securities industry centered on the Irish Stock Exchange generates €207m in estimated direct economic impact (measured in Gross Value Added or GDP) and €230m in direct tax for the Irish exchequer (including stamp duty on trading in Irish shares).
Euronext Dublin | Introduction
Outside the EU, there are currently three French territories and a British territory that have agreements to use the euro as their currency. All other dependent territories of eurozone member states that have opted not to be a part of EU, usually with Overseas Country and Territory (OCT) status, use local currencies which are often pegged to the euro or US dollar. As non-sovereign entities, dependent territories which have adopted the euro are not permitted to mint euro coins like the European microstates, nor do they get a seat in the European Central Bank (ECB) or the Eurogroup. France is responsible for ensuring that the laws governing the EMU apply in their territories which use the euro.
International status and usage of the euro | Dependent territories outside the EU
Beginning in the year 1999 with some EU member states, now 19 out of EU states use the euro as official currency in a currency union. The remaining 8 states continued to use their own currency with the possibility to join the euro later. The euro is also the most widely used currency in the EU. Since 1992 the Maastricht Treaty sets out rigid economic and fiscal convergence criteria for the states joining the euro. Starting 1997, the Stability and Growth Pact has been started to ensure continuing economic and fiscal stability and convergence. Denmark is not a part of the eurozone due to its special opt-outs concerning the later joining of the euro.
Economy of the European Union | Currency
For example, there were still 19 CSDs operating in the euro area in 2009 and almost 40 in the 27 countries of the EU. This situation is clearly not optimal for a single currency area or for the EU, as it encourages each country's financial market to remain domestically oriented. Investors continue to invest mostly in domestic securities, and as a result, the euro-area financial market cannot fully benefit from the risk diversification and competition benefits that arise from having a single currency. These barriers which provoke a considerable competitive disadvantage for European capital markets were identified in a report by the Giovannini Group.
T2S | Origin
Regulations are also subject to direct effect. As Article 288 TFEU (ex Art 249 TEC) explicitly provides that regulations "Shall be binding in its entirety and directly applicable in all Member States" the ECJ has confirmed that they are therefore in principle directly effective stating that "Owing to their very nature and their place in the system of sources of Union law, regulations operate to confer rights on individuals which the national courts have a duty to protect" If a specific right is conferred therefore a regulation can be both vertically and horizontally directly effective. All regulations are directly effective.
Direct effect of European Union law | Regulations
The primary objective of the European Central Bank, set out in Article 127(1) of the Treaty on the Functioning of the European Union, is to maintain price stability within the Eurozone. The Governing Council in October 1998 defined price stability as inflation of under 2%, “a year-on-year increase in the Harmonised Index of Consumer Prices (HICP) for the euro area of below 2%” and added that price stability ”was to be maintained over the medium term”. (Harmonised Index of Consumer Prices) Unlike for example the United States Federal Reserve System, the ECB has only one primary objective—but this objective has never been defined in statutory law, and the HICP target can be termed "ad hoc".
European Central Bank | Mandate and inflation target
If the EDR is issued in euros, it pays dividends in euros and can be traded like the shares of European companies.
European depositary receipt | Introduction
This method is very popular within Germany as it allows quick and easy payments, and it is suited even for one-time payments. A customer might just give the authorisation at the same time she or he orders goods or services from an organisation. Compared to payments by credit cards, which allow similar usage, bank fees for successful collections are much lower. Often retailers such as supermarkets will process Girocards as direct debit (ELV) transactions after performing a real-time risk analysis when the card is swiped. This is possible because the bank account number and routing code of the giro account form part of every Girocard's card number (PAN), similar to early 1990s 19 digit Switch card numbers.
Direct debit | Germany
The European Exchange Rate Mechanism (ERM) II is a system introduced by the European Economic Community on 1 January 1999 alongside the introduction of a single currency, the euro (replacing ERM 1 and the euro's predecessor, the ECU) as part of the European Monetary System (EMS), to reduce exchange rate variability and achieve monetary stability in Europe. After the adoption of the euro, policy changed to linking currencies of EU countries outside the eurozone to the euro (having the common currency as a central point). The goal was to improve the stability of those currencies, as well as to gain an evaluation mechanism for potential eurozone members.
European Exchange Rate Mechanism | Introduction
On 31 December 1998, the European Currency Unit (ECU) exchange rates of the eurozone countries were frozen and the value of the euro, which then superseded the ECU at par, was thus established. In 1999, ERM II replaced the original ERM. The Greek and Danish currencies were part of the new mechanism, but when Greece joined the euro in 2001, the Danish krone was left at that time as the only participant member. A currency in ERM II is allowed to float within a range of ±15% with respect to a central rate against the euro. In the case of the krone, Danmarks Nationalbank keeps the exchange rate within the narrower range of ± 2.25% against the central rate of EUR 1 = DKK 7.46038.
European Exchange Rate Mechanism | History of the ERM II
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Europe Direct | Costs
Besides the economic motivations to the introduction of the euro, its creation was also partly justified as a way to foster a closer sense of joint identity between European citizens. Statements about this goal were for instance made by Wim Duisenberg, European Central Bank Governor, in 1998, Laurent Fabius, French Finance Minister, in 2000, Romano Prodi, President of the European Commission, in 2002. However, 15 years after the introduction of the euro, a study found no evidence that it has had a positive influence on a shared sense of European identity (and no evidence that it had a negative effect either).
Euro | Political considerations
European Union (EU) and Far East legislators looked at TPMS as a way of reducing CO2 emissions. From November 2014 (ECE-R 64 EU Directive), all new passenger cars models sold in the EU must be equipped with a TPMS.
Direct TPMS | EU and Far East
On 28 June 2012 Eurozone leaders agreed to permit loans by the European Stability Mechanism to be made directly to stressed banks rather than through Eurozone states, to avoid adding to sovereign debt. The reform was linked to plans for banking regulation by the European Central Bank. The reform was immediately reflected by a reduction in yield of long-term bonds issued by member states such as Italy and Spain and a rise in value of the Euro.
Economic reforms and recovery proposals regarding the Eurozone crisis | Direct loans to banks and banking regulation
On 2 August 2012, the Governing Council of the European Central Bank (ECB) announced that it would undertake outright transactions in secondary, sovereign bond markets, aimed "at safeguarding an appropriate monetary policy transmission and the singleness of the monetary policy". The technical framework of these operations was formulated on 6 September 2012. The program was adopted with near unanimity, the President of the Bundesbank being the sole vote against. On the same date, the bank's Securities Markets Programme (SMP) was terminated.
Outright Monetary Transactions | Launch
Coins from those four countries, Italy, and Finland remain exchangeable. The earliest coins to become non-convertible were the Portuguese escudos, which ceased to have monetary value after 31 December 2002, although banknotes remain exchangeable until 2022. All banknotes current on 1 January 2002 would remain valid until at least 2012. In Germany, Deutsche Telekom modified 50,000 pay phones to take Deutsche Mark coins in 2005, at least on a temporary basis. Callers were allowed to use DM coins, at least initially, with the Mark pegged to equal one euro, almost twice the usual rate.
History of the euro | Aftermath
The study found that consumers based their beliefs on inflation of those cheap goods which are frequently purchased. It has also been suggested that the jump in small prices may be because prior to the introduction, retailers made fewer upward adjustments and waited for the introduction of the euro to do so.
Euro | Inflation
Over time, the EurObserv'ER barometer has become a reference in Europe (in 2012, more than 92 000 downloads were counted). Numerous actors use its indicators:
EurObserv'ER | Users
The primary means for fiscal coordination within the EU lies in the Broad Economic Policy Guidelines which are written for every member state, but with particular reference to the 19 current members of the eurozone. These guidelines are not binding, but are intended to represent policy coordination among the EU member states, so as to take into account the linked structures of their economies. For their mutual assurance and stability of the currency, members of the eurozone have to respect the Stability and Growth Pact, which sets agreed limits on deficits and national debt, with associated sanctions for deviation. The Pact originally set a limit of 3% of GDP for the yearly deficit of all eurozone member states; with fines for any state which exceeded this amount.
Eurozone | Fiscal policies
However, it was used to price some international financial transactions and capital transfers.
European Currency Unit | Introduction
The enlargement of the eurozone is an ongoing process within the European Union (EU). All member states of the European Union, except Denmark which negotiated opt-outs from the provisions, are obliged to adopt the euro as their sole currency once they meet the criteria, which include: complying with the debt and deficit criteria outlined by the Stability and Growth Pact, keeping inflation and long-term governmental interest rates below certain reference values, stabilising their currency's exchange rate versus the euro by participating in the European Exchange Rate Mechanism (ERM II), and ensuring that their national laws comply with the ECB statute, ESCB statute and of the Treaty on the Functioning of the European Union.
Enlargement of the eurozone | Introduction
In November 2011 the euro's exchange rate index – measured against currencies of the bloc's major trading partners – was trading almost two percent higher on the year, approximately at the same level as it was before the crisis kicked off in 2007.
Euro | Against other major currencies
+15 percent, once again with the possibility of individually setting a narrower band with respect to the euro. Denmark and Greece became new members.
European Monetary System | Stage II
In Germany, Austria, the Netherlands, Belgium, and Scandinavia, cheques have almost completely vanished in favour of direct bank transfers and electronic payments. Direct bank transfers, using so-called giro transfers, have been standard procedure since the 1950s to send and receive regular payments like rent and wages and even mail-order invoices. In the Netherlands, Austria, and Germany, all kinds of invoices are commonly accompanied by so-called ' (Netherlands) or ' (German), which are essentially standardized bank transfer order forms preprinted with the payee's account details and the amount payable. The payer fills in his account details and hands the form to a clerk at his bank, which will then transfer the money.
Cheque | Europe
In order to determine which is the fixed currency when neither currency is on the above list (i.e. both are "other"), market convention is to use the fixed currency which gives an exchange rate greater than 1.000. This reduces rounding issues and the need to use excessive numbers of decimal places. There are some exceptions to this rule: for example, the Japanese often quote their currency as the base to other currencies. Quotation using a country's home currency as the price currency is known as direct quotation or price quotation (from that country's perspective)
Exchange rate | Quotations
The euro (symbol: €; code: EUR) is the official currency of 19 of the member states of the European Union. This group of states is known as the eurozone or euro area and includes about 343 million citizens . The euro, which is divided into 100 cents, is the second-largest and second-most traded currency in the foreign exchange market after the United States dollar. The currency is also used officially by the institutions of the European Union, by four European microstates that are not EU members, the British Overseas Territory of Akrotiri and Dhekelia, as well as unilaterally by Montenegro and Kosovo.
Euro | Introduction
The IBAN designation scheme was chosen as the foundation for electronic straight-through processing in the European Economic Area. The European Parliament mandated that a bank charge needs to be the same amount for domestic credit transfers as for cross-border credit transfers regulated in decision 2560/2001 (updated in 924/2009). This regulation took effect in 2003. Only payments in euro up to €12,500 to a bank account designated by its IBAN were covered by the regulation. The Euro Payments regulation was the foundation for the decision to create a Single Euro Payments Area (SEPA). The European Central Bank has created the TARGET2 interbank network that unifies the technical infrastructure of the 26 central banks of the European Union (although Sweden has opted out).
International Bank Account Number | Single Euro Payments Area
If Spain signs a negotiated Memorandum of Understanding with the Troika (EC, ECB and IMF) outlining ESM shall offer a precautionary programme with credit lines for the Spanish government to potentially draw on if needed (beside of the bank recapitalisation package they already applied for), this would qualify Spain also to receive the OMT support from ECB, as the sovereign state would still continue to operate with a complete market access with the precautionary conditioned credit line. In regards of Ireland, Portugal and Greece, they on the other hand have not yet regained complete market access, and thus do not yet qualify for OMT support.
Policy reactions to the Eurozone crisis | Outright Monetary Transactions (OMTs)
Romania has managed floating exchange rates and it is in line with using inflation targets as a nominal anchor for monetary policy and allowing for a flexible policy response to unpredictable shocks likely to affect the economy. Reasons for not entering the euro area are complex, covering national problems, in particular the insufficient economic convergence over a lacking perceived attractiveness of euro membership, to an unresolved institutional reform agenda (Backé and Dvorsky 2018).
Romania and the euro | Monetary and exchange rate policies
In Romania, the main objective of the NBR is to ensure and maintain price stability, promoting at the same time the general economic policy of the Government. As states in Article 2 of Law 312/2004, the National Bank is responsible for defining and implementing the monetary policy strategy (Direct inflation targeting) and the exchange rate policy. Over the years, the NBR has supported the monetary policy, by progressively decreasing the policy rate. The first step achieved was between February 2009 and March 2012, when the NBR cut the policy rate by a cumulative 500 basis points, to 5.25%. Followed by rapid decreases in the annual inflation rate which made it possible for the NBR to resume the downward adjustment of the policy rate: between July 2013 and February 2014, the NBR cut the policy rate by a cumulative 175 basis points, to 3.5%.
Romania and the euro | Monetary and exchange rate policies
The euro is the result of the European Union's project for economic and monetary union that came fully into being on 1 January 2002 and it is now the currency used by the majority of the European Union's member states, with all but Denmark bound to adopt it. It is the currency used by the institutions of the European Union and in the failed treaty on a European Constitution it was to be included with the symbols of Europe as the formal currency of the European Union. The euro is also widely used by other states outside the EU. Except for the one state with an opt out, all current and future members of the EU are obliged to adopt the Euro as their currency, thus replacing their current ones.
Currencies of the European Union | Euro
The use of the D'Hondt method might result in an effective threshold depending on the district magnitude.
2014 European Parliament election in Spain | Electoral system
In "Comet v. Produktschap", the European Court of Justice established that the procedural rules of each member state generally apply to cases of EU law. However, two basic principles must be adhered to: "equivalence" (the procedure for EU cases must be equivalent to the procedure for domestic cases) and "effectiveness" (the procedure cannot render the law functionally ineffective).
Direct effect of European Union law | Direct effect on procedural law
It is about citizens trust in the lowest rank policeman up to a President of a country. The actual situation regarding offset agreements in EU is described in details in a study on defense offsets in the Union countries commissioned by the European Defense Agency and published in 2007. According to this study the volume of EU offset agreements in 2006 was above 4-5 billion euro. The distribution of these offsets is as shown in the diagram: Direct Offsets, Military Indirect Offsets, Civilian Indirect Offsets. One could say that nothing would have emerged, if only Wiitakorpi would have humbly asked the experienced American giant for an advise on how to use indirect offsets.
Patria case | Follow the money
Yet in those areas where the EU has been granted competencies, it does have the power to pass binding and direct laws upon its members.
Politics of the European Union | Legal basis
In addition to its main regulated market, Euronext operates "Euronext Growth and Euronext Access", multilateral trading facilities (MTFs) which provide access to listing for small and medium-sized enterprises. Euronext maintains a single order book, and "Optiq" is the electronic trading platform it currently uses and develops. Optic has also been sold and is in use by a number of third party exchanges around the world.
Euronext | Markets
Prior to 2006, the inter-institutional style guide recommended use of "euro" and "cent" without the plural "s", and the translation style guide recommended use of invariant plurals (without "s") when amending or referring to original legislation but use of regular plurals in documents intended for the general public.
Language and the euro | English
For example, the exchange rate of the "renminbi" of the mainland of the People's Republic of China has been based upon a currency band; the European Economic Community's "snake in the tunnel" was a similar concept that failed, but ultimately led to the establishment of the European Exchange Rate Mechanism (ERM) and ultimately the Euro.
Currency band | Introduction
The slash is used in currency exchange rate notation to express exchange rates, the ratio of the first currency in terms of the second. For example, EUR/USD "x" expresses that the value of 1 euro in terms of US dollars is "x". This value may then be multiplied by any number of euros to find its value in dollars.
Slash (punctuation) | Currency
In 1998, Cuba announced that it would replace the US dollar with the euro as its official currency for the purposes of international trading. On 1 December 2002, North Korea did the same. (Its internal currency, the wŏn, is not convertible and thus cannot be used to purchase foreign goods. The euro also enjoys popularity domestically, especially among elites and resident foreigners.) Syria followed suit in 2006. In 2000, President of Iraq Saddam Hussein began the sale of his country's oil denominated in euros rather than US dollars since the majority of Iraqi oil trade was with the EU, India and China rather than the United States.
International status and usage of the euro | Trading currency
Fig.3 describes the excess supply of dollars. This is a situation where the foreign demand for goods, services, and financial assets from the European Union exceeds the European demand for foreign goods, services, and financial assets. If the supply of dollars rises from SS to S'S', excess supply is created to the extent of "ab". The ECB will buy "ab" dollars in exchange for euros to maintain the limit within the band. Under a floating exchange rate system, equilibrium would again have been achieved at "e". When the ECB buys dollars in this manner, its official dollar reserves increase and domestic money supply expands, which may lead to inflation.
Fixed exchange rate system | Excess supply of dollars