The euro turns 20 on December 31. Picture: REUTERS/DADO DUVIC
The euro turns 20 on December 31. Picture: REUTERS/DADO DUVIC

Paris — Two decades ago the euro was launched, at first existing virtually for accounting and financial transactions, then three years later as notes and coins.

Here is a recap of its defining moments.

Conversion rate 

On December 31 1998, on the eve of the euro launch as planned in the EU’s Maastricht Treaty, the definitive conversion rates are revealed to great fanfare in Brussels: one euro will buy 1.95583 Deutsche marks, 6.55957 French francs and 1.936,27 Italian lire.

Tens of thousands of people in banks and European stock exchanges immediately get to work to ensure everything is ready and in place when markets re-open on January 4.

Shops that displayed prices in both currencies with approximate exchange rates update their tags.

Official currency

On January 1 1999. the euro becomes the official currency for 291-million people in 11 countries: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, The Netherlands, Portugal and Spain. The new money can be used for virtual bank operations, payments by cheque, traveler’s cheque and bank card.

January 4 is the euro’s baptism on European exchange markets. One euro exchanges for more than $1.18, but weeks later it slides to less than a dollar and at the end of October it hits its lowest rate ever, at $0.8230.

On January 1 2001, Greece becomes the 12th country to adopt the single currency.

Coins and notes 

A year later the euro becomes tangible: some 15-billion notes and more than 50-billion coins are put into circulation, shaking up the lives of 304-million Europeans. People familiarise themselves with the single currency, sometimes using pocket calculators to make it easier to work out conversions.

Unlike country-specific currencies, the euro notes show no national symbols, opting instead for bridges and windows.

A period of two currencies in circulation in each country in the  eurozone begins as national currencies are gradually phased out, lasting until March 1.

On July 15, the euro reaches parity with the dollar again.

More countries 

In 2003, Sweden, in a referendum, joins Denmark and Britain in rejecting the single currency. Elsewhere, new EU member countries adopt the single currency: Slovenia in 2007, Cyprus and Malta in 2008, Slovakia in 2009, Estonia in 2011, Latvia in 2014 and Lithuania in 2015.

Debt crisis

On July 15 2008, the euro reaches a historic exchange-rate high, trading at $1.6038 as the US is rocked by a sub-prime mortgage crisis. That November, the eurozone enters a recession lasting a year.

In 2010, the EU is mired in a debt crisis. In May, the EU and the International Monetary Fund (IMF) provide a €110bn bailout for Greece, which, in turn, commits to a severe austerity plan. A month later the euro plunges below $1.20.

In November, Ireland, where banks are crippled by debt, also obtains an EU/IMF bailout plan of €85bn. Portugal obtains a €78bn international bailout in May 2011.

Saving the euro

On July 25 2012, Spain’s long-term interest rate soars above 7.6%, sparking fears of a euro collapse. A day later, European Central Bank (ECB) chief Mario Draghi promises to do “whatever it takes to preserve the euro”.

In August, the ECB buys back in one week bonds of eurozone nations costing €22bn to support Italy and Spain. In October, the EU accepts wiping out a part of the Greek debt along with a new set of loans.

Avoiding ‘Grexit’

In May 2014, the single currency nears $1.40, hitting exports.  Then, months later, it comes close to $1.05 in a fall that is linked to the buying of assets by the ECB to support the economy.

In July the next year, Greece obtains a third bailout aimed at keeping it from crashing out of the eurozone, or “Grexit”.

‘Bin Laden’ banknotes 

In 2016, the ECB says it plans to stop issuing the €500 note by the end of 2018. The banknote is known as the “Bin Laden” and believed to be favoured by criminals for money laundering and terrorist financing.