They introduced the Euro in non-physical electronic form at midnight on 1 January 1999. At that time, the national currencies of participating countries ceased to exist. Nevertheless, they continued as legal tender until new euro notes and coins were introduced on 1 January 2002. The changeover period lasted until 28 February 2002.
The purpose of the Euro was to solidify the European economy as a whole (Gerlach and Svensson 2003). Differences cause by rounding and the use of significant digits made international trade difficult on the subcontinent itself. Plus, the institution of a unified mode of exchange augmented trade outside Europe. As a result, the European economy has become stronger both internally and externally.
Compare the performance of the Euro to the U.S. dollar, for instance (Portes et al 1998). From the start, the Euro represented about one and a half times the value of the U.S. dollar. Although it has risen and fallen over the last decade, it has always remained competitive and never sunk below the value of a U.S. dollar. This indicates a robust global presence on part of the Euro. It will be interesting to observe the impact of the Euro on stabilizing our current global recession.
References and further reading may be available for this article. To view references and further reading you must purchase this article. Stefan Gerlach and Lars E. O. Svensson. Journal of Monetary Economics, Vol. 50, No. 8, November 2003, pp.