Pre-euro currency: A history of money across Europe
Published on May 17, 2023
Europe may be one continent, but it is home to many nations — each with its own history, language, culture and even stereotypes. One thing that many European countries currently share is a currency (the euro), but that hasn’t always been the case. Before the euro was introduced, the national economies of Germany, France and other European nations ran on their own currencies.
But things have changed since the end of World War II, and especially since the creation of the European Union (EU) in 1992. For one, military security and economic growth have become paramount objectives for the countries of Europe. As such, one of the EU’s greatest achievements has been establishing a common currency and a single market where people can freely move, be it to work or study.
The introduction of a single currency has greatly facilitated such possibilities. But which countries have joined the Eurozone by effectively giving up their national currency? And what became of their pre-euro currency? Let’s explore these topics, and check in on the countries in Europe that haven’t yet adopted the euro.
The history of the euro is closely linked to the history of the European Union (EU). Both have their roots in the Maastricht Treaty signed in February 1992. Aside from effectively creating the EU, the treaty set the framework to implement a single currency across eligible EU countries.
In particular, it specified the “convergence criteria” that a member needed to comply with in order to qualify for the common currency. The candidate country had to demonstrate sound public finances and price stability, through the control of inflation and cost of living. It also had to show stability in terms of exchange rates and long-term interest rates.
On January 1, 1999, eleven countries (France, Germany, Austria, Italy, Spain, Portugal, the Netherlands, Belgium, Luxembourg, Finland and Ireland) gave up their national currency for a common one. At first, only financial markets and businesses adopted the single currency. The euro was finally introduced to the general public in January 2002.
This may sound strange, but the euro wasn’t always called the euro. In fact, the original name of the newly born currency was the European Currency Unit, or ECU. However, the name was changed in 1996 for various reasons, some of them linguistic. In German, it was deemed that ein ECU sounds too much like eine Kuh (a cow). Even more unfortunate, in French, l’ECU has the same pronunciation as les culs (the asses).
Over the years, more countries progressively adopted the euro. Greece failed to qualify at first but was finally admitted in early 2001. Also, since the fall of the Berlin Wall, several countries from the former communist bloc in central and eastern Europe have been able to become EU members and subsequently replace their currency with the euro.
However, it hasn’t been all smooth sailing. The sovereign debt crisis that started in 2009 greatly destabilized the still-new Eurozone. In particular, the economic crisis that first hit Greece before spreading to Portugal, Ireland, Italy and Spain could have sounded the death knell for the euro. It took the joint efforts of German Chancellor Angela Merkel and French President Nicolas Sarkozy to offer bailout packages between 2010 and 2012 to help stabilize Greece, Ireland, Portugal, Spain and Cyprus.
Since 1999, many countries from the European Union have met the necessary requirements to adopt the euro. To give you the complete picture, we have gathered the list of countries, their former European currencies before the euro and the years in which they joined the Eurozone.
|Year of joining the Eurozone
|Year of putting the euro in circulation
|France, Monaco, Andorra
|Republic of Ireland
|Italy, San Marino, Vatican City
Even though the number is growing, there are still several countries within the European Union that haven’t yet adopted the euro. Ultimately, and with the notable exception of Denmark, the plan is for them to also exchange their national currency for the euro. However, there is no set agenda to complete the process.
It’s also important to differentiate European countries (which are geographically located in the European continent) from countries that are members of the European Union. For instance, with the so-called Brexit vote in 2016, the United Kingdom chose to leave the EU but still belongs to the European continent. The same goes for the famously neutral Switzerland, which never applied to become a member of the European Union in the first place. Unless and until it does, it will not be eligible for the euro.
Here is the list of all the countries in Europe that do not use the euro and what their national currencies are:
|Member of the EU?
Since its creation, the European Union has sought to foster closer interactions and homogeneity among its member states. Alongside the single market and the free movement of people and products, the implementation of the euro is part of this effort. Most countries within the EU have given up their pre-euro currency for the single one. But there are still many countries, both within and outside the EU, that have kept their national currency. Be right on the money by keeping a note of who they are and what their currency is!