| Which other countries may use the euro?
Denmark, Sweden and the UK are the only countries in the EU that have
not so far adopted the euro - however, they have not ruled out joining
in future.
There are 10 countries in eastern and southern Europe which may join
the EU, and the euro, in 2004: Czech Republic, Cyprus, Estonia, Hungary,
Latvia, Lithuania, Malta, Poland, Slovenia, Slovakia.
If they do, the eurozone population will grow to 475 million.
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Why is the euro being introduced?
There are political and economic reasons.
The political aim is to foster a sense of common identity among Europe's
citizens, and to give new momentum to European integration.
Economically, the euro is expected to bring a variety of benefits.
Supporters argue that having all prices denominated in euros will bring
down the cost of goods and services across the eurozone, simply by making
price differences within the EU very transparent.
Many manufacturers will benefit as well, if they buy or sell their products
or services in the eurozone. The costs of changing money or hedging against
currency movements have disappeared, making it easier for them to do business.
Some experts expect the single currency to stimulate trade and investment.
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| What are the disadvantages?
In the short-term there are fears that shops could round up prices up,
hurting consumers and contributing to inflation.
Then there are the costs of the transition, which include changes to
cash registers, vending machines, and bank automatic teller machines.
And firms and banks need to change their software and accounting systems.
All in all, the cost of conversion to companies, including the financial
sector, could be measured in billions.
There may be cases where financial policies pursued by the European Central
Bank are not advantageous for individual countries, whose economies are
out of step with the major European economies.
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One euro is worth:
13.76 Austrian schillings
40.34 Belgian francs
2.204 Dutch guilders
5.946 Finnish markka
6.56 French francs
1.956 German marks
341 Greek drachmas
0.7876 Irish punts
1,936 Italian lira
40.34 Luxembourg francs
200.5 Portuguese escudo
166.4 Spanish peseta
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| In what form has the euro existed up to
now?
The single currency was introduced on 1 January 1999 as an electronic
currency. The 11 countries committed themselves to economic and monetary
union, and irrevocably fixed the exchange rates of their currencies (Greece
joined later).
The electronic euro has been used on foreign exchange markets, and for
transactions between banks and larger companies.
The launch of the euro as legal tender marks the completion of monetary
union.
Source: BBC |
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