EURO

The euro,the second largest reserve currency as well as the second most traded currency in the world after the US Dollar, was launched in 1999 by the provisions of 1992 Maastricht Treaty. There were both political and economic reasons for creating Euro as single currency. Politically, supporters argue that the euro will strengthen European unity and help to promote stability, peace and prosperity in Europe. And in economic terms, they believe the euro complements the free movement of people, goods, services and capital set up under the European single market. To participate in the currency, member states are meant to meet strict criteria, such as a budget deficit of less than three per cent of their GDP, a debt ratio of less than sixty per cent of GDP (both of which were ultimately widely flouted after introduction), low inflation, and interest rates close to the EU average. Currently 19 countries and Spain using Euro replacing their currencies. Denmark, Sweden and the UK are the only countries in the EU that have not so far adopted the euro.

The euro is also being used by some non EU countries viz. Andorra, Monaco, San Marino, the Vatican and French overseas territories, including Martinique and Guadalupe in the Caribbean and Reunion inland in the Indian Ocean. It is also the official currency in Montenegro and Kosovo.