Euro
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The euro is the single currency of 15 of the 27 member states of the European Union (EU) - those 15 are also called the euro area - and was first launched in 1999 with 11 members. The euro is monetarily administered by the European Central Bank (ECB), which recently announced that the wider euro-area economy is officially in recession although the ECB raised interest rates in mid-2008.
New money
The euro was introduced in January 1999 as a kind of virtual currency for cashless payments, eventually replacing the cash currencies of its 12 member states in 2002.[1] Most recently, Cyprus and Malta replaced their currencies with the euro in 2008 while Slovenia did so in 2007. The ECB can only influence the euro's value through monetary policy like adjusting interest rates - fiscal policies like taxation and government spending are still left to the euro's member nations.
Latest news
The euro-area economy is now suffering its first recession since the single currency was introduced, the ECB recently announced, as GDP sank by 0.2% for a third straight quarter in Q3 2008.[2] Critics said the ECB had been inflexible on monetary policy over the euro, exacerbating the downturn. The euro recently traded at US$1.26[3] after hitting $US1.60 in mid-2008 and continues to decline steadily in value vs. the greenback.
References
- ↑ The euro. European Union. Retrieved on November 14, 2008.
- ↑ Euro Area Suffers First Recession; Downturn May Turn Deep. Bloomberg. Retrieved on November 14, 2008.
- ↑ Currency Converter. Yahoo Finance. Retrieved on November 14, 2008.
