The history of the euro begins back in 1957, with the Treaty of Rome, in which it declared a common European market, with the goal of increasing economic prosperity and contributing to a “closer union among the peoples of Europe“ (History). Later on, the European Union organized the proposition in the European Currency Unit in 1979, to linked their currencies in efforts to prevent large fluctuations among one another, and to counter inflation among members (European). Then, the foundation of the euro had begun with the Single European Act in 1986, to keep to various currencies within a narrow range of value by changing the national interest rates (History). Finally, in 1992, the Treaty on European Union, which unified the

economic policies of it members, paved the way for the new single European currency (History). In 1998, the new European Central Bank was established and the participating members which included Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain cut their interest rates to a low level to promote growth and to prepare the way for the euro (Q&A). The exchange rates of the 11 member currencies had been set and the currency was adopted for foreign exchange and electronic transactions (European). The introduction of the euro began at about $1.17 at its beginning, but dropped to about $.88 in 2000, showing how superior the American economy can be at times when compared to the European economy (European). Greece later joined the 11 members in 2001 to begin adopting the legal tender in 2002, after previously failing to meet economic standards required to join (History). The 12 members switched to their new currency on January 1, 2002 creating a two month transition period, in which both sets of currencies were to be used a legal tender, though change would be given in euros (Q&A). The old currencies were no longer in use on February 28, 2002 and in some countries, even earlier. For the next three months, the old national currencies were accepted at banks across the euro zone (Q&A). From July onwards, only the central banks in the euro zone have pledged to accept the old national legal tender (Q&A). Denmark, Sweden and the UK are the only countries in the European Union in which have not yet adopted the euro (Q&A). In all three nations, there was strong support that dropping their national currencies would give up too much independence (European). As for the future, there are 10 more countries in eastern Europe which may join the European Union, and adopt the euro in 2004: Czech Republic, Cyprus, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovenia and Slovakia (Q&A).

The background history of the euro, as well as the advantages and disadvantages of the currency, provide an in depth look at where the economy could lean toward in the 21st century. Whether the euro becomes the

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