the euro becomes the single currency of the euro area

The introduction of the euro has meant a big change for everyone in the euro area .

attempts to eliminate them . Indeed , now that the governments of the euro area have voluntarily relinquished their national currency , and the citizens of the euro area will be able to reap the economic benefits of using one single currency in an enlarged economic area , these citizens will ask why it is possible to have a single currency but not to eliminate other barriers between the countries of the euro area .

As a consequence of the introduction of the single currency , the competence for euro area monetary policy has been transferred to the Community level .

and full consistency to be achieved in some areas , especially in the treatment of derivatives , the portfolio account in general and the valuation of outstanding stocks .

The striking benefits of the single currency are

4 From the beginning of Stage Three , there will be a single monetary policy for the European currency area conducted by the ESCB .

The completion date of the changeover

However , in a single currency area , only the aggregated and consolidated results of these operations are significant for analytical and operational purposes .

This information is necessary , in the early years of the single currency area , for the fulfilment of the ECB 's statistical requirements .

Bilateral procedure a procedure whereby the central bank deals directly with only one or a few counterparties , without making use of tender procedures .

The creation of the single currency has not been accompanied by the establishment of a single payment area .

11 countries made up the euro area when the euro was introduced in 1999 .

Coins of euro area

introduction of the euro as a single currency

introduction of the euro as a single currency .

Slovakia joins euro area .

Counterparty area Currency of transaction Denomination of the series or special calculation

As a consequence , it will not participate in the single currency at the start of Stage Three .

Following an interruption in this trend in early 1994 the rate of decline was more gradual ( see Chart 6a ) .

Objectives of the adoption of a single currency and preconditions for its success

Inflation in most of the euro area countries has been significantly below the levels the countries experienced in the decades preceding the launch of the currency .

Council ( of the European Union ) the supreme legislative body of the Community . It is made up of representatives of the Governments of the Member States , normally the Ministers responsible for the matters under consideration ( therefore often referred to as Council of Ministers ) .

policy and the creation of a single currency in the third stage

One of its principle challenges was , of course , the introduction of the single currency .

B. Updating of the terminology used in the Treaties with respect to the single currency 3 .

The ECB 's decision making bodies are specifically tailored to the requirements of monetary policy decision making in a single currency area .

From the start of the European currency area onwards

From the start of the European currency area onwards

EXAMPLES OF THE CONDUCT OF THE SINGLE MONETARY POLICY IN THE EUROPEAN CURRENCY From the start of Stage Three of EMU , the European currency will be the currency in which the ECB defines the single monetary policy and in which all monetary policy operations are conducted by the ESCB .

The Treaty does not provide for a body that brings together the finance ministers of euro area member countries to discuss issues of common concern relating to the euro area and the single currency .

As a single currency has a single exchange rate , there can only be one single exchange rate policy .

4.1 Non euro area EU countries Economic statistics for the Member States not participating in the single currency are required for three main purposes .

INITIATING THE CHANGEOVER TO THE SINGLE CURRENCY FOR NON CASH TRANSACTIONS

One of the advantages of the single currency is that the euro area is probably less vulnerable than in the past to economic disturbances elsewhere .

a scenario for the changeover to the single currency

COMPLETION CURRENCY OF

Today , the single currency is used in an area that stretches from Cyprus to Ireland and from Portugal to Finland .

Prior to the introduction of the single currency , Andorra used the French franc and the Spanish peseta .

From the start of the European currency area onwards ( continued )

Comprising some 11,000 institutions , it provides as homogeneous a population as possible for statistical purposes . It will facilitate the production of a comprehensive and consistent balance sheet of the money creating sector in the single currency area and support other important statistical applications such as the ESA 95 .

Credibility of the newly established ESCB and of the single monetary policy requires in particular that monetary conditions are homogeneous throughout the European currency area .

Moreover , the single currency may have affected trade also by changing the pricing behaviour of euro area exporters .

Counterparty area Balance sheet counterparty sector Currency of transaction Balance sheet suffix

Convergence criteria the criteria set out in Article 121 ( 1 ) of the Treaty ( and developed further in the Protocol on the convergence criteria referred to in Article 121 ) that must be fulfilled by each EU Member State before it can adopt the euro .