Euro is one of the most popular and expensive currencies in the whole world. With its help, payment transactions are made in the eurozone countries. If you calculate, then about 300 million people use the euro every day, and the volume of banknotes in circulation is ahead of US dollars.
The emergence of the euro as a currency
His birth took place at the beginning of 1999. Then, only non-cash payment was possible, but after 3 years cash bills appeared.
Since that time, the Council of European Central Banks has kept under control the issue of paper banknotes and coins, all payment transactions, and the distribution of currency outside the eurozone countries. But the most important task is to maintain the course at a high level.
In January and February 2002, all previous national currencies were to be replaced by the euro at the established exchange rate. Currently, cash payments in euros are made only in eurozone countries. For further distribution, countries with this national currency must join EMR-2 (European Financial Currency Exchange Mechanism). But will the rest of the European Union become participants in EMR-2 or not, it will become known only in 2019.
Coins and Banknotes
Coins in denominations of 1 and 2 euros are in circulation. Since 1 euro is 100 euro cents, 0.5, 0.2 and even 0.01 coins are also issued.
Paper money and coins are issued not only in the European Central Bank, but also in the national banks of the EU countries. Here, for banknotes, there are strict requirements for the format, color and density of paper, but an exception is made for coins - it is allowed to create a specific design on the reverse. Most of the eurozone countries depict on the reverse national motives that reflect the history of the state. The front part of the coin is always performed according to the standard, and the drawing on it is declared. The minting of euro cents is not carried out everywhere. For example, in Austria there is no price adjustment, so the demand for 0.05 and 1 euro cent is constant. Pricing in many other EU countries, on the contrary, leads to completely getting rid of the small face value.
Paper euros also have their own characteristics: 200 and 500 euros - this is a face value that is considered impractical in cash. Printing of such bills is carried out in certain banks, but they must be recognized within absolutely the entire eurozone. Banknotes with a face value of 5 to 100 are in daily circulation in all European countries and are considered a state means for payment transactions.
How did the symbol € appear
The full picture of the creation of the euro symbol is still unclear. According to one of the most popular versions, a group of 4 specialists developed this symbol as a result of social research, as well as the development of many image variations. After that, the Greek letter "epsilon" was taken as the basis, which is crossed by two parallel lines, symbolizing the stability of the currency. But often the veracity of this version is questioned, because the names of these socialists are still unknown.
At the same time, Arthur Eisenmenger is trying to protect his copyright, claiming that he created this symbol. What version is historically accurate is still unknown.
The symbol € is also fixed in the national standard, where its dimensions, requirements for the image of angles and lines are defined. Banknotes are also protected by an individual serial number, where the first letter indicates the state in which the banknote was printed.
Reserve currency
Prior to the advent of €, the reserve currencies were francs and German marks. Today, the euro is the second reserve currency, occupying 30% of the global currency market.
Despite all fears, the European Union has accepted € as a single currency and sees prospects for its development in order to occupy an even larger share in the currency basket.
Exchange rate
The ratio of various currencies to each other is due to several factors:
- Inflation is the most unpleasant phenomenon that directly reduces the Central Bank's euro rate to the ruble and the dollar. In other words, inflation eats up the value of money.
- The balance of payments of the state, in which the demand in foreign currencies significantly reduces the value of national capital.
- Demand for currency in international settlement transactions. As soon as supply exceeds demand, then, for example, the euro / ruble rate decreases.
- The trust of people and organizations: it is important here in which banknotes they prefer to maintain and increase their budget.
- The interest rate on the euro, dollar and ruble in different countries.
- Monetary policy in these countries.
Course and its formation
It is impossible to accurately predict the Central Bank’s euro rate, because it is greatly influenced by political and economic stability in relations between countries. If the situation in the world is calm, then the fluctuations are short-term and insignificant.
The formation of the value of the currency begins with the results of international trade, where exported goods are sold and bought. As a result, the euro against the ruble, for example, will show the ratio of the purchasing power of the European currency to the Russian one. Such a phenomenon is called a real exchange rate, but in addition to it there is also an exchange rate. On it, the bank releases currency to its customers.
The decision on what the euro / dollar rate will be is made by the European Central Bank. The Central Bank does not directly participate in the growth or decline in the value of the euro, but is trying to smooth out sharp surges in price dynamics.
The main reference point is a dual-currency basket, which includes 45 euro cents and 55 US cents.
Proceeding from this, the European Central Bank sets the exchange rate of the euro against the dollar, taking into account market quotations in the domestic foreign exchange market.
Daily, with the exception of Saturday and Sunday, Euros are set against the dollar and the ruble. Buying, selling it for individuals and individuals is carried out at this price until the following changes come into force.
Updated 10 euro banknote
In 2014, the European Central Bank put into circulation an updated denomination of 10 euros. The changes did not affect the color scheme and the main image on the back (stone bridge). The main thing is protection against falsification. Although counterfeit banknotes of this denomination are extremely rare, the European Central Bank still decided to replace them with more modern and secure ones.
What changes have affected ten euros? The introduction of a watermark, a protective strip in the center of the bill, increasing the number 10 on the left of the banknote and on the back and coloring it in holographic emerald-blue colors, the inscription "ECB" has been translated into 9 languages, and the name "EURO" in Cyrillic has also appeared. The surface of the banknote is treated with a special composition, which increases its resistance to mechanical stress.