European Community - EC

and finance Allah shmoop What is the European monetary system

Or to put it another way where do euros come

from Most currencies cover a single country like the U

S Has the dollar The U K has the pound

of Zambia has the kwacha and so on But one

of the world's major currencies covers an entire region the

euro It's used in twenty three countries throughout Europe nineteen

countries within the European Union and four small ones outside

of the official U from France and Germany to Slovakia

and Luxemburg That's where the euro plays in the sun

When James Bond plays baccarat in Monaco he places his

bets in euros When the Knights of Malta get their

armor repaired well they pay in euros by castle in

France are Chocola in Belgium or sauerkraut in Germany or

whatever it is they eat in Portugal Yeah you're using

euros Despite the fact that it's one of the world's

widest circulating currencies the euro is actually one of the

youngest It hasn't been around for a very long and

by not around that long while we mean like it

wasn't here in the nineteen nineties So while friends dominated

TV and flannel shirts dominated fashion and Britney Spears dominated

TRL while Europe was dominated by a patchwork of currencies

France had the Frank Germany had the deutschmark Italy had

the lira in Zambia still had the kwacha well the

countries of the eurozone didn't exactly have smooth courtship In

fact they marked the first couple of decades of the

twentieth century with the biggest wars in history up to

that point and then ended the century there with a

common currency So how did they do this Well quick

timeline From nineteen fourteen to nineteen eighteen most of the

countries of Europe fought against each other in World War

I In the nineteen twenties Germany suffered through a massive

inflation and a painful political dislocation brought on by their

defeat in the war Other countries faced their own traumas

Fascism rampant in Italy paranoia and political division in France

By the nineteen thirties that continent suffered through the ravages

of the Great Depression and the rise of the Nazis

From nineteen thirty nine to nineteen forty five another war

Well this one was worse than the previous one That

conflict WW two left Everyone in Europe bombed out and

broke the center of the world economy then shifted to

the United States Meanwhile Europe split into spheres of influence

US dominated area in the West and the communist U

S S R dominated the area in the east So

for half a century or so an unending stream of

wars economic dislocation rivalry and while political confrontation marked relations

on the continent hardly a place ripe for currency unification

So what happened Well here's the short answer Eastern Europe

started instituting more socialist economic policies right after World War

Two Meanwhile the Western countries especially France the UK and

what was then known as West Germany started opening up

trade in a new series of treaties from the nineteen

fifties In the nineteen nineties the nations of Europe stopped

being openly compay edited Justus They were adding expensive social

programs Meanwhile the larger economies experienced an influx of these

huge migration policy issues The migrants came from other European

countries and largely from former colonies in Asia and Africa

will eventually none of the major European countries could really

afford to operate individually and by the late nineteen eighties

the governments of the communist countries in Eastern Europe started

to collapse The new regimes in these former Iron Curtain

nations looked to join the growing European wide market East

and West Germany reunited The former communist countries entered the

trade treaties The European Union became one of the world's

key economic organizations Pressure for a single currency began to

grow well in nineteen ninety to the members of the

European Community signed a treaty that pave the way for

a single currency A series of treaties followed until the

euro was introduced on January first nineteen ninety nine and

by two thousand two the first countries had completed a

changeover from their previous currencies Lesson here Don't LOSE HOPE

ONE DAYS Great war can become tomorrow's free trade Unified

currency zone Well a single Middle East currencies that ever

coming India Pakistan Trade Zone A gift card that works

at both Yankee Stadium and Fenway Park Yeah you never

know In a few decades maybe