Euro(欧元) National currencies are vitally important to the way modern economies operate. They allow us to consistently express the value of an item across’’ borders of countries, oceans, and cultures. Wealth can be easily stored or transported as currency. Currencies are also deeply embedded in our cultures and our psyche. Think about how familiar you are with the price of things. If you’’ve grown up in the United States, you think of everything in "dollars," just like you think about distances in inches and miles. On January 1, 2002, the euro became the single currency of 12 member states of the European Union. This will make it the second largest currency in the world, (the U.S. dollar being the largest). It will also be the largest currency in the history of the world. Twelve national currencies will evaporate (蒸发) and be replaced by the euro. Designing the Euro The European Commission (EC) was given the task of creating the euro symbol as part of its communications work. There were three things the design had to accomplish: It had to be easily recognized. It had to be easily written by hand. It had to be pleasing to look at. The EC had more than 30 designs drawn up. They selected 10 from those and let the public vote, which narrowed those 10 down to two. From them they made their final selection. The design ’’that was selected is based on the Greek letter epsilon, and also resembles the "e" as the first letter of the word "Europe. " The two parallel lines through the center of the "c" represent stability. Where Did the Idea Come From The original seed was planted in 1946 when Winston Churchill suggested the creation of the "United States of Europe." His goals were primarily political, in that he hoped a unified government would bring about peace for a continent that had been torn apart by two world wars. Then, in 1952, six west-European countries took Churchill’’s suggestion and created the European Coal and Steel Community (ECSC). These resources were quite strategic to the power of each country, so a requirement of the ECSC was that each country allows their resources to be controlled by an independent authority. Their goal, just as Churchill had intended, was to help pr military conflict between France and Germany. In 1957, the Treaty of Rome was signed, declaring the goal of creating a common European market. It was signed by France, Germany, Italy, Belgium, the Netherlands, and Luxembourg. After many false starts, the process of creating the Euro got its real start in , when the Delors Report was published by Jacques Delors, president of the European Commission. This important report outlined a three-stage transition (过渡) plan that would create a single European Currency. Planning the Transition As outlined in the Delors Report, the transition to a single European courtesy followed a three-stage plan: Stage one began on July 1, 1990, and immediately abolished (废止) (at least in principle.) all restrictions on the movement of capital between the member states. It also began the identification of issues that needed to be dealt with and the development of a working program to implement the . upcoming changes. Stage two began on January 1, 1994, and marked the establishment of the European Monetary Institute (EMI). The EMI was responsible for coordinating the monetary policy and strengthening the cooperation of the central banks, as well as preparations for the establishment of the European System of Central Banks, which included the single monetary policy and single currency. In December 1995, the European Heads of State or Government at the European Council meeting in Madrid voted on the name "euro" for the single currency of the European Monetary Union. Stage three began on January 1, 1999, with the establishment of "irrevocably fixed exchange rates" of the currencies of the current 11 member states. At this point, the euro was the official currency of those countries, but could only be used in non-cash transactions such as electronic transfers, credit, etc. Economic Requirements for Participation In addition to the membership requirements of the EU, countries who wished to participate in the euro and be a part of "Euroland" had to pass some economic tests referred to as convergence criteria: The country’’s annual government budget deficit (赤子) cannot exceed 3 percent of gross domestic product (GDP, the total output of the economy). The total outstanding government debt (the cumulative (累积的) total of each year’’s budget deficit) cannot exceed 60 percent of GDP. In order to push down inflation rates and encourage more stable prices, the country’’s rate of inflation must be within 1.5 percent of the three best performing EU countries. The average nominal long-term interest rate must be within 2 percent of the average rate in the three countries with the lowest inflation rates. (Interest rates are measured on the basis of long-term government bonds and/or comparable securities.) The country’’s exchange rates must stay within "normal" fluctuation margins of the European Exchange Rate Mechanism (ERM) for at least two years. While there was much debate over how strictly these requirements must be upheld, it was finally determined that participating countries must show that they are at least "on course" to meet the requirements. Meeting the initial requirements, however, is not a one-time thing. The Stability and Growth Pact, which was drafted in 1996, established an agreement stating that fines would be charged to countries who have excessive deficits. Member states cannot run a budget deficit that is greater than 3.0 percent of the GDP. If they do, they will be charged 0.2 percent of their GDP, plus 0.1 percent of the GDP for every percentage point of deficit above 3. 0 percent. The Pact does not automatically impose these fines, however. Countries that are in recession (不景气), which is defined as a fall by at least 2.0 percent for four fiscal quarters, may automatically be exempt (免除). A fall by any amount from 0.75 to 2.0 percent requires a vote by the EU to impose the fine. While the Pact is structured as a stabilizer for the economy, there are still those who argue that it can be damaging to economies in that governments can adopt a loose fiscal stance during times of fast growth, but put the brakes on excessively during slowdowns. Implementing the Changeover On January 1, 1999, the euro was established as the official currency of the 12 participating member states of the European Union. The conversion rates (汇价) were "irrevocably fixed," and the euro officially "existed. " At that point, the euro could be used for non-cash transactions, such as electronic payments, writing checks, or credit transactions. Although this sounds confusing, in most cases the balances were shown both in the national currency as well as in the converted euro amounts. The currency changed, but because of the established conversion rate, the value remained the same. The euro currency was introduced on January 1, 2002. Some countries had slightly different schedules for the end of circulation of their existing national currency. When items ’’were purchased with national currency, the change was given in euros. Exchange of cash was also done in banks." Automated teller machines (ATMs) began distributing only euros on January 1, 2002. During the "dual circulation period," until the final deadlines were reached for changeover, both national currencies and the euro were accepted, but after that point only the euro was acceptable legal tender. Banks will still be able to exchange old currency for new currency until approximately 2012. The passage mainly discusses the various aspects of euro.