In just over 5 years, the majority of citizens in the European Union (EU) will be faced with one of the most profound currency changes in modern times with the full introduction, on January 1, 2002 at the latest, of the single European currency, the Euro. The Maastricht treaty stipulated that the new currency be called the ECU, the name of the currently existing European Currency Unit, a basket of the currencies of the 12 EU members existing as at January 1, 1994 (Sweden, Finland and Austria joined the EU only in 1995, and their currencies are not included in the ECU). In December 1995, the heads of government, at their meeting in Madrid, agreed on the new name Euro, in deference mainly to German public opinion, which, as a result of devaluations of the softer EU currencies, perceived the ECU to be a “weak currency” versus the harder currencies within the ECU basket such as the Deutschmark. As Deutschmarks, French Francs and Dutch Guilders etc. pass into the history books, European citizens will have to start calculating incomes and prices in the new Euro, which - unlike many other past currency reforms where, for example, merely superfluous zeros resulting from inflation were eliminated such as in the case of the “new” French Franc and the “new” Zloty - will bear absolutely no resemblance to the old currencies which it will replace. For example, based on exchange rates at the time of writing, the Euro will be worth about 1.92 Deutschmarks and 6.50 French Francs.

This short book describes past historical attempts to create monetary unions, some of which were successful and some of which failed, the technical procedures to be applied and the likely initial participants in connection with the introduction of the new currency, and also outlines the fundamental economic and political reasons for Economic and Monetary Union (EMU), as well as the expected consequences for consumers, business, investors, banks etc. It also discusses the likely impact of the Euro on the overall world economy, as well as the possible negative political and economic effects, in the now highly unlikely event that EMU should fail to materialize.