The European Currency Unit (French: Unité de compte européenne, Spanish: Unidad Monetaria Europea, German: Europäische Währungseinheit ; ⟨₠⟩, ECU, or XEU) was a unit of account used by the European Economic Community and composed of a basket of member country currencies. The ECU came in to operation on 13 March 1979 and was assigned the ISO 4217 code.[1] The ECU replaced the European Unit of Account (EUA) at parity in 1979, and it was later replaced by the euro (EUR) at parity on 1 January 1999.[1]
This infobox shows the latest status before this currency was rendered obsolete.
As a unit of account, the ECU was not a circulating currency and did not replace or override the value of the currency of EEC member countries. However, it was used to price some international financial transactions and capital transfers.[2]
Using a mechanism known as the "snake in the tunnel", the European Exchange Rate Mechanism was an attempt to minimize fluctuations between member state currencies—initially by managing the variance of each against its respective ECU reference rate—with the aim to achieve fixed ratios over time, and so enable the European Single Currency (which became known as the euro) to replace national currencies.[citation needed]
Hard ECU proposal
In 1990 the British Chancellor of the ExchequerJohn Major proposed the creation of a 'hard' ECU, which different national currencies could compete against and, if the ECU was successful, could lead to a single currency.[3] The move was seen by France and Germany as a wrecking tactic, especially when the increasingly EuroscepticThatcher announced her outright opposition to European Economic and Monetary Union (EMU), and the idea was abandoned.[3]
Euro replaces the ECU
On 1 January 1999, the euro (with the code EUR and symbol ⟨€⟩) replaced the ECU at par (one-to-one).[1] Unlike the ECU, the euro is a real currency, although not all member states participate (for details on euro membership see Eurozone). Two of the countries in the ECU basket of currencies, UK and Denmark, did not join the eurozone, and a third, Greece, joined late. On the other hand, Finland and Austria joined the eurozone from the beginning, even though their currencies were not part of the ECU basket, since they had joined the EU in 1995, two years after the ECU composition was "frozen".
Legal implications
Due to the ECU being used in some international financial transactions, there was a concern that foreign courts might not recognize the euro as the legal successor to the ECU. This was unlikely to be a problem, since it is a generally accepted principle of private international law that states determine their currencies, and that therefore states would accept the European Union legislation to that effect. However, for abundant caution, several foreign jurisdictions adopted legislation to ensure a smooth transition. Of particular importance, the U.S. states of Illinois and New York adopted legislation to ensure a large proportion of international financial contracts recognized the euro as the successor of the ECU.[4]
Symbol and name
The ECU's symbol, ₠, consists of an interlaced C and E —the initials of "European Community" in many languages of Europe. However, the symbol was not widely adopted. Few computer systems utilized by financial institutions and governments could render it, and commercial payment systems were obliged to use the ISO code, XEU, as with other currencies without widely recognised currency symbols. The Unicode designation for the ECU symbol (U+20A0₠EURO-CURRENCY SIGN) was not implemented on many personal computer operating systems until the release of Unicode v1.1 in May 1998[contradictory], which also introduced the euro sign (U+20AC€EURO SIGN). Microsoft did include the ECU symbol in many of its European versions of Windows beginning in the early 1990s; however, accessing it required the use of an Alt code, and not all typefaces provided a glyph. By 2009, Microsoft referred to the ECU symbol as "historical".[5] Support among other operating systems, including Macintosh operating systems, was inconsistent.
Although the acronym for ECU is formed from the English name of the unit, the écu was a family of gold coins minted during the reign of Louis IX of France. The name of the ECU's successor, the euro, was chosen because the name did not favor any single language, nation, or historical period.[6]
Coins and notes
As the ECU was only an electronic unit of account and not a full currency, it did not have any official coins or notes that could be used for everyday transactions. However, various European countries and organizations like the European Parliament made commemorative and mock-up coins and notes. A common theme on the coins was usually celebrating European unity, such as celebrating membership of the European Union.
Gibraltar issued commemorative coins from 1993 through 1996,[7] though these were (nominally) legal tender only in Gibraltar, which uses the pound sterling.
^Scott, David L. (September 2003). Wall Street Words: An Essential A to Z Guide for Today's Investor (3rd ed.). New York: Houghton Mifflin. p. 130. ISBN9780395886076.
^Lenihan, Niall (1998). "The legal implications of the European Monetary Union under U.S. and New York Law". ec.europa.eu. Directorate General for Economic and Financial Affairs. Retrieved 6 February 2022.
^"euro Currency Symbol FAQ". Microsoft. 25 June 2009. from the original on 5 December 2012. Retrieved 18 August 2020.
^Ungerer, Horst (July 1997). A Concise History of European Monetary Integration: From EPU to EMU. Westport, Connecticut: Quorum Books. p. 286. ISBN9780899309811.
^"Gibraltar Coinage (Ecu) Act, 1990". HM Government of Gibraltar: Laws of Gibraltar. 14 June 2007 [14 June 2007: Commencement date of latest amending enactment]. (PDF) from the original on 2 April 2022. Retrieved 2 April 2022.
^Werner, Antweiler (7 December 2001). "The EURO - Europes's New Currency". UBC Sauder School of Business. Retrieved 19 August 2020.
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XEU redirects here For the radio station branded as XEU see XHU FM Not to be confused with the euro The European Currency Unit French Unite de compte europeenne Spanish Unidad Monetaria Europea German Europaische Wahrungseinheit ECU or XEU was a unit of account used by the European Economic Community and composed of a basket of member country currencies The ECU came in to operation on 13 March 1979 and was assigned the ISO 4217 code 1 The ECU replaced the European Unit of Account EUA at parity in 1979 and it was later replaced by the euro EUR at parity on 1 January 1999 1 European Currency UnitISO 4217CodeXEUUnitSymbol NicknameECU needs IPA DemographicsDate of introduction13 April 1979ReplacedEuropean Unit of AccountDate of withdrawal31 December 1998Replaced byEuroUser s European Economic Community 1979 1998 European Union 1993 1998 ValuationPegged with8 currencies 1979 1989 12 currencies 1989 1998 This infobox shows the latest status before this currency was rendered obsolete As a unit of account the ECU was not a circulating currency and did not replace or override the value of the currency of EEC member countries However it was used to price some international financial transactions and capital transfers 2 Contents 1 Exchange rate 2 Hard ECU proposal 3 Euro replaces the ECU 3 1 Legal implications 4 Symbol and name 5 Coins and notes 6 Currency basket 7 See also 8 References 9 External linksExchange rate EditUsing a mechanism known as the snake in the tunnel the European Exchange Rate Mechanism was an attempt to minimize fluctuations between member state currencies initially by managing the variance of each against its respective ECU reference rate with the aim to achieve fixed ratios over time and so enable the European Single Currency which became known as the euro to replace national currencies citation needed Hard ECU proposal EditIn 1990 the British Chancellor of the Exchequer John Major proposed the creation of a hard ECU which different national currencies could compete against and if the ECU was successful could lead to a single currency 3 The move was seen by France and Germany as a wrecking tactic especially when the increasingly Eurosceptic Thatcher announced her outright opposition to European Economic and Monetary Union EMU and the idea was abandoned 3 Euro replaces the ECU EditOn 1 January 1999 the euro with the code EUR and symbol replaced the ECU at par one to one 1 Unlike the ECU the euro is a real currency although not all member states participate for details on euro membership see Eurozone Two of the countries in the ECU basket of currencies UK and Denmark did not join the eurozone and a third Greece joined late On the other hand Finland and Austria joined the eurozone from the beginning even though their currencies were not part of the ECU basket since they had joined the EU in 1995 two years after the ECU composition was frozen Legal implications Edit Due to the ECU being used in some international financial transactions there was a concern that foreign courts might not recognize the euro as the legal successor to the ECU This was unlikely to be a problem since it is a generally accepted principle of private international law that states determine their currencies and that therefore states would accept the European Union legislation to that effect However for abundant caution several foreign jurisdictions adopted legislation to ensure a smooth transition Of particular importance the U S states of Illinois and New York adopted legislation to ensure a large proportion of international financial contracts recognized the euro as the successor of the ECU 4 Symbol and name EditThe ECU s symbol consists of an interlaced C and E the initials of European Community in many languages of Europe However the symbol was not widely adopted Few computer systems utilized by financial institutions and governments could render it and commercial payment systems were obliged to use the ISO code XEU as with other currencies without widely recognised currency symbols The Unicode designation for the ECU symbol U 20A0 EURO CURRENCY SIGN was not implemented on many personal computer operating systems until the release of Unicode v1 1 in May 1998 contradictory which also introduced the euro sign U 20AC EURO SIGN Microsoft did include the ECU symbol in many of its European versions of Windows beginning in the early 1990s however accessing it required the use of an Alt code and not all typefaces provided a glyph By 2009 Microsoft referred to the ECU symbol as historical 5 Support among other operating systems including Macintosh operating systems was inconsistent Although the acronym for ECU is formed from the English name of the unit the ecu was a family of gold coins minted during the reign of Louis IX of France The name of the ECU s successor the euro was chosen because the name did not favor any single language nation or historical period 6 Coins and notes EditAs the ECU was only an electronic unit of account and not a full currency it did not have any official coins or notes that could be used for everyday transactions However various European countries and organizations like the European Parliament made commemorative and mock up coins and notes A common theme on the coins was usually celebrating European unity such as celebrating membership of the European Union Gibraltar issued commemorative coins from 1993 through 1996 7 though these were nominally legal tender only in Gibraltar which uses the pound sterling Currency basket EditComposition of 1 ECU 1 Period No of national currency units weight i e contribution to total value 1979 1984 a BEF DEM DKK FRF GBP IEP ITL NLG LUF b 3 80 9 64 0 828 32 98 0 217 3 06 1 15 19 83 0 0885 13 34 0 00759 1 15 109 9 49 0 286 10 51 1984 1989 g BEF DEM DKK FRF GBP IEP ITL NLG LUF b 3 85 8 57 0 719 32 08 0 219 2 69 1 31 19 06 0 0878 14 98 0 00871 1 20 140 9 98 0 256 10 13 1989 1998 d BEF DEM DKK FRF GBP IEP ITL NLG LUF ESP GRD PTE3 301 8 183 0 6242 31 915 0 1976 2 653 1 332 20 306 0 08784 12 452 0 008552 1 086 151 8 7 84 0 2198 9 87 0 13 0 322 6 885 4 138 1 44 0 437 1 393 0 695 1999 EUR 8 1 0 100 Period from 13 March 1979 16 September 1984 a b The Luxembourg franc was in a currency union with the Belgian franc thus represented in the BEF s weight and percentage of the ECU Period from 17 September 1984 21 September 1989 Period from 21 September 1989 31 December 1998 See also Edit European Union portal Money portal Numismatics portalAsian Monetary Unit Eco currency Green pound World currency unitReferences Edit a b c d European Currency Unit ECU UBC Sauder School of Business Retrieved 25 April 2020 Scott David L September 2003 Wall Street Words An Essential A to Z Guide for Today s Investor 3rd ed New York Houghton Mifflin p 130 ISBN 9780395886076 a b Major John 24 July 1999 John Major The Autobiography London HarperCollins pp 150 51 ISBN 9780002570046 Lenihan Niall 1998 The legal implications of the European Monetary Union under U S and New York Law ec europa eu Directorate General for Economic and Financial Affairs Retrieved 6 February 2022 euro Currency Symbol FAQ Microsoft 25 June 2009 Archived from the original on 5 December 2012 Retrieved 18 August 2020 Ungerer Horst July 1997 A Concise History of European Monetary Integration From EPU to EMU Westport Connecticut Quorum Books p 286 ISBN 9780899309811 Gibraltar Coinage Ecu Act 1990 HM Government of Gibraltar Laws of Gibraltar 14 June 2007 14 June 2007 Commencement date of latest amending enactment Archived PDF from the original on 2 April 2022 Retrieved 2 April 2022 Werner Antweiler 7 December 2001 The EURO Europes s New Currency UBC Sauder School of Business Retrieved 19 August 2020 External links EditEconomic and Monetary Union at the European Central Bank Retrieved from https en wikipedia org w index php title European Currency Unit amp oldid 1151849888, wikipedia, wiki, book, books, library,
