- These are the countries which had their currencies replaced by euro: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain.
On our other post we discussed about the weakest currency in the world but on this post we shall be talking about the euro, which is one of the strongest currency in the world.
The euro is the official currency of the eurozone with about 343 million citizens as of 2019. It is the currency used by 19 out of the 21 members of the European Union.
The euro area or zone consists of those Member States of the European Union that have adopted the euro as their currency. Replacing their national currencies with the single currency – the euro.
After the United States dollar, the euro is the second-largest and second-most traded currency in the foreign exchange market.
The euro remains the second most important currency worldwide, but its global market
share decreased by almost 6 percentage points to 33%, reaching the lowest value since the introduction
of the common currency according to a 2013 survey.
It is also the second most widely held international reserve currency after the U.S. dollar. 1
According to the IMF the total of euro held as a reserve in the world at the end of 2008 was equal to $1.1 trillion or €850 billion.
The name euro was officially decided in Madrid on 16 December 1995 but was established by the provisions in the 1992 Maastricht Treaty. A former teacher of French and history is credited with naming the new currency by sending a letter to then President of the European Commission, Jacques Santer, suggesting the name “euro” on 4 August 1995
The currency was introduced to the world financial markets as an accounting currency(traveller’s cheques, electronic transfers, banking, etc.) on 1 January 1999. While on 1 January 2002 the physical euro banknotes and coins were introduced in 12 countries with a total of population of 308 million.
Making it the world’s largest ever monetary changeover, which involved the banking sector, security carriers, retailers, the cash-operated machine industry and the general public.
“I’ve come here as a matter of principle,” said Rene Perrot, a 49-year-old French civil servant, who was among the first to withdraw euros from a Paris cash machine.
“From now onward I have vowed never to make another purchase in francs.”
Euro cash was distributed to banks and retailers as from September 2001 to avoid bottlenecks in the supply chain. As a result, it was widely available in all sectors in the first days of 2002.
By 3 January, 96% of all cash dispensers in the euro area were issuing euro banknotes. One week after the introduction more than half of all cash transactions were in euro.
The president of the European Central Bank, Wim Duisenberg, said the launch represented the dawn of a new era.
“By using the euro notes and coins we give a clear signal of the confidence and hope we have in tomorrow’s Europe,” he said.
The euro is managed and administered by the Frankfurt-based European Central Bank (ECB) and the Eurosystem made up of the central banks of the eurozone countries.
The ECB has sole authority to set monetary policy. while the Eurosystem participates in the printing, minting and distribution of notes and coins in all member states, and the operation of the eurozone payment systems.
The Currencies Replaced By Euro
Now let us talk about the currencies replaced by the euro by mentioning a little history of the former currencies and the countries that abandoned them for the euro
The schilling was established by the schilling Act (Schillingrechnungsgesetz) of December 20, 1924 at a rate of 1 schilling to 10,000 kronen and issued on March 1, 1925. But was abolished in the wake of Germany’s annexation of Austria in 1938.
The schilling was again reintroduced after World War II on November 30, 1945 by the Allied Army. The currency stabilised in the 1950s, with the schilling being tied to the U.S. dollar at a rate of $1 = 26 schilling. The currency was later phased out with the introduction of the euro.
2. Belgian franc
The Belgian franc is also one of the currencies that was replaced by the euro. Belgium adopted its own franc, equivalent to the French franc in 1832. Belgium was the first country to introduce coins made of cupronickel, in 1860.
The Belgian franc was the currency of the Kingdom of Belgium from 1832 until 2002 when the Euro was introduced.
3. Cypriot pound
Also known as the Cypriot lira. It was the currency of Cyprus from 1879 to 2007, when the country adopted the euro.
The currency was introduced in 1879 and was equal in value to the pound sterling and remained at that value until 1972 after gaining independence from the United Kingdom.
It was the British who introduced the Cypriot pound in 1879.
The Cypriot pound was replaced by the euro as official currency of the Republic of Cyprus on 1 January 2008.
4. Dutch guilder
The international usage of the Dutch coin called gulden dates from 1517.
After the Napoleonic wars, the Kingdom of the Netherlands readopted the guilder. In 1817 it became decimalised, with one guilder equal to 100 cents.
The guilder was equal to 605.61 milligrams of fine gold or 9.615 grams of fine silver. Dutch guilder in 1914 could buy roughly the same amount of goods and services as 10.02 U.S. dollars or 8.17 euros in December 2017.
In 2002, the guilder was replaced by the euro at an exchange rate of 2.20371 guilders = 1 Euro.
5. Estonian kroon
The Kroon is another one of the currencies replaced by euro. The kroon became the currency of Estonia on 1 September 1928 after having been a unit of account since 1924.
In 1924, the kroon was pegged to the Swedish krona at par, with a gold standard of 2480 kroon = 1 kilogram of pure gold. In order to secure the credibility of the kroon, the Bank of Estonia exchanged kroon for foreign currency.
In 1928, the first coins of this currency were issued, nickel-bronze 25 senti pieces. On 1 January 2011 the euro replaced the kroon as the official currency of Estonia.
6. Finnish markka
The markka was introduced in 1860 by the Bank of Finland, replacing the Russian ruble at a rate of four markkas to one ruble.
The markka was separated from the Russian ruble and tied to the value of silver in 1865. When the markka was introduced, coins were minted in copper, silver and gold.
During the first weeks of 2002, Finland’s replacement of previous national banknotes with euro banknotes was among the fastest in the euro area.
The finnish markka was the currency of Finland from 1860 until 28 February 2002.
7. French franc
The first franc was a gold coin introduced in 1360 to pay the ransom of King John II of France. In 1803, the Franc germinal was established, creating a gold franc containing 290.034 mg of fine gold.
The outbreak of World War I reduced the franc’s purchasing power by 70% between 1915 and 1920 and by a further 43% between 1922 and 1926.
In January 1960 the French franc was revalued. Taking 100 francs to make one nouveau franc. All franc coins and banknotes ceased to be legal tender in January 2002.
7. German mark
The Deutsche Mark was the official currency of West Germany from 1948 until 1990 and later the unified Germany from 1990 until 2002.
It was first issued under Allied occupation in 1948 to replace the Reichsmark, and served as the Federal Republic of Germany’s official currency from its founding the following year until the adoption of the euro.
The Deutsche Mark was replaced by the Euro in 1999.
9. Greek drachma
The most widely used coin in the Greek world prior to the time of Alexander the Great was the Athenian tetradrachm. Which the helmeted profile bust of Athena on the front and an owl on the back.
The drachma was reintroduced in May 1832, replacing the phoenix. Shortly before the establishment of the modern state of Greece.
Bank notes were issued by the National Bank of Greece from 1841 until 1928. While the Bank of Greece issued notes from 1928 until 2001, when Greece joined the Euro.
10. Irish pound
Although the euro became the currency of the eurozone countries including Ireland on 1 January 1999, it was not until 1 January 2002 that the state began to withdraw Irish pound coins and notes, replacing them with euro.
On 31 December 2001, the total value of Irish banknotes in circulation was €4,343.8 million, and the total value of Irish coins was €387.9 million.
It became known as the Irish pound from 1938.
11. Italian lira
The lira was the currency of Italy between 1861 and 2002. The lira was established at 4.5 grams of silver or 290.322 milligrams of gold.
The following are the currencies replaced by the Italian lira: Lombardy-Venetia pound, the Two Sicilies piastra, the Tuscan fiorino, the Papal States scudo and the Parman lira.
Old lira denominated currency ceased to be legal tender on 28 February 2002.
12. Latvian lats
The lats was first introduced on 3 August 1922, replacing the Latvian rublis at a rate of 1 lats = 50 rubļi. The currency was pegged against the gold standard from its introduction till 1940.
The occupation of Latvia by the USSR would bring an end to the usage of the Lats which was removed by the soviet union at at 13:05 on 25 March 1941.
The lats was reintroduced on 5 March 1993 and was replaced on 1 January 2014 by the euro, at the rate of 0.702804 Lats to 1 Euro.
13. Lithuanian litas
The first litas was introduced on 2 October 1922, replacing the ostmark and ostruble which were issued by German forces during World War I.
In March 1923, the circulation amounted to 39,412,984 litas, backed by 15,738,964 in actual gold and by 24,000,000 in high exchange securities.
The litas was replaced by the Soviet ruble in April 1941 after Lithuania was annexed by the Soviet Union. Officials started to prepare for the introduction of the litas even before independence was declared.
The Bank of Lithuania was established on 1 March 1990. Ten days later Lithuania declared its independence from the Soviet Union.
In late autumn 1991, the first shipments of litas banknotes and coins arrived in Lithuania.
On 2 February 2002 the litas was pegged to the euro at a rate of 3.4528 to 1 (1 LTL = 0.28962 EUR) and was completely replaced by the euro on 1 January 2015.
14. Luxembourgish franc
In 1854, Luxembourg began issuing its own franc, at par with the Belgian franc (BF/FB). The currency was part of the Latin Monetary Union in 1865.
In May 1940, the franc was pegged to the German Reichsmark at a rate of 4 francs = 1 Reichsmark. The Reichsmark was declared legal tender in Luxembourg on 26 August 1940 and was later made the only legal tender in Luxembourg on 20 January 1941.
But the Luxembourg franc was later reestablished in 1944. Old franc coins and notes lost their legal tender status on 28 February 2002.
15. Maltese lira
An imperial order-in-council introduced British currency (pound sterling) to Malta in 1825 and was valued at 12 scudi of the local currency. The name “lira” was used on banknotes beginning in 1973,
The lira was replaced by the euro on 1 January 2008, as part of the Economic and Monetary Union of the European Union.
16. Portuguese escudo
Escudo was initially introduced in 1722 with denominations including 1⁄2 escudo, 2, 4, and 8 escudos and were minted generally during the 18th century.
During World War II, escudos were heavily sought after by Nazi Germany, through Swiss banks, as foreign currency to make purchases to Portugal and other neutral nations.
It was the currency of the country until its removal from circulation on 28 February 2002.
17. Slovak koruna
Slovakia switched its currency from the koruna to the euro on 1 January 2009, at a rate of 30.1260 korunas per euro.
The Slovak koruna was the currency of Slovakia between 8 February 1993 and 31 December 2008.
18. Slovenian tolar
The tolar was the currency of Slovenia from 8 October 1991 until the introduction of the euro on 1 January 2007. The tolar was introduced on 8 October 1991. It replaced the 1990 (Convertible) version of Yugoslav dinar at parity.
19 Spanish peseta
The peseta was formally introduced as a currency unit in 1868. It replaced the old Spanish peso currency. Along with the French franc, it was also a de facto currency used in Andorra.
The peseta was replaced by the euro in 2002, following the establishment of the euro in 1999.