Resource Hub
888-891-8049
6:00-4:30PM PST MON-FRI

History of the Euro – Currencies Replaced by the Euro

by Abdullah Beydoun

What did the millennial say when he saw a floppy disk from 1995? “Look, someone 3D printed a save icon!” This little quip highlights the fact that it’s very easy to forget our past. In just a few years, a decade, or in the span of a generation, entire technologies can be lost, regimes can change, countries can restructure their politics and entire currencies can vanish into the ether. Dissolving a national currency is no laughing matter, so for the sake of documentation, we’ve created this article to remind people of how currencies existed in Europe before the EU.

Who Has Opted Out of the Euro?

To understand how things have changed under the European Union (and why millennials have no idea about it), we start with a look at the Maastricht Treaty of 1992. This was the beginning of the negotiations that led to the political and monetary unification of European nations that took place at the beginning of the 21st century. During negotiations of this treaty, the United Kingdom managed to opt out of adopting the Euro as its currency, retaining the General British Pound as its chief currency despite its membership in the EU. Denmark also retained the right to decide if it would join the Euro, along with Sweden, and both held national referendums in the early 2000s where they voted against adopting the Euro and retained their national currency.

What Currencies Have Been Replaced?

The Euro replaced a total of 19 currencies across Europe, unifying the monetary systems of nations in a way that the world has never seen before.

Here’s a list of countries that opted in to the new currency and the currencies they gave up:

Austria – Austria gave up its schilling completely when the EU was established in 2002, converting to the Euro at a rate of 13.76 schillings = 1 Euro.

Belgium – Belgium traded in francs up until 2002 when it exchanged its currency for Euros at a rate of 40.339 = 1 Euro.

Cyprus – Cypriot Pounds were in circulation until 2008, and were one of the more highly valued currencies in Europe. When Cyprus gave up the pound for the Euro, it was for a favorable exchange rate of 0.585 pounds = 1 Euro.

Netherlands – Dutch guilders were relatively stable and valuable in the foreign exchange markets, but in 2002, the Netherlands gave up its own currency to adopt the Euro at an exchange of 2.20 guilders = 1 Euro.

Estonia – Estonian kroons were a relatively weak currency when they were swapped for Euros in 2011, at a rate of 15.6 kroons = 1 Euro.

Finland – Finland adopted the Euro at its inception, trading in Finnish markka for the new Euro currency with an exchange rate of 5.94 markka = 1 Euro.

France – French francs were traded openly in France, Andorra and Monaco prior to the EU. France gave up its influence to become part of the European Union, trading francs for Euros at 6.55 francs = 1 Euro.

Germany – Germany is the economic powerhouse of the EU and one of its most important founding states. German marks were traded for Euros in 2002 at a rate of 1.95 marks per 1 Euro.

Greece – The atrocious exchange rate between drachma and Euros is a telltale sign of the economic weakness that caused major problems for the EU over the last decade. Greece traded in its drachmas for Euros in 2002 at a rate of 340.75 drachmas per 1 Euro.
Ireland – The Irish Pound had the symbol IEP and was exchanged for Euros in 2002 at a rate of 0.78 pounds per 1 Euro.

Italy – The Italian economy was in a poor state at the commencement of the European Union. The country had supported the lira for hundreds of years, but traded them in at a rate of 1936.27 lira per 1 Euro in 2002.

Latvia – Latvia adopted the Euro in 2014, exchanging Latvian lats for Euros at a rate of 0.702 lats for 1 Euro

Lithuania – Lithuania joined the EU in 2015 amidst concerns for its struggling currency. It was quick to adopt the Euro at an exchange rate of 3.45 lithuanian litas = 1 Euro.

Lithuania – Lithuania joined the EU in 2015 amidst concerns for its struggling currency. It was quick to adopt the Euro at an exchange rate of 3.45 lithuanian litas = 1 Euro.
Luxembourg – One of the founding members of the European Union, Luxembourg gladly traded in its francs for the more valuable Euro at an exchange rate of 40.33 francs per Euro.

Malta – Malta joined the EU in 2008, cashing in its highly valuable lira currency for Euros at a rate of 0.429 lira per 1 Euro.

Portugal – Portuguese escudo were not widely traded when they existed, and the Portuguese were only too happy to trade in the relatively weak currency for Euros at a rate of 200 escudo per 1 Euro in 2002.

Slovakia – Slovakia adopted the euro in 2009, opting out of the Slovak koruna as its national currency. A smooth adoption took place at an exchange rate of 30.126 korunas per 1 Euro.

Slovenia – Slovenia’s struggling economy welcomed the Euro at an exchange rate of 239.64 Slovenian tolars per 1 Euro when they joined the EU in 2007.

Spain – The Spanish peseta was replaced by the Euro in 2002 at an exchange rate of 166.386 pesetas per 1 Euro.

Conclusion

The introduction of the Euro created a lot of changes in the landscape of European currency and monetary policy. The differences in exchange rates and currency valuations really highlights the differential wealth between the countries of the European Union, and those differences can still be felt today as countries try to navigate political tensions in a fragile geopolitical union. Still, we would do well to remember these currencies – who knows whether they’ll be re-established in the future?

© BNWORLD, Inc.. All rights reserved.