ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -After a decade of preparations, the euro was launched on 1 January 1999: for the first three years it was an ‘invisible’ currency, only used for accounting purposes and electronic payments. Coins and banknotes were launched on 1 January 2002, and in 12 EU countries the biggest cash changeover in history took place.

Detailed explanation-2: -Although there were concerns regarding a single currency, including worries about counterfeiting and loss of national sovereignty and national identity, 11 countries (Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain) formally joined the EMU in 1998.

Detailed explanation-3: -Non-member usage Four states (Andorra, Monaco, San Marino, and Vatican City) have signed formal agreements with the EU to use the euro and issue their own coins. Nevertheless, they are not considered part of the eurozone by the ECB and do not have a seat in the ECB or Euro Group.

Detailed explanation-4: -On 16 May 2007 the European Commission, backed by the European Central Bank, gave its go-ahead for the introduction in January 2008.

Detailed explanation-5: -These Member States form the euro area. When the euro was first introduced in 1999 – as ‘book’ money –, the euro area was made up of 11 of the then 15 EU Member States.