Comments on "Pre-euro and Non-euro Currencies"

[Galapagos]

So, we still have 24 European currencies left outside the euro system. I've only counted countries who have at least half their territory inside geographical Europe. None of these currencies are related, for instance, Russia, Ukraine, and Transnistria all use their own national rouble.

Who will be next among these countries to join the Euro-zone?

[chrisild]

The list combines EU member states and several countries that are not in the European Union. Only the former can become "euro countries" in the sense of joining the currency union. A non-EU country may of course start using the euro instead of some other currency, but that would be similar to the "unidirectional" dollarization of various Latin American countries.

Let's see ... In order to become a country, the currency of that country needs to be, among other requirements, in the Exchange Rate Mechanism (ERM-II) for at least two years, and stay within the +/- 15% fluctuation band. Currently four member states are in ERM-II: Denmark (with an even narrower band of +/- 2.25%), Estonia, Latvia and Lithuania.

Christian

[chrisild]

So no new euro-using countries on the horizon for 2010, then.

Nah, don't think so. Then again, we did not have any new euro countries between Jan-2001 (when Greece joined) and Jan-2007 (when Slovenia got in). There may well be new "euro territories" however. From what I have read, the Netherlands Antilles will cease to exist on 10 October next year, and some of the islands will then introduce the euro. Without issuing their own coins of course.

By the way, some of the countries you listed use the euro in some sense. Bulgaria and Estonia for example do have "their own" currencies, but AFAIK they are (unilaterally) "tied" to the euro ...

Christian

[Figleaf]

The basic framework is ready. Some remarks.

• I restricted the table to countries issuing euros, even if only as pseudo coins
• I used country names as they appear in English
• I used the denominations as they appear on the coin
• I did not capitalize denominations, except those of Germany and Austria, because they are capitalized in German
• I used singular forms, even where they don't exist on coins
• I did not include denominations used only before the penultimate coin reform
• Coin reforms are as per Krause

These are not final decisions and I may have sinned against the above. Fire away.

Peter

[Galapagos]

We also need some smaller lists. I notice that your list (see related topic) includes the Vatican, San Marino, and Monaco, but not Andorra, though you mention that there are other countries and regions in which the euro circulates. How many categories of euro usage should we have, and therefore how many lists or sublists?

We have the official EU member countries of Euroland; the euro-using overseas regions of those countries just mentioned; and those countries that use the euro unofficially (only Montenegro and Kosovo that I know of). Now then, does Andorra fit in any of these categories, or is it in a category of its own? And are there any other categories?

Those EU members due to adopt the euro could be shown in a separate, simpler list, with proposed date of adoption + the ERM phase they are in. Another small list could show candidate members of the EU, and those applying to be candidate members. We would then, at a glance, get an idea of the development of the euro area, past, present and future. What do you think?


The unwieldy title "Overview of the history of the euro coins" is my fault, of course.

What do members think we should use for a snappier title? Simply "An Overview of the Euro"?

[Figleaf]

How about "euro legacy currencies?"

For the statistically inclined: a quick calculation of the average introduction and succession years in the table gave as a result that the average life span of the legacy currencies is 2001-1941=60 years only. Taking medians instead (which means getting rid of funny outliers), the result is 1999-1949=50 years. Taking out Monaco, San Marino and the Vatican changes the results to 2001-1939=62 average and 1999-1955=44 median.

The median figures indicate the importance of the second world war and the immediately following years of recovery for coinage reforms. No doubt, when more countries issue euros we will see the growth of a second population, whose currency was last reformed around 1993 as a consequence of the implosion of the Soviet empire and its periphery.

Peter

[BCNumismatics]

  In addition to the Gibraltarian Pound,there is also the Guernsey Pound,the Jersey Pound,& the Manx Pound.

The Netherlands Antilles islands will be using the US$ instead of the Euro,even though they will formally become part of the Netherlands in the constitutional sense of the word.

Aidan.

[chrisild]

The Netherlands Antilles islands will be using the US$ instead of the Euro,even though they will formally become part of the Netherlands in the constitutional sense of the word.

Wrong. The situation is actually pretty complex, see here:
http://www.worldofcoins.eu/forum/index.php/topic,5003.0.html

Bottom line: The Netherlands Antilles (which currently use local currencies that are pegged to the US dollar) will cease to exist. Well, the islands will still be there but the autonomous region that has this name will "go" in October.

Christian

[chrisild]

Have a read here; http://en.wikipedia.org/wiki/Dissolution_of_the_Netherlands_Antilles .

Well, if you read that article, you will know why it does not make any sense to write that "The Netherlands Antilles islands will be using the US$ instead of the Euro,even though they will formally become part of the Netherlands in the constitutional sense of the word" as you did ...

Christian

[chrisild]

It is of course pretty difficult (if not impossible) to predict when a non-euro country will join the currency union. An EU member state that wants to be part of the euro area needs to meet certain conditions, the so-called convergence criteria (see attachment). Note that these criteria are used with a certain degree of flexibility. That being said, here are the rough estimates regarding possible euro area entry dates.

(Originally posted in Dec-2009, updated in June 2013)

These are the three member states that currently participate in the European Exchange Rate Mechanism (ERM-II). The default fluctuation band is +/- 15 percent around a central exchange rate. Denmark opted out and is thus, like the UK, not obliged to introduce the euro - on the other hand it has a much narrower (bilaterally acknowledged) fluctuation band, only +/- 2.25 percent. Other member states observe (unilaterally) even narrower bands.
Denmark - opt-out
Latvia - likely to join in Jan-2014
Lithuania - maybe 2015

Here are the six member states that in theory have to introduce the euro at some point but are not in ERM-II yet. (Becoming an ERM-II member currency is something that happens almost "ad hoc", to avoid currency speculation. So don't expect the Council or the ECB to say that Country X will join the ERM in, say, two months or one year ...)
Bulgaria - unilateral peg, no date
Czech Republic - somewhat euroskeptic, no date
Hungary - maybe 2020
Poland - aims at 2017
Romania - aims at 2019
Sweden - quite euroskeptic*, maybe ... later

Among the countries that are EU "candidates" or have submitted membership applications, there are two that I would like to mention here:
Croatia is a "candidate" and will become an EU member on 1 July 2013. As for the euro, they know it will come eventually, and that is about it.
Iceland had plans, a few years ago, to use the euro. Unilateral introduction would be one option, but that would also be possible with the Canadian dollar, or the Norwegian krone, for example. Officially the country is in membership negotiations with the European Union, but neither side is interested in concluding those negotiations. Iceland is a member of the European Economic Area anyway.

* Sweden is theoretically obliged to introduce the euro once the country meets the convergence criteria. But the government observes the result of the 2003 referendum which resulted in a No, and there will not be a new referendum in the foreseeable future.

Again, all these dates and schedules need to be handled with some care. What you hear or read today may be outdated next month ...

Christian

[chrisild]

Thanks for your new/updated overviews regarding both "Pre-euro and Non-euro Currencies" and "The euro: Present and future"!   And while I write this reply, I also see how outdated my previous post here (from Dec 2009) now is. Ah well, forget about those dates; but the convergence criteria still apply ...

Christian

[<k>]

As of 2015, we have 25 European countries using the euro as their sole official currency. If we exclude Andorra, Monaco, San Marino and Vatican city, that leaves 21 "proper" countries.

As of 2015, we have 23 European countries using their own currency. If we exclude Gibraltar and Liechtenstein, that leaves 21. Or maybe we should exclude Transnistria too, giving 20. I've included Russia, even though much of its territory is in Asia. I've excluded Turkey, as only a tiny proportion of its territory is in Europe.

An interesting balance. We live in troubling times, though, and I do expect one or more country to leave the euro zone by 2020. That's because the issues from 2008 have not truly been solved. QE has probably created a few problems as well as solving a few.

[chrisild]

As of 2015, we have 25 European countries using the euro as their sole official currency. If we exclude Andorra, Monaco, San Marino and Vatican city, that leaves 21 "proper" countries.

I would count a little differently: We have 19 euro area member states now. Then there are those four non-EU countries that have monetary agreements with the European Union. What other countries do is, more or less, their business ...

We live in troubling times, though, and I do expect one or more country to leave the euro zone by 2020.

Some people have been saying for fifteen years that the euro area will fall apart. Much to their chagrin, that has still not happened yet. Of course the political "framework" may change, and just as the UK will sooner or later get out, some euro country may decide to also leave the EU. One decisive issue will be whether extremist parties will get political majorities.

Christian

[Figleaf]

Your post is pretty much still up to date, Christian. Only the ERM II part needs some updating (Denmark is the only remaining EU member, Kosovo and Montenegro use it unilaterally). Your predictions came out fine, which is a better record than mine and I got paid for predicting

In my mind, there is a new candidate on the horizon. Ukraine. The "EU part" seems to be Bundesbank territory now and the EU has a political interest in showcasing the country, "proving" the "Russian" part wrong. That amounts to pressure for an early EU membership and a willingness on both sides to introduce the euro as quickly as possible (i.e. when the military situation stabilises one way or the other). Inflation is currently at over 20% trending up and expected to reach 30% by July. Watch for an inflection point in the second half of 2015. If that happens, the EU has a new candidate member.

Peter

[chrisild]

Guess it makes sense to keep the topic that we comment on here ("Pre-euro and Non-euro Currencies") updated, but we don't have to do it with the posts in this "Comments" topic. Your comment just updated mine, so to say. Let me also point at an interview with Mario Draghi (Handelsblatt, 02-Jan-2015, English version): "A breakup of the euro area? That will not happen." Then again, we have Europeans in Europe, but also a nationalist renaissance ...

As for Ukraine, I don't know. In my opinion it is important to give the country some kind of perspective also with regard to the European Union. But I think the example of Cyprus was a lesson about how letting a part of a country in does not help solving the conflict.

Christian