The European Union was created with the goal of ending the brutal wars between neighbors, which escalated during World War ll. Europeans were determined to prevent massive killing and destruction from ever happening again. West European nations constructed the Council of Europe in 1949. The six founders of the European Union are Germany, France, Belgium, Luxembourg, Italy, and the Netherlands(Theodora). In 1957, the six founders expanded cooperation to different economic sectors. They devised and signed the Treaty of Rome, which created the European Economic Community (EEC). The idea was for people, goods and services to move freely and easily across borders. The European Union enters into its first big international agreement in 1963. It entered into a deal to aid 19 former colonies in Africa (Theodora). The European Union is the world's biggest provider of development assistance to poor countries. In 1972, to maintain monetary stability, European Union members decide to allow their currencies to charge against each other. This exchange rate mechanism (ERM), created in 1972, is the first step towards the introduction of the euro.
In 1973, the six members of the European Union became nine when Denmark, Ireland and the United Kingdom formally enter. Membership of the European Union reaches double figures when Greece ends up joining. 1986 marked the year that Spain and Portugal entered the EU, bringing membership to 12(Theodora).
The Treaty of the European Union is signed in Maastricht. It is a huge European Union milestone, creating set rules for the future single currency, as well as for foreign and security policy, and closer cooperation in justice and home affairs. Under the treaty, the name 'European Union' officially replaced the previous name, 'European Community'. In 1990, Germany became unified and as a result, the former East Germany became part of the European Union. In 1995, Austria, Finland and Sweden joined the European Union (Theodora). The 15 members covered almost all of Western Europe.
In 1991, the Euro was first introduced. It was established by the provisions in the 1992 Maastricht Treaty. In the Maastricht Treaty, Denmark and the United Kingdom were granted exemptions from their request to move to the stage of monetary union that resulted in the introduction of the euro. Economists who helped create or contributed to the euro include: Neil Dowling, Fred Arditti, Robert Mundell, Robert Tollison, and Wim Duisenberg(Eurlex). According to Europarl.su, the name "euro" was officially coined in Madrid on December 16th, 1995. Due to differences in national systems for rounding, all conversion between the national currencies had to be carried out using the process of triangulation via the euro. The rates were determined by the Council of the European Union, based on recommendation from the European Commission based on current market rates. They were set so that one European Currency Unit (ECU) would equal exactly one euro. The European Currency Unit was an accounting unit used by the EU, based on the currencies of the member states; it was not yet a currency in itself.
The euro is the sole currency of 17 European Union member states: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain(Eurlex). Outside the European Union, the euro is the sole currency of Montenegro and Kosovo, and several European smaller states such as Andorra, Monaco, San Marino and the Vatican City. Together the usage of the euro outside the European Union affects over 3 million people.
Since its introduction, the euro has been the second most widely held international reserve currency following the US dollar. The euro was given and built on the status of the Deutsche Mark as the second most important reserve currency. The euro continues to be underweight as a reserve currency in advanced economies while overweight in