Ecu
Ecu in Europe
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Definition of Ecu
In accordance with the work A Dictionary of Law, this is a description of Ecu : (European Currency Unit)
n.
A currency medium and unit of account of the *European Monetary System, which was replaced by the euro in 1999 (See European Monetary Union). Its value was calculated from the values of the currencies of individual member states of the European Union, The ECU was not a unit of currency as such, although some prices were quoted in ECU by the European Commission and other bodies. The ECU was used in the *Exchange Rate Mechanism, and some bonds were issued by member states in ECUs.
Description of ECU (European Currency Unit)
The Concise Publication of the European Union describes ecu (european currency unit) in the following terms: [1] The now defunct ECU was a transitional artificial currency which existed from 1981 until it was replaced by the euro at the beginning of 1999. Its predecessor, the European Unit of Account (EUA) was a mere book-keeping device to avoid expressing EC statistics (including the budget) in dollars or in D-Marks. Shortly after the introduction of the European Monetary System in 1979 the ECU superseded the EUA and assumed some embryonic characteristics of a real currency. It was, for example, occasionally used as a denominator for bank deposits, travellers cheques and international money and bond market transactions. It was not, however, legal tender, nor was it available in the form of paper or coin. Its value was derived from aggregating fractions of the EC's national currencies, each currency's contribution to the whole being weighted according to the individual member state's GDP, adjusted for its share of intra-Community trade (see more in this European publication). The composition of this ECU'basket' was fixed in 1993 to eliminate at least one variable in the run-up to the introduction of the single currency.
The currencies of all the existing EU member states formed part of the ECU'basket', regardless of whether they also participated in the Exchange Rate Mechanism or would be absorbed into the single currency. The 'basket' therefore included the British pound, the Danish krone and the Greek drachma. On the other hand, the currencies of the countries that did not join the EU until 1995 (Austria, Finland and Sweden) were excluded, even though they would all shortly be converted into euros.
The Maastricht Treaty provided that the ECU would become the new European single currency when it was finally launched. In 1995, however, the European Council agreed to abandon the name in favour of the euro, in deference to German concern that the ECU would not be credible, given its track record of repeated devaluation occasioned by the weakness of several of its components, notably the lira, the peseta, the escudo and the drachma. So was lost the opportunity to resurrect a romantic old name, for the écu had been an ancient French coin. In January 1999 the ECU was converted to the euro on a 1-for-1 basis, whereupon it vanished for ever.
ECU and the European Union
Resources
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See Also
European Currency Unit
Resources
Notas y References
Based on the book "A Concise Publication of the European Union from Aachen to Zollverein", by Rodney Leach (Profile Books; London)
Professional Content and Learning Tools
☑️ Lawi offers educational solutions and professional insight, integrating content, tools, and practical technology to promote lifelong learning, personal and professional improvement, and human progress through knowledge. Our collections feature resources and solutions from a wide range of subject areas, from management and finance to law and cybersecurity. This text is only a brief introduction. If you would like us to expand on this content, please let us know in the comments. If you’re finding our platform and publications valuable, share it with a colleague or friend, leave a comment and consider subscribing if you haven’t already (thanks!). There are group discounts, gift options, and referral bonuses available.