Euro Series- Post#1 Creation of Euro

After several rounds of meetings, discussions over the years, the Euro virtually came into existence at midnight on 1 January 1999 when the exchange rates between the currencies of the 11 member countries were frozen at the current rates along with a fixed value against Euro. Greece entered the Eurozone in 2001 and 5 other European countries joined later making the total count of Eurozone countries to 17.

Some major stringent conditions to be met for entering the Eurozone

• annual budget deficits not to exceed 3% of gross domestic product
• maintain the public debt under 60%.
• European Central Bank was remitted with setting interest rates. 
• Each country would retain its own tax policies, budgets and banks and issue their own bonds.

Motivating factors that lead to the creation of Euro

•  to reduce currency exchange rate volatility leading to price stability, growth and trading benefits..
• bring liberalization in capital movements across the member countries. 
• A stronger presence for the EU in the global economy.

Why was UK reluctant to join the Eurozone?
Public opinions opposed the membership of Eurozone. Besides this 4 out of 5 Economic tests on the British economy were not passed which were earmarked by the then UK cabinet as essential requirements for Britain to adopt Euro. also the political sentiment within Britain has been negative with respect to joining the Euro.