Everything about The European Currency Unit totally explained
The
European Currency Unit (
₠;
ECU) (the word ECU, pronounced either /eky/, /ɛkʊ/, or /əː'siː'uː) was a basket of the currencies of the
European Community member states, used as the unit of account of the European Community before being replaced by the
euro. The
European Exchange Rate Mechanism attempted to minimize fluctuations between member state currencies and the ECU. The ECU was also used in some international financial transactions.
The ECU was conceived on
13 March 1979 as an internal accounting unit. It had the
ISO 4217 currency code XEU.
On
January 1 1999, the
euro (with the code
EUR) replaced the ECU, at the value EUR 1 = XEU 1. Unlike the ECU, the euro is a real
currency, although not all member states participate (for details on Euro membership see
Eurozone). Two of the countries in the ECU basket of currencies,
UK and
Denmark, didn't join the eurozone. On the other hand,
Finland and
Austria joined the Eurozone from the beginning although their currencies were not part of the ECU basket (since they'd joined the EU in 1995, two years after the ECU composition was "frozen").
Due to the ECU being used in some international financial transactions, there was a concern that foreign courts might not recognize the euro as the legal successor to the ECU. This was unlikely to be a problem, since it's a generally accepted principle of
private international law that states determine their currencies, and that therefore states would accept the
European Union legislation to that effect. However, for abundant caution, several foreign jurisdictions adopted legislation to ensure a smooth transition. Of particular importance here were the
USA states of
Illinois and
New York, under whose laws a large proportion of international financial contracts are made. Both these states passed legislation to ensure that the euro was recognized as successor to the ECU.
Although the acronym ECU is formed from
English words, at the same time the word
écu was a reference to an ancient
French coin of the same name. That was one (perhaps the main) reason that a new name was devised for its successor currency,
euro, which was felt not to favour any single language.
The currency's symbol, ₠ (
U+20A0), comprises an interlaced C and E, which are the initial letters of the phrase '
European Community' in many
European languages. However, this symbol wasn't widely used: few systems at the time could render it and in any case banks preferred (as with all currencies) to use the ISO code XEU.
National currency weights to the ECU value>
| Currency |
13.03.1979-
16.09.1984 |
17.09.1984-
21.09.1989 |
21.09.1989-
31.12.1998 |
| BEF |
9.64% |
8.57% |
8.183% |
| DEM |
32.98% |
32.08% |
31.955% |
| DKK |
3.06% |
2.69% |
2.653% |
| ESP |
- |
- |
4.138% |
| FRF |
19.83% |
19.06% |
20.316% |
| GBP |
13.34% |
14.98% |
12.452% |
| GRD |
- |
1.31% |
0.437% |
| IEP |
1.15% |
1.20% |
1.086% |
| ITL |
9.49% |
9.98% |
7.840% |
| LUF |
- |
- |
0.322% |
| NLG |
10.51% |
10.13% |
9.98% |
| PTE |
- |
- |
0.695% |
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