The Euro summit is the meeting of the heads of state or government of the member states of the eurozone. It is distinct from the EU summit held by the European Council, the meeting of all EU leaders; the Euro summit began as an offshoot of the Euro Group, the meeting of the eurozone member's finance ministers. French President Nicolas Sarkozy called for the Euro summit to replace the Euro Group as a "clearly identified economic government" for the eurozone, stating it was not possible for the eurozone to continue without it; the eurozone economic government would discuss issues with the European Central Bank, which would remain independent. Sarkozy stated that "only heads of state and government have the necessary democratic legitimacy" for the role; this idea was based on the meeting of eurozone leaders in 2008 who met to agree a co-ordinated eurozone response to the banking crisis. They first met in response to the debt crisis. Subsequent meetings took place in March 2010, May 2010, March 2011, July 2011 and October 2011.
In the October 2011 meeting, it was agreed to formalise the Euro summit, as at least twice yearly meeting. This change was formalised in the 2012 Treaty on Stability and Governance in the Economic and Monetary Union. Since this formalisation, Heads of State or Government have failed to meet this target of twice yearly meetings in 2013, 2014, 2016 and 2017. A Euro summit President, separate from the Euro Group President, would be elected at the same time as the President of the European Council and under the same rules; until such an election takes place, the European Council President fulfils that role. In October 2011, the Eurozone head of states agreed to meet at least twice per year, as part of measures to improve governance of the Eurozone. Meetings were chaired by president Herman Van Rompuy from March 2010 to November 2014. Donald Tusk has been the Euro Summit president since December 1, 2014, ends his term on May 31, 2017; the table below lists the summary reports of all previous Euro Summits.
New procedure rules for Euro summits were adopted on 14 March 2013, regulating the Euro Summit shall meet at least twice a year, convened by its President on preferably one of the same dates as the EU summits. However, for unknown reasons, only one Euro Summit meeting per year took place in 2013 and 2014, none took place in 2016. In its informal capacity, the de facto summit President has been the European Council President, meaning that Herman Van Rompuy chaired all meetings since March 2010 to December 2014; the proposals for formalisation of the summit include electing a President along the same lines as the European Council President, until Van Rompuy continues to chair the summit. On 1 March 2012, he was formally elected as President of the Euro Summit for the term 1 June 2012 to 30 November 2014. New president for the term 1 December 2014 until 31 May 2017, is the former Polish Prime Minister Donald Tusk. Notes Presidents of other EU institutions, such as the President of the European Commission and the European Central Bank President attend.
Presidents of the Euro Group and of the European Parliament may be invited and the President of the Euro Summit shall present a report to the European Parliament after each of the meetings of the Euro Summit. Heads of state or government of non-eurozone signatories to the European Fiscal Compact treaty participate, at least once a year, for those policies of the treaty that apply to them. In some summits, other leaders might attend discussions, for example the British Prime Minister attending the 2008 summit. European Fiscal Compact European sovereign debt crisis Euro Group
There are eight euro coin denominations, ranging from one cent to two euros. The coins first came into use in 2002, they have a common reverse, portraying a map of Europe, but each country in the eurozone has its own design on the obverse, which means that each coin has a variety of different designs in circulation at once. Four European microstates which use the euro as their currency have the right to mint coins with their own designs on the obverse side; the coins, various commemorative coins, are minted at numerous national mints across the European Union to strict national quotas. Obverse designs are chosen nationally, while the reverse and the currency as a whole is managed by the European Central Bank; the euro came into existence on 1 January 1999. It had been a goal of its predecessors since the 1960s; the Maastricht Treaty entered into force in 1993 with the goal of creating economic and monetary union by 1999 for all EU states except the UK and Denmark. In 1999 the currency was born and in 2002 notes and coins began to circulate.
It replaced the former national currencies and the eurozone has since expanded further to some newer EU states. In 2009 the Lisbon Treaty formalised its political authority, the Eurogroup, alongside the European Central Bank. In 2004 €2 commemorative coins were allowed to be minted in six states. By 2007, all states but France and the Netherlands had minted a commemorative issue and the first eurozone-wide commemorative coin was issued to celebrate 50 years of the Treaty of Rome. In 2009, the second eurozone-wide issue of a 2-euro commemorative coin was issued, celebrating ten years of the Economic and Monetary Union. In 2012, the third eurozone-wide issue of a 2-euro commemorative coin was issued, celebrating 10 years of euro coins and notes. To date, only Cyprus has not independently issued a €2 commemorative coin; as the EU's membership has since expanded in 2004, 2007 and 2013, with further expansions envisaged, the common face of all euro coins from the value of 10c and above were redesigned in 2007 to show a new map.
Slovenia joined the eurozone in 2007, Cyprus and Malta joined in 2008, Slovakia in 2009, Estonia in 2011, Latvia in 2014 and Lithuania in 2015, introducing seven more national-side designs. Andorra started minting coins in 2014, so from 2015 there are 23 countries with their own national sides. There are eight different denominations of euro coins: 1c, 2c, 5c, 10c, 20c, 50c, €1 and €2; the 1c, 2c and 5c coins show Europe in relation to Africa in the world. The remaining coins show the EU before its enlargement in May 2004 if minted before 1 January 2007, or a geographical map of Europe if minted after. Coins from Italy, San Marino, the Vatican City and Portugal show the geographical map if minted in 2008 or later; the common side was designed by Luc Luycx of the Royal Belgian Mint. They symbolise the unity of the EU; the national sides were designed by the NCBs of the eurozone in separate competitions. There are specifications. National designs were not allowed to change until the end of 2008, unless a monarch dies or abdicates.
National designs have seen some changes due to a new rule stating that national designs should include the name of the issuing country. The common side of the 1c, 2c and 5c coins depict the denomination, the words'EURO CENT' beside it, twelve stars and Europe highlighted on a globe in relation to Asia and Africa in the world; the common side of the 10c, 20c and 50c coins depict the denomination on the right, the words'EURO CENT' underneath it, with twelve stars and the European continent on the left. Coins minted from 1999 to 2006 depicted only the EU15, rather than the entire European continent, on coins minted after 2007; the common side of the €1 and €2 coins depict the denomination on the left, the currency, map of Europe and twelve stars on the right. Coins minted from 1999 to 2006 depicted the EU15, rather than the whole European continent, on coins minted from 2007. All coins have a common reverse side showing how much the coin is worth, with a design by Belgian designer Luc Luycx; the design of the 1c, 2c and 5c coins shows Europe's place in the world as a whole.
The 10c coins and above show either the 15 countries that were the European Union in 2002, or, if minted after 2007, the whole European continent. Coins from Italy, San Marino, the Vatican and Portugal show the new design if minted 2008 or later; the coins symbolise the unity of the EU. On 7 June 2005, the European Council decided that the common side of the 10c to €2 coins should be brought up to date to reflect the enlargement of the EU in 2004; the 1c, 2c and 5c coins show Europe in relation to the rest of the world, therefore they remained unchanged. In 2007, the new design was introduced; the design still retains all elements of the original designs, including the twelve stars, but the map of the fifteen states is replaced by one showing the whole of Europe as a continent, without borders, to stress unity. These coins were not mandatory for existing eurozone members when introduced in 2007, but became so for every member in 2008. Cyprus is shown several hundred kilometres north west of its real position in order to include it on the map.
On the €1 and €2 coins, the island is shown to be directly east of mainland Greece. The original proposal from the European Commission was to include Turkey on the map, but this design was rejected by the Council; the original designs of the 10c, 20c and 50c coins showed the ou
The euro sign is the currency sign used for the euro, the official currency of the European Union and some non-EU countries. The design was presented to the public by the European Commission on 12 December 1996, it consists of a stylized letter E, crossed by two lines instead of one. The character is encoded in Unicode at U+20AC € EURO SIGN. In English, the sign precedes the value. In some style guides, the euro sign is not spaced; the euro currency sign was designed to be similar in structure to the old sign for the European Currency Unit. There were 32 proposals; these ten were put to a public survey. After the survey had narrowed the original ten proposals down to two, it was up to the European Commission to choose the final design; the other designs that were considered are not available for the public to view, nor is any information regarding the designers available for public query. The European Commission considers the process of designing to have been internal and keeps these records secret.
The eventual winner was a design created by a team of four experts whose identities have not been revealed. It is assumed that the Belgian graphic designer Alain Billiet was the winner and thus the designer of the euro sign. Inspiration for the € symbol itself came from the Greek epsilon – a reference to the cradle of European civilization – and the first letter of the word Europe, crossed by two parallel lines to ‘certify’ the stability of the euro; the official story of the design history of the euro sign is disputed by Arthur Eisenmenger, a former chief graphic designer for the European Economic Community, who claims he had the idea prior to the European Commission. The European Commission specified a euro logo with exact proportions and colours, for use in public-relations material related to the euro introduction. While the Commission intended the logo to be a prescribed glyph shape, type designers made it clear that they intended to design their own variants instead. Generating the euro sign using a computer depends on the operating system and national conventions.
Some mobile phone companies issued an interim software update for their special SMS character set, replacing the less-frequent Japanese yen sign with the euro sign. Mobile phones have both currency signs; the euro is represented in the Unicode character set with the character name EURO SIGN and the code position U+20AC as well as in updated versions of the traditional Latin character set encodings. In HTML, the &euro. An implicit character encoding, along with the fact that the code position of the euro sign is different in common encoding schemes, led to many problems displaying the euro sign in computer applications. While displaying the euro sign is no problem as long as only one system is used, mixed setups produced errors. One example is a content management system where articles are stored in a database using a different character set than the editor's computer. Another is legacy software which could only handle older encodings such as ISO 8859-1 that contained no euro sign at all. In such situations, character set conversions had to be made introducing conversion errors such as a question mark being displayed instead of a euro sign.
Care has been taken to avoid replacing an existing obsolete currency sign with the euro sign. That could create different currency signs for sender and receiver in e-mails or web sites, with confusions about business agreements as a result. Depending on keyboard layout and the operating system, the symbol can be entered as: AltGr+4 AltGr+5 AltGr+E AltGr+U Ctrl+Alt+4 Ctrl+Alt+5 Ctrl+Alt+e in Microsoft Word in United States layout Alt+0128 in Microsoft Windows Ctrl+⇧ Shift+u followed by 20ac in Chrome OS, in other operating systems using IBus. Ctrl+k followed by =e in the Vim text editor On the macOS operating system, a variety of key combinations are used depending on the keyboard layout, for example: ⌥ Option+2 in British layout ⌥ Option+⇧ Shift+2 in United States layout ⌥ Option+⇧ Shift+5 in Slovenian layout ⌥ Option+$ in French layout ⌥ Option+E in German and Italian layout ⇧ Shift+4 in Swedish layoutThe Compose key sequence for the euro sign is =E. Placement of the sign varies. Countries have sustained those of their former currencies.
For example, in Ireland and the Netherlands, where previous currency signs were placed before the figure, the euro sign is universally placed in the same position. In many other countries, including France, Germany, Spain and Lithuania, an amount such as €3.50 is written as 3,50 € instead in accordance with conventions for previous currencies. The European Union did indeed usher a guideline on the use of the euro sign, stating it should be placed in front of the amount without any space in English, but after the amount in most other languages. In English, the euro sign—like the dollar sign and the pound sign —is placed before the figure, unspaced, as used by publications such as the Financial Times and The Economist; when written out, "euro" is placed after the value in lower case. No official recommendation is made with regard to the use of a cent sign, usage differs between and within m
The euro is the official currency of 19 of the 28 member states of the European Union. This group of states is known as the eurozone or euro area, counts about 343 million citizens as of 2019; the euro is the second largest and second most traded currency in the foreign exchange market after the United States dollar. The euro is subdivided into 100 cents; the currency is used by the institutions of the European Union, by four European microstates that are not EU members, as well as unilaterally by Montenegro and Kosovo. Outside Europe, a number of special territories of EU members use the euro as their currency. Additionally, 240 million people worldwide as of 2018 use currencies pegged to the euro; the euro is the second largest reserve currency as well as the second most traded currency in the world after the United States dollar. As of August 2018, with more than €1.2 trillion in circulation, the euro has one of the highest combined values of banknotes and coins in circulation in the world, having surpassed the U.
S. dollar. The name euro was adopted on 16 December 1995 in Madrid; the euro was introduced to world financial markets as an accounting currency on 1 January 1999, replacing the former European Currency Unit at a ratio of 1:1. Physical euro coins and banknotes entered into circulation on 1 January 2002, making it the day-to-day operating currency of its original members, by March 2002 it had replaced the former currencies. While the euro dropped subsequently to US$0.83 within two years, it has traded above the U. S. dollar since the end of 2002, peaking at US$1.60 on 18 July 2008. In late 2009, the euro became immersed in the European sovereign-debt crisis, which led to the creation of the European Financial Stability Facility as well as other reforms aimed at stabilising and strengthening the currency; the euro is managed and administered by the Frankfurt-based European Central Bank and the Eurosystem. As an independent central bank, the ECB has sole authority to set monetary policy; the Eurosystem participates in the printing and distribution of notes and coins in all member states, the operation of the eurozone payment systems.
The 1992 Maastricht Treaty obliges most EU member states to adopt the euro upon meeting certain monetary and budgetary convergence criteria, although not all states have done so. The United Kingdom and Denmark negotiated exemptions, while Sweden turned down the euro in a 2003 referendum, has circumvented the obligation to adopt the euro by not meeting the monetary and budgetary requirements. All nations that have joined the EU since 1993 have pledged to adopt the euro in due course. Since 1 January 2002, the national central banks and the ECB have issued euro banknotes on a joint basis. Euro banknotes do not show. Eurosystem NCBs are required to accept euro banknotes put into circulation by other Eurosystem members and these banknotes are not repatriated; the ECB issues 8% of the total value of banknotes issued by the Eurosystem. In practice, the ECB's banknotes are put into circulation by the NCBs, thereby incurring matching liabilities vis-à-vis the ECB; these liabilities carry interest at the main refinancing rate of the ECB.
The other 92% of euro banknotes are issued by the NCBs in proportion to their respective shares of the ECB capital key, calculated using national share of European Union population and national share of EU GDP weighted. The euro is divided into 100 cents. In Community legislative acts the plural forms of euro and cent are spelled without the s, notwithstanding normal English usage. Otherwise, normal English plurals are sometimes used, with many local variations such as centime in France. All circulating coins have a common side showing the denomination or value, a map in the background. Due to the linguistic plurality in the European Union, the Latin alphabet version of euro is used and Arabic numerals. For the denominations except the 1-, 2- and 5-cent coins, the map only showed the 15 member states which were members when the euro was introduced. Beginning in 2007 or 2008 the old map is being replaced by a map of Europe showing countries outside the Union like Norway, Belarus, Russia or Turkey.
The 1-, 2- and 5-cent coins, keep their old design, showing a geographical map of Europe with the 15 member states of 2002 raised somewhat above the rest of the map. All common sides were designed by Luc Luycx; the coins have a national side showing an image chosen by the country that issued the coin. Euro coins from any member state may be used in any nation that has adopted the euro; the coins are issued in denominations of €2, €1, 50c, 20c, 10c, 5c, 2c, 1c. To avoid the use of the two smallest coins, some cash transactions are rounded to the nearest five cents in the Netherlands and Ireland and in Finland; this practice is discouraged by the Commission, as is the practice of certain shops of refusing to accept high-value euro notes. Commemorative coins with €2 face value have been issued with changes to the design of the national side of the coin; these include both issued coins, such as the €2 commemorative coin for the fiftieth anniversary of the signing of the Treaty of Rome, nationally i
The Deutsche Bundesbank is the central bank of the Federal Republic of Germany and as such part of the European System of Central Banks. Due to its strength and former size, the Bundesbank is the most influential member of the ESCB. Both the Bundesbank and the European Central Bank are located in Germany, it is sometimes referred to as "Buba" for Bundesbank. The Bundesbank was established in 1957 and succeeded the Bank deutscher Länder, which introduced the Deutsche Mark on 20 June 1948; until the euro was physically introduced in 2002, the Bundesbank was the central bank of the former Deutsche Mark. The Bundesbank was the first central bank to be given full independence, leading this form of central bank to be referred to as the Bundesbank model, as opposed, for instance, to the New Zealand model, which has a goal set by the government. Nowadays, the ECB uses the Bundesbank model, making the concept the foundation of the entire Euro system; the Bundesbank was respected for its control of inflation through the second half of the 20th century.
This made the German Mark one of the most respected currencies, the Bundesbank gained substantial indirect influence in many European countries. The history of the Bundesbank is inextricably linked with the history of the German currency after the Second World War. Following the total destruction after the war, the old Reichsmark was worthless, a currency reform was implemented in the western occupation zones including West Berlin: on 21 June 1948, the D-Mark, or Deutsche Mark, replaced the Reichsmark; the currency reform was based on laws enacted by the Allied military government. In preparation, the Western Powers established a new two-tier central bank system in the occupied zones, it comprised the central banks of the states of the West German occupation zones and the Bank deutscher Länder in Frankfurt am Main, created on 1 March 1948. The central banks of the Länder acted as central banks within their areas of jurisdiction; the Bank deutscher Länder, whose share capital was held by the central banks of the Länder, was responsible for issuing bank notes, co-ordinating policy and various central tasks including management of foreign exchange.
The supreme governing body of the two-tier central bank system was the Central Bank Council set up at the Bank deutscher Länder. It consisted of a president, the presidents of the central banks of the Länder and the president of the directorate of the Bank deutscher Länder. Amongst other things, the Central Bank Council determined policy on bank rate and minimum reserve policy, open-market policy guidelines and granting of credit. After the negative experience with a central bank subject to government orders, the principle of an independent central bank was established; the Bank deutscher Länder was independent of German political bodies from the start, including the federal German government, active from September 1949. It achieved independence from the Allies in 1951; the German "Basic Law", which had come into force on 23 May 1949, placed an obligation on the German federal legislature to establish a federal bank responsible for the issue of bank notes and currency. The legislature fulfilled this obligation by passing the Bundesbank Act of 26 July 1957, which abolished the two-tier structure of the central bank system.
The central banks of the Länder were now no longer independent note-issuing banks, but became regional headquarters of the Bundesbank retaining the title "state central bank". The Central Bank Council remained the supreme decision-making body of the Bundesbank, it was now made up of the presidents of the central banks of the Länder and a board of directors based in Frankfurt. The Central Bank Council decided on the currency and credit policy and laid down rules for management; as the central executive body of the Bundesbank, the Directorate was responsible for implementing the decisions of the Central Bank Council. The Directorate ran the bank and was, in particular, responsible for dealings with the federal government and its "special assets", for transactions with credit institutes operating in the Federal republic of Germany, for currency transactions, foreign commercial transactions, for open-market dealings; the Directorate was made up of the president and the vice-president of the Bundesbank and up to six additional members.
The central banks of the Länder carried out business falling in their areas independently. The Bundesbank Act explicitly made them responsible for dealings with public bodies and credit institutes; the central Banks of the Länder controlled the subsidiary bodies, now called branches. Overall management of each Land central bank was in the hands of its executive board, which as a rule consisted of the president and the vice-president of the bank. In the wake of the Fall of the Berlin Wall, the Federal Republic of Germany and the German Democratic Republic signed a treaty on 18 May 1990, that created an economic and currency union between the two German nations; the Bundesbank was made responsible for money and currency policy within the whole of the currency union. A "Provisional Administration Body" was set up for the purpose of implementing the treaty, this body continued to operate beyond the official date of reunification until 31 October 1990. T
Banknotes of the euro, the currency of the euro area and institutions, have been in circulation since the first series was issued in 2002. They are issued by the national central banks of the European Central Bank. In 1999 the euro was introduced and in 2002 notes and coins began to circulate; the euro took over from the former national currencies and expanded around the European Union. Denominations of the notes range from €5 to €500 and, unlike euro coins, the design is identical across the whole of the Eurozone, although they are issued and printed in various member states; the euro banknotes are pure cotton fibre, which improves their durability as well as giving the banknotes a distinctive feel. They measure from 120 by 62 millimetres to 160 by 82 millimetres and have a variety of colour schemes; the euro notes contain many complex security features such as watermarks, invisible ink and microprinting that document their authenticity. While euro coins have a national side indicating the country of issue, euro notes lack this.
Instead, this information is shown by the first character of each note's serial number. According to European Central Bank estimates, in August 2018, there were about 21.737 billion banknotes in circulation around the Eurozone, with a total value of about €1.193 trillion. On 8 November 2012, the European Central Bank announced that the first series of notes would be replaced by the Europa series, starting with the 5 euro note on 2 May 2013. Estimates suggest that the average life of a euro banknote is about three years before it is replaced due to wear, but individual lifespans vary depending on denomination, from less than a year for €5 banknote to over 30 years for €500 banknote. High denomination banknotes last longer; the Europa series is designed to last longer than the previous one. The euro came into existence on 1 January 1999; the euro's creation had been a goal of its predecessors since the 1960s. The Maastricht Treaty entered into force in 1993 with the goal of creating economic and monetary union by 1999 for all EU states except the UK and Denmark.
In 1999, the currency was born and in 2002 notes and coins began to circulate. It took over from the former national currencies and expanded around the rest of the EU. In 2009, the Lisbon Treaty formalised the Euro's political authority, the Euro Group, alongside the European Central Bank. Slovenia joined the Eurozone in 2007, Cyprus and Malta in 2008, Slovakia in 2009, Estonia in 2011, Latvia in 2014 and Lithuania in 2015. There are seven different denominations of the euro banknotes: €5, €10, €20, €50, €100, €200 and €500; each has a distinctive size. The designs for each of them have a common theme of European architecture in various artistic eras; the obverse of the banknote features windows or gateways while the reverse bears different types of bridges. The architectural examples are stylised not representations of existing monuments. All the notes of the initial series of euro notes bear the European flag, a map of the continent on the reverse, the name "euro" in both Latin and Greek script and the signature of a president of the ECB, depending on when the banknote was printed.
The 12 stars from the flag are incorporated into every note. The notes carry the acronyms of the name of the European Central Bank in five linguistic variants, covering all official languages of the EU in 2002, now 19 out of 24 official languages of the EU28, in the following order: BCE ECB EZB ΕΚΤ EKP The order is determined by the EU country listing order, with BCE ahead of ECB because of the national precedence of Belgium's two main languages, followed by the remaining languages of Germany and Finland, in that order; the euro banknote initial designs were chosen from 44 proposals in a design competition, launched by the Council of the European Monetary Institute on 12 February 1996. The winning entry, created by Robert Kalina from the Oesterreichische Nationalbank, was selected on 3 December 1996; the euro banknotes are pure cotton fibre, which improves their durability as well as giving the banknotes a distinctive feel. In the first and Europa series, the Azores, French Guiana, Madeira, Martinique, Réunion, the Canary Islands, overseas territories of the eurozone member states, which use the euro, are shown under the map in separate boxes.
Cyprus and Malta were not shown on the first series because they were not in the EU in 2002, when the banknotes were issued though they joined the Eurozone in 2008. The map did not stretch as far east as Cyprus, while Malta was too small to be depicted.2. However, both Cyprus and Malta are depicted on the Europa series note; the Europa series banknotes to the first series, bear the European flag, a map of the continent on the reverse and the signature of Mario Draghi, since 1 November 2011 president of the ECB. The 12 stars from the flag are incorporated into the notes. On 4 May 2016 the European Central Bank decided not to issue a 500 euro banknote for the Europa series; the banknote has the name "euro", but in three scripts: Lat
The Deutsche Mark, abbreviated "DM" or "D-Mark", was the official currency of West Germany from 1948 until 1990 and the unified Germany from 1990 until 2002. It was first issued under Allied occupation in 1948 to replace the Reichsmark, served as the Federal Republic of Germany's official currency from its founding the following year until the adoption of the euro. In English it is called the "Deutschmark"; the Germans called it D-Mark when referring to the currency, Mark when talking about individual sums. In 1999, the Deutsche Mark was replaced by the Euro; the Deutsche Mark ceased to be legal tender upon the introduction of the euro — in contrast to the other eurozone nations, where the euro and legacy currency circulated side by side for up to two months. Mark coins and banknotes continued to be accepted as valid forms of payment in Germany until 28 February 2002; the Deutsche Bundesbank has guaranteed that all German marks in cash form may be changed into euros indefinitely, one may do so in person at any branch of the Bundesbank in Germany.
Banknotes and coins can be sent to the Bundesbank by mail. In 2012, it was estimated that as many as 13.2 billion marks were in circulation, with one poll showing a narrow majority of Germans favouring the currency's restoration. On 31 December 1998, the Council of the European Union fixed the irrevocable exchange rate, effective 1 January 1999, for German mark to euros as DM 1.95583 = €1. One Deutsche Mark was divided into 100 Pfennige. A mark had been the currency of Germany since its original unification in 1871. Before that time, the different German states issued a variety of different currencies, though most were linked to the Vereinsthaler, a silver coin containing 16 2⁄3 grams of pure silver. Although the mark was based on gold rather than silver, a fixed exchange rate between the Vereinsthaler and the mark of 3 marks = 1 Vereinsthaler was used for the conversion; the first mark, known as the Goldmark, was introduced in 1873. With the outbreak of World War I, the mark was taken off the gold standard.
The currency thus became known as the Papiermark as high inflation hyperinflation occurred and the currency became made up of paper money. The Papiermark was replaced by the Rentenmark from November 15, 1923, the Reichsmark in 1924. During the first two years of occupation the occupying powers of France, United Kingdom, United States, the Soviet Union were not able to negotiate a possible currency reform in Germany. Due to the strains between the Allies each zone was governed independently as regards monetary matters; the US occupation policy was governed by the directive JCS 1067, which forbade the US military governor "to take any steps to strengthen German financial structure". As a consequence a separate monetary reform in the U. S. zone was not possible. Each of the Allies printed its own occupation currency; the Deutsche Mark was introduced on Sunday, June 20, 1948 by Ludwig Erhard. The old Reichsmark and Rentenmark were exchanged for the new currency at a rate of DM 1 = RM 1 for the essential currency such as wages, payment of rents etc. and DM 1 = RM 10 for the remainder in private non-bank credit balances, with half frozen.
Large amounts were exchanged for RM 10 to 65 Pfennig. In addition, each person received a per capita allowance of DM 60 in two parts, the first being DM 40 and the second DM 20. A few weeks Erhard, acting against orders, issued an edict abolishing many economic controls, implemented by the Nazis, which the Allies had not removed, he did this, as he confessed, on Sunday because the offices of the American and French occupation authorities were closed that day. He was sure; the introduction of the new currency was intended to protect western Germany from a second wave of hyperinflation and to stop the rampant barter and black market trade. Although the new currency was only distributed in the three western occupation zones outside Berlin, the move angered the Soviet authorities, who regarded it as a threat; the Soviets promptly cut off all road and canal links between the three western zones and West Berlin, starting the Berlin Blockade. In response, the U. S. and Britain launched an airlift of food and coal and distributed the new currency in West Berlin as well.
Since the 1930s, prices and wages had been controlled. That meant that people had accumulated large paper assets, that official prices and wages did not reflect reality, as the black market dominated the economy and more than half of all transactions were taking place unofficially; the reform replaced the old money with the new Deutsche Mark at the rate of one new per ten old. This wiped out 90% of government and private debt, as well as private savings. Prices were decontrolled, labor unions agreed to accept a 15% wage increase, despite the 25% rise in prices; the result was the prices of German export products held steady, while profits and earnings from exports soared and were poured back into the economy. The currency reforms were simultaneous with the $1.4 billion in Marshall Plan money coming in from the United States, used for investment. In addition, the Marshall plan forced German companies, as well as those in all of Western Europe, to moder