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FINANCE AND INTERNATIONAL BUSINESS STUDENTS AND THEIR KNOWLEDGE OF THE EURO
Ralph A. Pope
The Journal of Finance Issues
The implementation of the Euro in 1999-a currency that rivals the dollar and the world's second most important reserve currency-has had a major impact on the international currency market. From its initial price on January 1, 1999, of one Euro = $1.17, the Euro lost value rapidly. By October of2000, one Euro was approximately $.82 at its lowest point. Since that time, the Euro strengthened, surpassing the $1.30 mark. At this writing one Euro = $1.23.
The GDP of the 12 countries in the Eurozone (the European Monetary Union) equals that of the United States. In 2007, the first of the ten newest countries in the European Union (which now consists of25 nations) should start using the Euro. Other attempts have been made by several countries adopting a single currency. All have failed without the structure of a fully integrated political union (as Germany in the 1800s and the United States). If the Euro is successful, it will be the largest and uniquely successful undertaking of this kind in history.