Euro Conversion
The Euro Conversion rates were irrevocably adopted by the EU Council on December 31, 1998, following Article 109l (4) of the Treaty establishing the European Community. This decision, based on a proposal from the European Commission and after consulting the European Central Bank (ECB), took effect at 0.00 on January 1, 1999 (local time). The legal framework mandates that this single, irrevocable conversion rate for each participating currency be used for all conversions between the euro and national currencies, as well as between different national currency units.
The established euro conversion rates are detailed below:
| Currency | Units of national currency for € 1 |
|---|---|
| Belgian franc | 40.3399 |
| Deutsche Mark | 1.95583 |
| Spanish peseta | 166.386 |
| French franc | 6.55957 |
| Irish pound | 0.787564 |
| Italian lira | 1936.27 |
| Luxembourg franc | 40.3399 |
| Dutch guilder | 2.20371 |
| Austrian schilling | 13.7603 |
| Portuguese escudo | 200.482 |
| Finnish markka | 5.94573 |
These rates were determined using a process outlined in a Joint Communiqué issued on May 2, 1998, by key stakeholders including ministers of participating Member States, national central bank governors, the European Commission, and the European Monetary Institute.
The euro conversion rate determination process involved several coordinated steps. First, a teleconference among EU national central banks was held at 11:00 a.m. (CET) to calculate national currency exchange rates based on market observations, ensuring alignment with pre-announced ERM bilateral central rates. Following this, the Commission calculated the final official ECU exchange rates, which would become the euro rates, using the recorded rates from national central banks. These calculated rates were then sent to the ECB for verification.
The Governing Council of the ECB, along with Governors from four non-euro area national central banks, convened shortly after noon to formally adopt an opinion on the proposed Council Regulation concerning the euro conversion rates. Subsequently, the European Commission formally proposed the irrevocable euro conversion rates to the EU Council at 12:30 p.m. (CET) for adoption, simultaneously publicizing the proposed rates via the internet and financial information providers. The EU council adopted the regulation, taking the ECB’s opinion into account.
Following the adoption of the regulation, a series of actions ensured the widespread dissemination and official implementation of the new euro conversion rates. The ECB confirmed the rates via a SWIFT broadcast to all institutions with a SWIFT address at 2:00 p.m. Both the Regulation and the ECB’s Opinion were published in the Official Journal of the European Communities and made available in eleven official EU languages at 3:00 p.m. Finally, the Regulation officially came into effect at 0:00 (local time) on January 1, 1999, marking a significant milestone in European economic integration. The meticulous and transparent process underscored the importance of a stable and reliable framework for the introduction of the euro. The precise determination of these conversion rates was crucial for the smooth transition to the new currency and for ensuring economic stability across the participating Member States.