ECU (currency)

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For the film festival, see: ÉCU The European Independent Film festival. For other uses, see: ECU (disambiguation).

Overview[]

The Écu is a former French currency and the ECU is a former EU currency.

French Écu[]

The first écu, issued by Louis IX of France, in 1266.

The term écu (French pronunciation: [eky]) or crown may refer to one of several French coins. The first écu was a gold coin (the écu d'or) minted during the reign of Louis IX of France, in 1266. Écu (from Latin scutum) means shield, and the coin was so called because its design included the coat of arms of France. The word is related to scudo and escudo. The value of the écu varied considerably over time, and silver coins (known as écu d'argent) were also introduced.

EU ECU[]

The European Currency Unit (₠ or ECU) 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 on 1 January 1999, at parity. The ECU itself replaced the European Unit of Account, also at parity, on 13 March 1979. 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, where its advantage was that securities denominated in ECUs provided investors with the opportunity for foreign diversification without reliance on the currency of a single country.

The ECU was conceived on 13 March 1979 as an internal accounting unit. It had the ISO 4217 currency code XEU.

Euro replaces ECU []

On 1 January 1999, the euro (with the code EUR and symbol €) replaced the ECU, at the value €1 = 1 ECU. 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, did not join the eurozone, and a third, Greece, joined late. 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 had joined the EU in 1995, 2 years after the ECU composition was "frozen")

Legal implications []

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 is 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, the U.S. states of Illinois and New York adopted legislation to ensure a large proportion of international financial contracts recognized the euro as the successor of the ECU.

Also see[]

France
Economic terminology
2019 European Parliament elections