The dollar has enjoyed the key currency status for about half a century. With the current situation against the greenback, will euro be the most-sought-after currency?

Judging from the comments by international economists, one would think that the dollar was on its deathbed. America's financial crisis and the dollar's depreciation are bringing us to a tipping point where the greenback will lose its international currency mantle to the euro. A few more losses on dollar investments, it is said, and central banks will learn to hold their reserves in euros. Other investors will follow. America's `exorbitant privilege' will be no more.

Europe's Unified currency—the euro—came into being on January 1, 1999. This financial unification project involved massive campaign and cumbersome extended logistics. It was mainly used by banks and the financial markets in the beginning. For three years after its launch, i.e., until January 1, 2002, it did not become a real currency. It covered the currency across 12 countries and 300 million people. Lately, Cyprus and Malta, the North East European Countries, have adopted euro as their currencies. Denmark, Sweden and the UK are the only countries in the EU that have not adopted the euro.

The euro was introduced after many years of debate. It was with the Maastricht Treaty of 1991 that European Union (EU) leaders firmly agreed to introduce a single currency by the year 2000. During the negotiations on the Maastricht Treaty, the UK Government made the alternative proposal of a `parallel ECU', to exist alongside national currencies, and eventually replace them. As a result of market forces, the UK declared that it opted out; this was to see whether the project worked before trying to join. In January 1999, the euro was launched as an electronic currency used by banks, foreign exchange dealers, big firms and stock markets in 11 countries - Belgium, Germany, Spain, Italy, Ireland, Luxembourg, the Netherlands, Austria, Portugal, France and Finland. The exchange rates of the countries opting for euro were set and a common monetary policy was implemented. By 2002, euro coins and notes became officially authorized tender in 12 countries, with Greece also joining the EU.

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