At midnight, eleven member states of the European Union fixed their exchange rates irrevocably and adopted the euro for electronic transactions, banking, and stock exchanges, though physical notes and coins would not appear for another three years. The move represented the most significant step yet toward European economic integration since the founding of the EU's predecessor bodies in the 1950s.
For decades, European federalists had dreamed of a shared currency that would bind the continent's economies so tightly together that war between member states would become unthinkable. The Maastricht Treaty of 1992 laid the legal groundwork, but it took another seven years of painstaking negotiation over convergence criteria—inflation rates, debt levels, deficit limits—before eleven nations were deemed ready.
At the stroke of midnight on January 1, 1999, the German mark, French franc, Italian lira, and eight other currencies became, in effect, mere denominations of a single new unit. Trading floors in Frankfurt and elsewhere opened that Monday to a currency that existed only in ledgers and computer systems, a strange interim period Europeans called the 'euro era without euros.'
Physical banknotes and coins didn't enter circulation until January 1, 2002, when citizens across the eurozone lined up at cash machines to withdraw crisp new bills featuring generic bridges and windows designed to avoid favoring any single nation's history. Greece joined in 2001, and the eurozone has since expanded to twenty countries, though the currency's early tests came hard during the 2010s debt crisis that nearly tore Greece from the union.