The European Unit of Account (EUA) was a
unit of account
In economics, unit of account is one of the money functions. A unit of account is a standard numerical monetary unit of measurement of the market value of goods, services, and other transactions. Also known as a "measure" or "standard" of rela ...
most notably used in the
European Communities from 1975 to 1979, when it was replaced at parity by the
European Currency Unit
The European Currency Unit (, ; , ECU, or XEU) was a unit of account used by the European Economic Community and composed of a basket of member country currencies. The ECU came in to operation on 13 March 1979 and was assigned the ISO 42 ...
, in turn replaced at parity in 1999 by the
euro
The euro ( symbol: €; code: EUR) is the official currency of 19 out of the member states of the European Union (EU). This group of states is known as the eurozone or, officially, the euro area, and includes about 340 million citizens . ...
.
The EUA was introduced as the internal unit of account for the
European Payments Union
The European Payments Union (EPU) was an organization in existence from July 1950 to December 1958, when it was replaced by the European Monetary Agreement.
With the end of World War II, economic depression struck Europe. Of all the non-neutral ...
when that organisation was formed in 1950. The EUA was defined as 0.888671 grams of gold, or one US dollar. The unit was first used outside the EPU in 1961, when Kredietbank Luxembourgeoise issued a bond denominated in EUA. After the
collapse of the Bretton Woods system, the EUA was redefined as a basket of European currencies.
The EUA was used for
Lomé Convention
The Lomé Convention is a trade and aid agreement between the European Economic Community (EEC) and 71 African, Caribbean, and Pacific (ACP) countries, first signed in February 1975 in Lomé, Togo.
History
The first Lomé Convention (Lomé I) ...
and
European Investment Bank operations before being gradually introduced into other sectors of Community activity.
The EUA basket was designed to have the same value in mid-1974 as the IMF
special drawing rights
Special drawing rights (SDRs, code ) are supplementary foreign exchange reserve assets defined and maintained by the International Monetary Fund (IMF). SDRs are units of account for the IMF, and not a currency ''per se''. They represent a claim ...
basket, both worth US$1.20635; they immediately moved apart in value. Different units of account had previously been used for different purposes, including the budget, the
European Coal and Steel Community, and the
Common Agriculture PolicyThe Units of Account as a Factor of Integration
CEC 87/75 following the abandonment of the gold parity unit of account in the early 1970s in the wake of the collapse of the Bretton Woods system.[European Union Public Finance]
European Commission, , published 2008, accessed 2019-05-28
Bond market baskets of currencies
Various European currency basket
A currency basket is a portfolio of selected currencies with different weightings. A currency basket is commonly used by investors to minimize the risk of currency fluctuations and also governments when setting the market value of a country’s ...
s were used as units of account in international bond market
The bond market (also debt market or credit market) is a financial market where participants can issue new debt, known as the primary market, or buy and sell debt securities, known as the secondary market. This is usually in the form of bonds, bu ...
s. Some of these were defined in ISO 4217.
References
{{Euro topics
Currencies of Europe