European Currency Unit - ECU

DEFINITION of 'European Currency Unit - ECU'

The European Currency Unit (ECU) was the precursor to the Euro, the shared single currency of the European Union's member countries. While the Euro is the actual currency of the European Union, the ECU was artificial currency developed by the initial EU member states for their internal accounting purposes.

BREAKING DOWN 'European Currency Unit - ECU'

The ECU was first adopted in 1979 by the European Economic Community, the predecessor of the European Union. In 1999, the ECU was replaced by the Euro, at parity.

RELATED TERMS
  1. European Monetary System - EMS

    A 1979 arrangement between several European countries which links ...
  2. Currency Union

    When two or more groups (usually countries) share a common currency ...
  3. EUR

    The currency code used in the general industry to represent the ...
  4. European Central Bank - ECB

    The central bank responsible for the monetary system of the European ...
  5. European Economic and Monetary ...

    The successor to the European Monetary System (EMS), the combination ...
  6. European Union - EU

    A group of European countries that participates in the world ...
Related Articles
  1. Trading

    The Euro: What Every Forex Trader Needs To Know

    Find out the reports and events that determine the euro's worth, and how we can predict movements in its valuation.
  2. Trading

    Buying Euros as a Long-Term Investment: Risks and Rewards

    Learn about the potential risks and rewards of long term investing in the euro and the current status of the European Union's financial markets.
  3. Markets

    What is the European Union?

    The European Union is a group of European countries that participate as one unit in the global economy, and who mostly operate under one currency.
  4. Markets

    Why the Euro Failed to Become the World's Reserve Currency

    Examine the current state of the U.S. dollar as the world's reserve currency; learn the major reasons why the euro has failed to replace it in that capacity.
  5. Markets

    How the Brexit Could Affect U.S. Investors

    Learn what Brexit is, who supports and opposes it, and when the referendum is to be held. Discover the possible consequences it may have on U.S. investors.
  6. Markets

    What Are The Advantages Of Not Adopting The Euro?

    European Union countries that do not use the euro have a few advantages over eurozone countries. Investopedia explores how.
  7. Markets

    The Top 5 Most Unionized Industries

    Unions don't have the membership numbers that they once did, but they are still a vital part of several different important industries.
  8. Trading

    How Would The Euro Trade If If A Grexit Occurs?

    In the event of a Grexit, the euro could head towards parity with the USD.
  9. Trading

    A Primer On Currency Regimes

    Currency regimes are dynamic and complex, reflecting the ever-changing landscape of their respective nations' monetary and fiscal policies.
  10. Trading

    Will The US Dollar Surpass The Euro?

    The euro is weakening as the European Union turns to quantitative easing to help its economic woes. Meanwhile, the U.S. dollar is strengthening.
RELATED FAQS
  1. When and why did the euro make its debut as a currency?

    On January 1, 1999, the European Union introduced its new currency, the euro. Originally, the euro was an overarching currency ... Read Answer >>
  2. Are eurodollars related to the currency called the euro?

    Eurodollars have little to do with the official currency of the European Union, the euro (EUR). In 1999, the euro was implemented ... Read Answer >>
  3. Why doesn't England use the euro?

    Understand why the United Kingdom has opted to not join the eurozone in adopting the euro over the pound sterling as its ... Read Answer >>
  4. What is the difference between a state and a federally chartered credit union?

    Learn how federal chartered credit unions are regulated by the NCUA, while state chartered unions are regulated by their ... Read Answer >>
  5. Does the FDIC cover credit unions?

    Learn whether or not the FDIC insures your funds at a credit union, and what types of insurance are available at the different ... Read Answer >>
  6. Why is the U.S. dollar shown on the top of some currency pairs and on the bottom ...

    All currencies are traded in pairs. The first currency in the pair is called the base currency while the second is called ... Read Answer >>
Hot Definitions
  1. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  2. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  3. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  4. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  5. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  6. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
Trading Center