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Although it slumped in late 2001 to early 2002 – leading to emergency action from the EU – the euro quickly rose in significance and value.
Through the 2000s the euro gained value against USD and GBP. It peaked against GBP (British sterling) in December 2008 at 97.73p.
Though it suffered along with the rest of the world during the financial crisis – it went into recession for the second, third and fourth quarters of 2008 and the first quarter of 2009 – the importance of the euro has grown steadily since its introduction.
The euro is now the sole currency of 19 European countries – with all newcomers to the European Union obliged to join it – and is also used by many ‘special territories of the EU’. It is the second most widely held international reserve currency, behind only the United States.
In theory, EU member states are meant to meet strict criteria before they can join the euro. In practice, the criteria are often ignored or loosened. The criteria include a budget deficit of less than 3% of GDP, a debt ratio of less than 60% GDP, and a low inflation rate.