If we look back long enough, there are plenty of examples of currency unions which have broken apart.
Upon closer inspection, there are a number of important differences between the situation the eurozone is facing now and the situations other currency unions on the verge of break-up faced in the past.
Note: Size of bubbles reflects GDP (in current US Dollars) as a share (%) of world GDP at the time of break-up. Moreover, there are going to be significant differences between a break-up of the eurozone and past currency union break-ups in relation to capital mobility. Finally, we want to stress that the Euro’s role as an important international currency raises new issues associated with a break-up that have not been in play in earlier periods of currency union break-up.
Before the euro came into existence, the European Currency Unit (ECU) was the unit of account in the European Union.
But one must be cautious when analyzing the experience around past currency union break-ups.
Step 1Select the currency that you want to convert from and the currency that you want to convert to.
However, inference based on previous currency union dissolutions must be made with great caution. The main problem with applying historical studies to the analysis of a eurozone break-up is that past currency union break-ups typically involve countries which had a smaller impact on global markets and economies than would the eurozone today. The eurozone nations account for roughly 20 per cent of global GDP, with GIIPS countries (Greece, Ireland, Italy, Portugal and Spain) alone accounting for 6.7 per cent of global output.


GDP per capita at the time of break-up is measured in 2005 Dollars, and we have included a full-blown eurozone break-up, a limited break-up involving only GIIPS countries, and a unilateral Greek exit in 2012 for illustrative purposes.
There is also the broader issue of the unprecedented level of indebtedness in developed market countries, including the eurozone countries.
There are a number of reasons why a break-up of the eurozone entails entirely different and more complex issues than post currency union break-ups, and could create much more severe damage to the economies of member states, if not managed efficiently and thoughtfully. This currency union break-up list contains 67 countries that experienced an exit from a currency union (1918- present), based on a list constructed by Andrew K. The value of different currencies is affected by the strength of the countries' economies as measured by various factors, including inflation, confidence in the government and interest rates in the country. According to AOL Travel, avoid exchanging money at airports and hotels because they charge higher exchange rates, meaning they give you less of the local currency for your dollars.
For some credit cards the rate for currency exchanges is low enough that is it more convenient and less expensive to use the card than to carry large sums of converted currency.
In the chart below, we compare the size of the eurozone economy to the economic size of past currency unions that faced break-ups, as a percentage of world GDP at the time of break-up. Eurozone and Soviet Union GDP per capita are calculated as an average of values for the individual countries making up the currency unions.
The real GDP per capita in the eurozone is about 5 times as high as the average observed in previous examples of currency union break-ups.
A full-blown break-up of the eurozone would again necessitate a re-denomination process, and a new ECU would facilitate a more orderly re-denomination process for a myriad of contracts and obligations currently in EUR.


For example, if one country is suffering from high inflation or has an unstable government, the value of its currency is likely to decrease.
When you are converting your money to a currency that is stronger, you will lose some purchasing power in that country. Figure 1 clearly illustrates that the eurozone stands out both in terms of GDP (size of the bubble) and real GDP per capita (y-axis magnitude), accounting for an unprecedentedly large share of the global economy compared to previously disassembled currency unions. Conversely, the Soviet Union (which is the second largest out of G7 currency union break-ups we have studied) was not very integrated in the global financial system at the time of its currency union break-up. In addition to the countries in his list, we also consider the Austro-Hungarian break-up of 1918 and the Rouble-zone break-up of 1992.
A newspaper financial section or online resource will have recent conversion rates and currencies for specific countries. Eurozone aggregate figures include all 17 countries currently using the Euro as their currency.



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