European Currency Unit
The European Currency Unit (ECU) was a basket of the currencies of the European Community member states, used as the unit of account of the European Community. The European Monetary System attempted to minimize fluctuations between member state currencies and the ECU. The ECU was also used in some international financial transactions.
On January 1 1999, the Euro replaced the ECU, at the value 1 euro = 1 ECU. Unlike the ECU, the Euro is a real currency, although not all member states participate (12 member states participate, 3 member states do not -- United Kingdom, Denmark and Sweden), whereas all member states participated in the ECU.
Due to the ECU being used in some international financial transactions, there was a concern that foreign courts might not recognize the Euro as the legal successor to the ECU. This was unlikely to be a problem, since it is a generally accepted principle of private international law that states determine their currencies, and that therefore states would accept the European Union legislation to that effect. However, for abundant caution, several foreign jurisdictions adopted legislation to ensure a smooth transition. Of particular importance here were the U.S. states of Illinois and New York, under whose laws a large proportion of international financial contracts are made. Both these states passed legislation to ensure that the Euro was recognized as successor to the ECU.
The ECU had the ISO 4217 currency code XEU. The Euro, which replaced it, has the code EUR.