The euro's roots date to 1957, when the Treaty of Rome laid the groundwork for the Common Market, the economic integration of Western Europe from Spain to Scandinavia and Ireland to the Iron Curtain. One key part of this union, said the treaty, would be a common currency. Until 1991, this was one of those things that was a good idea but probably wouldn't happen, given the cultural, religious, and historical differences among European countries.

After all, Europe had fought two major wars in the 20th century, and the 20th century wasn't all that different from any of the others going back to the collapse of the Roman Empire some 1,500 years earlier. How could countries that regularly tried to destroy each other use the same money?

"But if you look at the period between 1875 and 1914, they were using the same money," says Joel Mokyr, an economic historian at Northwestern University in Evanston, Illinois. "Europe was on the gold standard, which meant you could take a bag of gold coins from one country and use it in another country without much trouble."

Which meant that the countries that signed the Maastricht treaty in 1991, committing themselves to a common currency by 1999, had precedent to build on. They also had increasingly similar economies, based on market capitalism; almost four decades of working together in the Common Market; and a common political vision that probably hadn't existed since Napoleon imposed his on Europe at the beginning of the 19th century. Says Mokyr: "This didn't happen overnight. It took them 40 years to get their act together."

Reducing costs