2.1 French Revolution

The franc was re-established as the national currency by the French Revolutionary Convention in 1795 as a decimal unit of 4.5 g of fine silver (theoretically slightly less than the livre of 4.505 g, though the new coin was set in 1796 at 1.0125 livres, reflecting in part the past minting of sub-standard coin).

With the creation of a gold franc in 1803, gold and silver-based units circulated interchangeably on the basis of a 1:15.1 ratio between the values of the two metals ( bimetallism).

2.2 World War I

World War I severely undermined the French franc's strength, as war expenditure, inflation and postwar reconstruction financed partly through the printing of ever more money reduced the franc's purchasing power by 70 per cent from 1915 to 1920 and a further 43 per cent from 1922 to 1926. After a brief return to the gold standard ( 1928 to 1936) the currency was allowed to resume its slide, until it was worth in 1959 less than a fortieth of its 1936 value.

2.3 The new franc

In January 1960 the French franc was revalued at 100 existing francs. Old franc pieces continued to circulate as centimes (none of which were minted for the first two years), 100 of them making a nouveau franc (the abbreviation NF was used for some time). Inflation continued to erode the currency's value but at a greatly reduced rate comparable to other countries, so when the euro replaced the franc in January 1, 1999, the new franc was worth less than an eighth of its original value.

Many French people continued using old francs, anciens francs as a unit; large sums such as lottery prizes were often given in centimes, since these are equivalent to the old franc. This usage continued right up to when franc notes and coins were withdrawn in 2002, with speculation as to whether older people would carry the factor of 100 conversion through to the euro, the scaled-down version being called, naturally, the euro ancien.

From January 1, 1999, the value exchange rate of the French franc against the euro was set at a fix parity of 1 EUR=6.55957 FRF. Euro coins and notes replaced it entirely between January 1 and February 17, 2002.

3 CFA and CFP francs

Fourteen African countries use the franc CFA (in west Africa, Communauté financière africaine; in equatorial Africa, Coopération financière en Afrique centrale), originally ( 1945) worth 1.7 French francs and then from 1948, 2 francs (from 1960: 0.02 new franc) but after January 1994 worth only 0.01 French franc. Therefore, from January 1999, 1 CFA franc is equivalent to 0.00152449 euro.

A separate ( franc CFP) circulates in France's Pacific territories, worth 0.0084 euro (formerly 0.055 French franc).

4 Belgian and Luxembourg francs

The conquest of most of western Europe by Revolutionary and Napoleonic France led to the franc's wide circulation. Following independence from the Kingdom of the Netherlands, the new Kingdom of Belgium in 1832 adopted its own franc, equivalent to the French one, followed by Luxembourg in 1848 and Switzerland in 1850. Newly-unified Italy adopted the lira on a similar basis in 1862.

In 1865 France, Belgium, Switzerland and Italy created the Latin Monetary Union (to be joined by Greece in 1868): each would possess a national currency unit (franc, lira, drachma) worth 4.5 g of silver or 0.290 322 g of gold (fine), all freely exchangeable at a rate of 1:1. In the 1870s the gold value was made the fixed standard, a situation which was to continue until 1914.

In 1926 Belgium as well as France experienced depreciation and an abrupt collapse of confidence, leading to the introduction of a new gold currency for international transactions, the belga of 5 francs, and the country's withdrawal from the monetary union, which ceased to exist at the end of the year. The 1921 monetary union of Belgium and Luxembourg survived, however, forming the basis for full economic union in 1932.

Like the French franc, the Belgian/Luxemburgese franc ceased to exist in January 1, 1999, when it became fixed at 1 EUR= 40.3399 BEF/LUF, thus a franc was worth 0.024789 €. Old franc coins and notes lost its legal tender status in February 28, 2002.

1 Luxembourg franc was equal to 1 Belgian franc. Belgian francs were legal tender inside Luxembourg and Luxembourg francs were legal tender in Belgium.

5 Swiss franc

The Swiss franc ( ISO code: CHF or 756), which appreciated significantly against the new European currency from April to September 2000, remains one of the world's strongest currencies, worth today around two-thirds of a euro. The Swiss franc is used in Switzerland and in Liechtenstein.

The name of the country "Swiss Confederation" is found on some of the coins in Latin (Confoederatio Helvetica), to preserve neutrality among linguistic communities.

6 Congolese franc

Used in the Democratic Republic of Congo. Suppressed in 1967 by Mobutu, re-established in 1998 by Laurent Kabila.

7 Burundi franc

Used in Burundi.

8 Rwandan franc

Used in Rwanda.

9 Djiboutian franc

Used in Djibouti. Pegged to the US dollar since 1973.

10 Guinean franc

Used in Guinea. Suppressed in 1972 by dictator Sékou Touré, re-established in 1986 by his successor Lansana Conté.

11 Malagasy franc

Used in Madagascar. The Malagasy franc is scheduled to disappear by the end of 2004, replaced by the more national sounding Ariary . This controversial decision was taken by the new president of Madagascar Marc Ravalomanana.

12 See also

• CFP franc
• Special settlement currencies
  • UIC franc
  • gold franc
• Livre tournois (French pound)
• Roman currency

Currencies

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