If Spain and Germany still had the peseta and the D mark as their respective currencies, the differences in trade balances would cause the mark to appreciate and the peseta to decline.

The weaker peseta would stimulate demand for Spanish exports and reduce Spain s imports, which would boost domestic demand and reduce unemployment.

When a group of individual currencies is replaced by a single currency, as the Deutsche mark, French franc, Italian lira, Spanish peseta, and others were by the euro, there are two primary benefits lower transaction costs and greater transparency.