What type of aircraft was used for BOAC flight 777-A?

BOAC Flight 777-A was a scheduled British Overseas Airways Corporation civilian airline flight from Portela Airport in Lisbon, Portugal to Whitchurch Airport near Bristol, England. On 1 June 1943, the Douglas DC-3 serving the flight was attacked by eight German Junkers Ju 88 fighter planes and crashed into the Bay of Biscay, killing all 17 on board. There were several notable passengers, among them actor Leslie Howard.

BOAC Flight 777

One theory suggests that the Germans attacked the aircraft because they believed that British Prime Minister Winston Churchill was aboard; another suggested that it was targeted because several passengers were British spies, including Howard. During the Second World War, British and German civilian aircraft operated from the same facilities at Portela, and Allied and Axis spies watched the incoming and outgoing traffic. The Lisbon–Whitchurch route frequently carried agents and escaped POWs to Britain.

Aircraft flying the Lisbon–Whitchurch route were left unmolested at the beginning of the war, and both Allied and Axis powers respected the neutrality of Portugal. However, in 1942 the air war had begun to heat up over the Bay of Biscay, north of Spain and off the west coast of France; the Douglas DC-3 lost in this attack had survived attacks by Luftwaffe fighters in November 1942 and April 1943.

When war broke out in Europe, the British Air Ministry prohibited private flying and most domestic air services. Imperial Airways and British Airways Ltd, in the process of being merged and nationalised as BOAC, were evacuated from Croydon Aerodrome and Heston Aerodrome to Whitchurch Airport, outside Bristol. After the fall of Norway, and the entry of the Netherlands, Belgium, France, and Italy into the war, only neutral Sweden, Ireland, and Portugal remained as European destinations for BOAC (the US was just within range of BOAC's Empire flying boats by refuelling in Newfoundland). Over the UK, civil aircraft were restricted to between and and could fly only during daylight to ease identification. The British government also restricted flights to diplomats, military personnel, VIPs, and those with government approval.

For several weeks prior to the German invasion of the Netherlands, Dutch airline KLM, operated a direct, over-water, twice-weekly DC-3 service from Amsterdam to Portugal avoiding French, British, and Spanish airspace to connect with the new Pan American flying boat service from the US to Lisbon. When Germany invaded in May 1940, KLM had several airliners en route outside the Netherlands. Some managed to fly to Britain while others stranded east of Italy continued to link British and Dutch territories from Palestine to Indonesia and Australia. The British government interned the Dutch aircraft at Shoreham Airport. After negotiations, the Air Ministry and the Dutch government-in-exile contracted to use the KLM aircraft and crews to replace de Havilland Albatross aircraft on a scheduled service between Britain and Portugal, which BOAC started in June 1940 from Heston Aerodrome.

After the initial reservations about using Dutch crews were overcome, all-Dutch crews were used, although the flights used BOAC flight numbers and passenger handling. The KLM contingent was housed at BOAC's Whitchurch base.

The UK–Lisbon service operated up to four times per week. From 20 September 1940, passengers were flown from Whitchurch (although Heston continued as the London terminus for KLM from 26 June till 20 September 1940), and for Lisbon, the pre-war grass airfield at Sintra was used until October 1942, when the new runway was ready at Portela Airport, on the northern edge of Lisbon. By June 1943, over 500 KLM/BOAC flights had carried 4,000 passengers.

Originally, five Douglas DC-3s and one Douglas DC-2 airliner were available, but with the loss of a DC-3 on 20 September 1940 in a landing accident at Heston, and the destruction of another DC-3 in November 1940 by Luftwaffe bombing at Whitchurch, only four aircraft remained: DC-2 G-AGBH "Edelvalk" (ex-PH-ALE), DC-3 G-AGBD "Buizerd" (ex-PH-ARB), DC-3 G-AGBE "Zilverreiger" (ex-PH-ARZ), and DC-3 G-AGBB "Ibis" (ex-PH-ALI). In 1939, with war tensions in Europe increasing, KLM had painted their DC-2s and DC-3s bright orange to mark them clearly as civilian aircraft. BOAC repainted the aircraft in camouflage, with British civil markings and red/white/blue stripes like all BOAC aircraft, but without the Union Flag. They were later marked with their Dutch bird names under the cockpit windows. The interiors remained in KLM colours and markings.

British and German civilian aircraft operated from the same facilities at Portela and Allied and Axis spies, including British, German, Soviet, and American, watched the traffic. This was especially the case for the Lisbon–Whitchurch route, which frequently carried agents and escaped POWs to Britain. German spies were posted at terminals to record who was boarding and departing flights on the Lisbon–Whitchurch route. Harry Pusey, BOAC's operations officer in Lisbon between 1943 and 1944 described the area as "like "Casablanca" [the film], but twentyfold." According to CIA archives: "Most OSS operatives in Spain were handled out of Lisbon under nonofficial cover because the diplomatic staff in Madrid made a practice of identifying intelligence agents to the Spanish police."
The aircraft flying the Lisbon–Whitchurch route were left unmolested after the beginning of the war. Both Allied and Axis powers respected the neutrality of countries such as Portugal, Sweden, and Switzerland and refrained from attacking flights into and out of those nations. The war over the Bay of Biscay, which is north of Spain and off the west coast of France, began to heat up in 1942.

The Germans opened the "Atlantic Command" at Merignac near Bordeaux and Lorient to attack Allied shipping. In 1943, fighting over the area intensified and the RAF and Luftwaffe saw increased losses. This meant increased danger for BOAC aircraft flying between Lisbon and Whitchurch.

On 15 November 1942 the G-AGBB "Ibis" was attacked by a single Messerschmitt Bf 110 fighter, but was able to limp on to Lisbon where repairs were carried out. The damage sustained by cannon and machine gun fire included the port wing, engine nacelle, and fuselage. For damage pictures see 'External links' below.

On 19 April 1943, the aircraft was again attacked at coordinates 46 North, 9 West, by six Bf 110 fighters. Captain Koene Dirk Parmentier evaded the attackers by dropping to above the ocean and then climbing steeply into the clouds. The "Ibis" again sustained damage to the port aileron, shrapnel to the fuselage, and a punctured fuel tank. A new wingtip was flown to Lisbon to complete repairs. Despite these attacks, KLM and BOAC continued to fly the Lisbon–Whitchurch route.

Although there were still two other KLM DC-3's and one KLM DC-2 in use by BOAC on the same route, only the G-AGBB "Ibis" was attacked three times.

The Douglas DC-3-194 was the first DC-3 delivered to KLM on 21 September 1936. It originally carried the aircraft registration PH-ALI and was named "Ibis", the bird venerated in the ancient world. In the afternoon of 9 May 1940, the day before the German invasion of the Netherlands, the DC-3 arrived in Shoreham on a scheduled flight from Amsterdam under captain Quirinus Tepas. After the German invasion, the aircraft and its crew were instructed to remain in Britain. On 25 July 1940, the registration number was changed to G-AGBB and the aircraft was camouflaged in the standard brown-green RAF scheme of the time.

There were four Dutch crew on the flight. First in command: Captain Quirinus Tepas OBE, second in command: Captain Dirk de Koning (also aboard the second attack on the "Ibis"), wireless operator: Cornelis van Brugge (also known from the 1934 London-Melbourne MacRobertson Air Race), flight engineer: Engbertus Rosevink. Most crew members diverted to England in their aircraft after the German invasion in the Netherlands, and some of them settled in the Bristol area.

The passenger list included stage and film actor Leslie Howard; Alfred T. Chenhalls, Howard's friend and accountant; British journalist Kenneth Stonehouse, a Washington, D.C. correspondent of Reuters news agency, and his wife Evelyn Peggy Margetts Stonehouse; Rotha Hutcheon and her daughters Petra (11) and Carolina (18 months); Tyrrell Mildmay Shervington, director of Shell-Mex and BP Oil Company in Lisbon; Ivan James Sharp, a senior official of the United Kingdom Commercial Corporation (UKCC); Wilfrid Israel, a prominent Anglo-German Jewish activist working to save Jews from the Holocaust; and Gordon Thompson MacLean, an Inspector of British Consulates.

Flight 777 was full and several would-be passengers were turned away, including British Squadron Leader Wally Lashbrook. Three passengers disembarked before departure. Derek Partridge, the young son of a British diplomat, and his nanny Dora Rove were "bumped" to make room for Howard and Chenhalls, who had only confirmed their tickets at 5:00 the night before the flight and whose priority status allowed them to take precedence over other passengers. A Catholic priest also left the aircraft after boarding it, but his identity remains unknown. Anne Chichester-Constable, 7 year old daughter of WRNS Chief Officer Gladys Octavia Snow OBE was also booked on the flight which connected her return to England from New York. At the last minute, her guardians in Portugal decided that she was too tired and kept her in Portugal.

After the war, actor Raymond Burr said that he was briefly married to Scottish actress Annette Sutherland who was killed on Flight 777. Burr's biographer Ona L. Hill writes that "no one by the name of Annette Sutherland Burr was listed as a passenger on the plane."

The most intense intrigue surrounded actor Leslie Howard who was at the peak of his career and had world fame after "The Scarlet Pimpernel" (1934) and "Gone with the Wind" (1939). Aside from screen accolades, he was prized by the British government for his anti-Nazi propaganda and films produced in support of the war effort, such as "Pimpernel Smith" (1941). He had been in Spain and Portugal on a lecture tour promoting "The Lamp Still Burns", and the British Council invited him on the tour. He had some qualms, but British Foreign Secretary Anthony Eden encouraged him to go.

Shervington was director of Shell-Mex and BP Oil Company in Lisbon, but he was also agent H.100 of the Special Operations Executive's Iberian operation. José Antonio Barreiros suggests that Shervington was the actual target of the attack rather than Howard.

Another passenger was Wilfrid Israel, a member of an important Anglo-German Jewish family and a rescuer of Jews from the Holocaust who had close connections to the British government. He was born in England to an Anglo-Jewish mother and German Jewish father, and he and his brother had run the Nathan Israel Department Store in Berlin until it was seized by the Nazis in 1938. As early as 1933, he was obtaining information about Nazi arrest lists and warning the intended victims. He worked with consular officials in the British embassy to obtain visas, and he dismissed 700 of his firm's Jewish staff with two years' pay in 1936, telling them to save themselves by leaving Germany. After Kristallnacht, he was instrumental in setting up the Kindertransport which saved more than 10,000 Jewish children from Germany and Austria. He remained in Berlin until 1939 when he left for Britain. He returned to Berlin once more before the outbreak of war to secure the departure of a last trainload of children. On 26 March 1943, he left Britain for Portugal and spent two months investigating the situation of Jews in Spain and Portugal; he found as many as 1,500 Jewish refugees in Spain, many of whom he aided in obtaining Palestine certificates, and he proposed a plan to the British government to aid them.

On 1 June 1943, the BOAC flight from Lisbon to Whitchurch was assigned to the "Ibis" and given flight number 777-A. It was originally scheduled to take off at 7:30 am but was delayed when Howard got off to pick up a package that he had left at customs; it departed at 7:35 GMT. Whitchurch received a departure message and continued regular radio contact until 10:54. The flight was roughly northwest of the coast of Spain when Whitchurch received a message from wireless operator van Brugge that they were being followed and fired upon at 46°30'N, 009°37'W. Shortly afterwards, the aircraft crashed and sank in the Bay of Biscay.

The following day, BOAC released a statement:

"The New York Times" announced on 3 June: "A British Overseas Airways transport plane, with the actor Leslie Howard reported among its 13 passengers, was officially declared overdue and presumed lost today.… In their daily communique, broadcast from Berlin and recorded by The Associated Press, the Germans said: 'Three enemy bombers and one transport were downed by German reconnaissance planes over the Atlantic'."

"Time" magazine carried a brief story on 14 June, including details of the final radio broadcast from the Dutch pilot. "I am being followed by strange aircraft. Putting on best speed.… we are being attacked. Cannon shells and tracers are going through the fuselage. Wave-hopping and doing my best." The news of Howard's death was published in the same issue of "The Times" that falsely reported the death of Major William Martin, the red herring used for the ruse involved in Operation Mincemeat.

"Bloody Biscay: The History of V Gruppe/Kampfgeschwader 40" by Christopher H. Goss revealed one of the most detailed versions of the attack. The book states that BOAC Flight 777 was not intentionally targeted and was shot down when it was mistaken for an Allied military aircraft. The account is composed of the author's analysis of events and interviews, conducted decades after the war ended, with some of the German pilots involved in the attack.

According to this account, eight Junkers Ju 88C-6 heavy fighters ("Zerstörer") from the 14th Staffel of the Luftwaffe's main maritime bomber wing, "Kampfgeschwader 40", took off from Bordeaux at 10:00 hrs local time to find and escort two U-boats; these aircraft belonged to the long-range fighter group known as "Gruppe V Kampfgeschwader 40". The names of four of the eight pilots are known: Staffelführer Oberleutnant (Oblt) Herbert Hintze, Leutnant Max Wittmer-Eigenbrot, Oblt Albrecht Bellstedt, and Oberfeldwebel (Ofw) Hans Rakow. The pilots claim that before setting out they were unaware of the presence of the Lisbon to Whitchurch flights. Due to bad weather, the search for the U-boats was called off and the fighters continued a general search. At 12:45 hrs, BOAC Flight 777 was spotted in P/Q 24W/1785 heading north. Approximately five minutes later, the Ju 88s attacked. Hintze retold his account for Goss as follows: "A 'grey silhouette' of a plane was spotted from 2,000–3,000 metres (6,600–9,800 ft) and no markings could be made out, but by the shape and construction of the plane it was obviously enemy." Bellstedt radioed: "Indians at 11 o'clock, AA (code for enemy aircraft ahead slightly to left, attack)." BOAC Flight 777 was attacked from above and below by the two Ju 88s assigned to a high position over the flight, and the port engine and wing caught fire. At this point flight leader Hintze, at the head of the remaining six Ju 88s, caught up to the DC-3 and recognised the aircraft as civilian, immediately calling off the attack, but the burning DC-3 was already severely damaged with the port engine out. Three parachutists exited the burning aircraft, but their chutes did not open as they were on fire. The aircraft then crashed into the ocean, where it floated briefly before sinking. There were no signs of survivors.

Hintze states that all the German pilots involved expressed regret for shooting down a civilian aircraft and were "rather angry" with their superiors for not informing them that there was a scheduled flight between Lisbon and Britain. Goss writes that official German records back up Hintze's account that "Staffel" 14/KG 40 was carrying out normal operations and that the day's events occurred because the U-boats could not be found. He concludes that "there is nothing to prove that [the German pilots] were deliberately aiming to shoot down the unarmed DC-3." This account of the German pilots and Goss's conclusions are challenged by some authorities.

The research of Ben Rosevink, a retired research technician at the University of Bristol, and son of BOAC Flight 777 flight engineer Engbertus Rosevink supplements Hintze's version. In the 1980s, Rosevink tracked down and interviewed three of the German pilots involved in the attack, including the one who fired on BOAC Flight 777. In a 2010 interview with the "Bristol Evening Post," Rosevink stated that he was convinced of the veracity of the German account.

The following day, a search of the Bay of Biscay was undertaken by "N/461", a Short Sunderland flying boat from the Royal Australian Air Force's 461 Squadron. Near the same coordinates where the DC-3 was downed, the Sunderland was attacked by eight V/KG40 Ju 88s and after a furious battle, managed to shoot down three of the attackers, scoring an additional three "possibles," before crash-landing at Penzance. In the aftermath of these two actions, all BOAC flights from Lisbon were subsequently re-routed and operated only under cover of darkness.

There are several theories as to why BOAC Flight 777 was shot down by the German pilots. All of these contradict the claims by the German pilots that they were not ordered to shoot down the airliner, either because the theories were formulated before the testimonies of the German pilots were recorded in the 1990s, or because the authors disbelieve the German accounts.

The most popular theory surrounding the downing of BOAC Flight 777 is that German intelligence mistakenly believed Winston Churchill was on the flight. This theory appeared in the press within days of the incident, and Churchill himself supported it. In late May 1943, Churchill and Foreign Secretary Anthony Eden travelled to North Africa for a meeting with United States General Dwight D. Eisenhower.

The German government was eager to assassinate Churchill on his return flight home, and monitored flights in and out of the region in case the Prime Minister tried to sneak home aboard a civilian airliner. This scenario was plausible as Churchill flew to Britain from Bermuda in January 1942 aboard a scheduled commercial airline flight. Rumours had circulated since early May that Churchill might fly home from Lisbon. Some have speculated that Britain's Secret Intelligence Service planted these rumours to mask Churchill's travel itinerary.

According to the Churchill assassination theory, as passengers were boarding BOAC Flight 777, German agents spotted what Churchill described in his memoirs as "a thick-set man smoking a cigar," whom they mistook for the Prime Minister. This man was later identified as Alfred T. Chenhalls, Howard's accountant and portly travel companion. In addition, some have speculated that the tall and thin Howard may have been mistaken for Detective Inspector Walter H. Thompson, Churchill's personal bodyguard who had a similar physical appearance. There is an even more elaborate version of this theory that posits Chenhalls was employed by the British government as Churchill's "deliberate double" and that he and Howard boarded BOAC Flight 777 knowing they were going to die. An alternative version of this is that the British government had intercepted German messages via the Ultra code breaking operations, but failed to notify the BOAC Flight 777 for fear of compromising the use of Ultra decrypted messages. Both "Flight 777" (1957), a book by Ian Colvin about the incident, and "In Search of My Father" (1981), by Leslie Howard's son Ronald Howard, lend credence to the idea that BOAC Flight 777 was downed because the Germans thought Churchill was on the flight.

Churchill appeared to accept this theory in his memoirs, although he is extremely critical of the poor German intelligence that led to the disaster. He wrote, "The brutality of the Germans was only matched by the stupidity of their agents. It is difficult to understand how anyone could imagine that with all the resources of Great Britain at my disposal I should have booked a passage in an unarmed and unescorted plane from Lisbon and flown home in broad daylight." As it was, Churchill travelled back to Britain via Gibraltar, departing on the evening of 4 June 1943 in a converted Consolidated B-24 Liberator transport and arriving in Britain the next morning.

In the BBC television series, "Churchill's Bodyguard" (original broadcast 2006), it is suggested that ("Abwehr") German intelligence agents were in contact with members of the merchant navy in Britain and were informed of Churchill's departure and route. German spies watching the airfields of neutral countries may have mistaken Howard and his manager, as they boarded their aircraft, for Churchill and his bodyguard. "Churchill's Bodyguard" noted that Thompson wrote that Winston Churchill at times seemed clairvoyant about suspected threats to his safety, and acting on a premonition, he changed his departure to the following day. The crux of the theory posited that Churchill asked one of his men to tamper with an engine on his aircraft, giving him an excuse not to travel at that time. Speculation by historians has also centred on whether the British code breakers had decrypted several top secret Enigma messages that detailed the assassination plan. Churchill wanted to protect any information uncovered by the code breakers so the "Oberkommando der Wehrmacht" would not suspect that their Enigma machines were compromised. Although the overwhelming majority of published documentation of the case repudiates this theory, it remains a possibility. Coincidentally, the timing of Howard's takeoff and the flight path was similar to Churchill's, making it easy for the Germans to mistake the two flights.

Several books focused on Flight 777, including "Flight 777" (Ian Colvin, 1957) and "In Search of My Father: A Portrait of Leslie Howard" (Ronald Howard, Leslie's son, 1984), conclude that the Germans were almost certainly out to shoot down the DC-3 to kill Howard himself. Howard had been travelling through Spain and Portugal, ostensibly lecturing on film, but also meeting with local propagandists and shoring up support for the Allied cause. The Germans in all probability suspected even more surreptitious activities since German agents were active throughout Spain and Portugal, which, like Switzerland, was a crossroads for persons from both sides of the conflict, but even more accessible to Allied citizens. James Oglethorpe, a British historian specialising in the Second World War, has investigated Leslie's connection to the secret services. Ronald Howard's book, in particular, explores in great detail written German orders to the Ju 88 "Staffel" based in France, assigned to intercept the aircraft, as well as communiqués on the British side that verify intelligence reports of the time indicating a deliberate attack on Howard. These accounts also indicate that the Germans were aware of Churchill's whereabouts at the time and were not so naïve as to believe he would be travelling alone on board an unescorted and unarmed civilian aircraft, which Churchill also acknowledged as improbable. Howard and Chenhalls were not originally booked on the flight, and used their priority status to have passengers removed from the fully booked airliner. Of the 13 travellers on board, most were either British executives with corporate ties to Portugal, or comparatively lower-ranked British government civil servants. There were also two or three children of British military personnel.

While ostensibly on "entertainer goodwill" tours at the behest of the British Council, Howard's intelligence-gathering activities had attracted German interest. The chance to demoralise Britain with the loss of one of its most outspokenly patriotic figures may have been behind the Luftwaffe attack. A 2008 book by Spanish writer José Rey Ximena claims that Howard was on a top-secret mission for Churchill to dissuade Francisco Franco, Spain's authoritarian dictator and head of state, from joining the Axis powers. Via an old girlfriend (Conchita Montenegro), Howard had contacts with Ricardo Giménez-Arnau, who at the time was a young and very humble diplomat in the Spanish Ministry of Foreign Affairs. Further circumstantial background evidence is revealed in Jimmy Burns's 2009 biography of his father, spymaster Tom Burns. According to author William Stevenson in "A Man called Intrepid", his biography of Sir William Samuel Stephenson (no relation), the senior representative of British Intelligence for the western hemisphere during the Second World War, Stephenson postulated that the Germans knew about Howard's mission and ordered the aircraft shot down. Stephenson further claimed that Churchill knew in advance of the German intention to shoot down the aircraft, but decided to allow it to proceed to protect the fact that the British had broken the German Enigma code.

Ronald Howard was convinced the order to shoot down Howard's airliner came directly from Joseph Goebbels, Minister of Public Enlightenment and Propaganda in Nazi Germany, who had been ridiculed in one of Howard's films and who believed Howard to be the most dangerous British propagandist.
The theory that Leslie Howard was targeted for assassination because of his role as an anti-Nazi propaganda figure is supported by journalist and law professor Donald E. Wilkes Jr. Wilkes writes that Joseph Goebbels could have orchestrated the downing of BOAC Flight 777 because he was "enraged" by Howard's propaganda and was Howard's "bitterest enemy." The fact that Howard was Jewish would only further buttress this theory. In fact, Germany's propaganda machine boasted at Howard's death and Joseph Goebbels' propagandist newspaper "Der Angriff" ("The Attack") ran the headline "Pimpernel Howard has made his last trip," which was a reference to both the 1934 movie "The Scarlet Pimpernel" where the actor played a mysterious British hero who secretly saves French citizens from the Reign of Terror, and the 1941 offshoot film "Pimpernel Smith" that starred Howard as a professor who rescues victims of Nazi persecution.

One of the less credible theories that circulated at the time was reported by Harry Pusey. Before the attack on BOAC Flight 777, the film "The First of the Few" about the life of R. J. Mitchell, the engineer behind the Supermarine Spitfire, was playing widely in Lisbon cinemas and had starred Howard as Mitchell. The gossip on the streets of Lisbon was that German agents had mistakenly thought Howard was Mitchell and ordered the downing of BOAC Flight-777. Pusey debunked this theory: "But you would have thought someone in German Intelligence would have known that Mitchell had died in 1937, wouldn't you?"

The 2010 biography by Estel Eforgan, "Leslie Howard: The Lost Actor" examines currently available evidence and concludes that Howard was not a specific target, corroborating the claims by German sources that the shooting down was "an error in judgement."

The downing of BOAC Flight 777 elicited headlines around the world and there was widespread public grief, especially for the loss of Leslie Howard, who was championed as a martyr. The British government condemned the downing of BOAC Flight 777 as a war crime. The public's attention shifted focus as other events occurred. Nonetheless, two authoritative works examined the circumstances of the downing of BOAC Flight 777: in 1957, journalist Ian Colvin's book on the disaster entitled "Flight 777: The Mystery of Leslie Howard" and in 1984, Howard's son Ronald's biography of his father.

In 2003, on the 60th anniversary of the downing of Flight 777, a pair of television documentaries on the subject were released: the BBC series "Inside Out" and the History Channel's "Vanishings! Leslie Howard – Movie Star or Spy?".

In 2009 the grandson of Ivan Sharp, who lives in Norwich, and has the same name as his grandfather, arranged for a memorial plaque for the crew and passengers of BOAC Flight 777 to be dedicated at Lisbon Airport. On 1 June 2010, a similar plaque, paid for by Sharp, was unveiled at Whitchurch Airport in Bristol, and a brief memorial was held by friends and family of those killed on the flight.

A documentary film "Leslie Howard: The Man Who Gave A Damn" (2016), which includes commentary on the ill-fated flight, was narrated by Derek Partridge, who at the age of seven gave up his seat on BOAC Flight 777 for Leslie Howard and Alfred T. Chenhalls and later in life, became a television and screen actor.


Which EU countries don't use the Euro?

Nine countries (Bulgaria, Croatia, Czech Republic, Denmark, Hungary, Poland, Romania, Sweden, and the United Kingdom) are EU members but do not use the euro. Before joining the eurozone, a state must spend two years in the European Exchange Rate Mechanism (ERM II). As of January 2017, only the National Central Bank (NCB) of Denmark participates in ERM II.

Eurozone

The eurozone, officially called the euro area, is a monetary union of 19 of the 28 European Union (EU) member states which have adopted the euro (€) as their common currency and sole legal tender. The monetary authority of the eurozone is the Eurosystem. The other nine members of the European Union continue to use their own national currencies, although most of them are obliged to adopt the euro in the future.

The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain. Other EU states (except for Denmark and the United Kingdom) are obliged to join once they meet the criteria to do so. No state has left, and there are no provisions to do so or to be expelled. Andorra, Monaco, San Marino, and Vatican City have formal agreements with the EU to use the euro as their official currency and issue their own coins. Kosovo and Montenegro have adopted the euro unilaterally, but these countries do not officially form part of the eurozone and do not have representation in the European Central Bank (ECB) or in the Eurogroup.

The ECB, which is governed by a president and a board of the heads of national central banks, sets the monetary policy of the zone. The principal task of the ECB is to keep inflation under control. Though there is no common representation, governance or fiscal policy for the currency union, some co-operation does take place through the Eurogroup, which makes political decisions regarding the eurozone and the euro. The Eurogroup is composed of the finance ministers of eurozone states, but in emergencies, national leaders also form the Eurogroup.

Since the financial crisis of 2007–08, the eurozone has established and used provisions for granting emergency loans to member states in return for enacting economic reforms. The eurozone has also enacted some limited fiscal integration: for example, in peer review of each other's national budgets. The issue is political and in a state of flux in terms of what further provisions will be agreed for eurozone change.

In 1998, eleven member states of the European Union had met the euro convergence criteria, and the eurozone came into existence with the official launch of the euro (alongside national currencies) on 1 January 1999. Greece qualified in 2000, and was admitted on 1 January 2001 before physical notes and coins were introduced on 1 January 2002, replacing all national currencies. Between 2007 and 2015, seven new states acceded.

The 2012 data above of eurozone states does not include Latvia and Lithuania as they were not yet a part of the eurozone.

Five of the dependent territories of EU member states not part of the EU, have adopted the euro:

The euro is also used in countries outside the EU. Four states – Andorra, Monaco, San Marino, and Vatican City — have signed formal agreements with the EU to use the euro and issue their own coins. Nevertheless, they are not considered part of the eurozone by the ECB and do not have a seat in the ECB or Euro Group.

Kosovo and Montenegro officially adopted the euro as their sole currency without an agreement and, therefore, have no issuing rights. These states are not considered part of the eurozone by the ECB. However, sometimes the term "eurozone" is applied to all territories that have adopted the euro as their sole currency. Further unilateral adoption of the euro (euroisation), by both non-euro EU and non-EU members, is opposed by the ECB and EU.

The chart below provides a full summary of all applying exchange-rate regimes for EU members, since the European Monetary System with its Exchange Rate Mechanism and the related new common currency ECU was born on 13 March 1979. The euro replaced the ECU 1:1 at the exchange rate markets, on 1 January 1999. During 1979-1999, the D-Mark functioned as a de facto anchor for the ECU, meaning there was only a minor difference between pegging a currency against ECU and pegging it against the D-mark.

The eurozone was born with its first 11 member states on 1 January 1999. The first enlargement of the eurozone, to Greece, took place on 1 January 2001, one year before the euro had physically entered into circulation. The next enlargements were to states which joined the EU in 2004, and then joined the eurozone on 1 January in the year noted: Slovenia (2007), Cyprus (2008), Malta (2008), Slovakia (2009), Estonia (2011), Latvia (2014), and Lithuania (2015).

All new EU members joining the bloc after the signing of the Maastricht treaty in 1992 are obliged to adopt the euro under the terms of their accession treaties. However, the last of the five economic convergence criteria which need first to be complied with in order to qualify for euro adoption, is the exchange rate stability criterion, which requires having been an ERM-member for a minimum of two years without the presence of "severe tensions" for the currency exchange rate.

In September 2011, a diplomatic source close to the euro adoption preparation talks with the seven remaining new member states who had yet to adopt the euro (Bulgaria, Czech Republic, Hungary, Latvia, Lithuania, Poland and Romania), claimed that the monetary union (eurozone) they had thought they were going to join upon their signing of the accession treaty may very well end up being a very different union entailing much closer fiscal, economic and political convergence. This changed legal status of the eurozone could potentially cause them to conclude that the conditions for their promise to join were no longer valid, which "could force them to stage new referendums" on euro adoption.

Denmark and the United Kingdom obtained special opt-outs in the original Maastricht Treaty. Both countries are legally exempt from joining the eurozone unless their governments decide otherwise, either by parliamentary vote or referendum.

The other seven countries are obliged to adopt the euro in future, although the EU has so far not tried to enforce any time plan. They should join as soon as they fulfill the convergence criteria, which include being part of ERM II for two years. Sweden, which joined the EU in 1995 after the Maastricht Treaty was signed, is required to join the eurozone. However, the Swedish people turned down euro adoption in a 2003 referendum and since then the country has intentionally avoided fulfilling the adoption requirements by not joining ERM II, which is voluntary.

Interest in joining the eurozone increased in Denmark, and initially in Poland, as a result of the 2008 financial crisis. In Iceland, there was an increase in interest in joining the European Union, a pre-condition for adopting the euro. However, by 2010 the debt crisis in the eurozone caused interest from Poland, as well as the Czech Republic, to cool. Latvia adopted the Euro in 2014, followed by Lithuania in 2015.

In the opinion of journalist Leigh Phillips and Locke Lord's Charles Proctor, there is no provision in any European Union treaty for an exit from the eurozone. In fact, they argued, the Treaties make it clear that the process of monetary union was intended to be "irreversible" and "irrevocable." However, in 2009, a European Central Bank legal study argued that, while voluntary withdrawal is legally not possible, expulsion remains "conceivable." Although an explicit provision for an exit option does not exist, many experts and politicians in Europe, have suggested an option to leave the Eurozone should be included in the relevant treaties.

On the issue of leaving the eurozone, the European Commission has stated that "[t]he irrevocability of membership in the euro area is an integral part of the Treaty framework and the Commission, as a guardian of the EU Treaties, intends to fully respect [that irrevocability]." It added that it "does not intend to propose [any] amendment" to the relevant Treaties, the current status being "the best way going forward to increase the resilience of euro area Member States to potential economic and financial crises. The European Central Bank, responding to a question by a Member of the European Parliament, has stated that an exit is not allowed under the Treaties.

Likewise there is no provision for a state to be expelled from the euro. Some, however, including the Dutch government, favour the creation of an expulsion provision for the case whereby a heavily indebted state in the eurozone refuses to comply with an EU economic reform policy.

In a Texas law journal, University of Texas at Austin law professor Jens Dammann has argued that even now EU law contains an implicit right for member states to leave the Eurozone if they no longer meet the criteria that they had to meet in order to join it. Furthermore, he has suggested that, under narrow circumstances, the European Union can expel member states from the eurozone.

University of California, Berkeley professor of Economics and Political Science Barry Eichengreen, argued in 2007 that "Europe’s leap to monetary union was a mistake...compounded by...including [in the union] also...Italy, Spain, Portugal and Greece," and that "although a breakup was not impossible...it was unlikely," given the technical, political and above all economic obstacles. "On the first minute that word got out," Eisengreen argued, "that the [Greek] government was discussing the possibility [of a Grexit] investors would sell their Greek stocks and bonds" and there "would be a full-fledged financial panic...a full-out bank run." In 2011, he still believed the probability of Grexit was "very low" and in case of any bank run "the Greek government would almost certainly receive support for its banks from its European Union partners and the European Central Bank, because, in his view, more financial crises in other European countries ar...the last thing that German business wants." As he put it, "the German economic miracle of the last ten years can be summed up in one word: exports. And the country’s export competitiveness has been greatly enhanced by a euro exchange rate that has been kept down at reasonable levels by the fact that Germany shares the currency with other weaker economies."

In Greece's case, one additional obstacle presented by analysts is that if Greece were to replace the euro with a new national currency, this would not be possible to achieve quickly enough. Paper banknotes must be printed and coins minted, which would takea about "six months." The changeover, according to a blogger in "The Economist", would likely require bank deposits to be converted from euros to the new currency and this prospect could lead to money leaving the country as well as Greek residents withdrawing cash from the banks, causing a bank run and necessitating capital controls.

The monetary policy of all countries in the eurozone is managed by the European Central Bank (ECB) and the Eurosystem which comprises the ECB and the central banks of the EU states who have joined the eurozone. Countries outside the eurozone are not represented in these institutions. Whereas all EU member states are part of the European System of Central Banks (ESCB), non EU member states have no say in all three institutions, even those with monetary agreements such as Monaco. The ECB is entitled to authorise the design and printing of euro banknotes and the volume of euro coins minted, and its president is currently Mario Draghi.

The eurozone is represented politically by its finance ministers, known collectively as the Eurogroup, and is presided over by a president, currently Mário Centeno. The finance ministers of the EU member states that use the euro meet a day before a meeting of the Economic and Financial Affairs Council (Ecofin) of the Council of the European Union. The Group is not an official Council formation but when the full EcoFin council votes on matters only affecting the eurozone, only Euro Group members are permitted to vote on it.

Since the global financial crisis of 2007–08, the Euro Group has met irregularly not as finance ministers, but as heads of state and government (like the European Council). It is in this forum, the Euro summit, that many eurozone reforms have been decided upon. In 2011, former French President Nicolas Sarkozy pushed for these summits to become regular and twice a year in order for it to be a 'true economic government'.

In April 2008 in Brussels, European Commission President Jean-Claude Juncker suggested that the eurozone should be represented at the IMF as a bloc, rather than each member state separately: "It is absurd for those 15 countries not to agree to have a single representation at the IMF. It makes us look absolutely ridiculous. We are regarded as buffoons on the international scene". In 2017 Juncker stated that he aims to have this agreed by the end of his mandate in 2019. However, Finance Commissioner Joaquín Almunia stated that before there is common representation, a common political agenda should be agreed upon.

Leading EU figures including the Commission and national governments have proposed a variety of reforms to the eurozone's architecture; notably the creation of a Finance Minister, a larger eurozone budget, and reform of the current bailout mechanisms into either a "European Monetary Fund" or a eurozone Treasury. While many have similar themes, details vary greatly.

HICP figures from the ECB, taken from May of each year:

Interest rates for the eurozone, set by the ECB since 1999. Levels are in percentages per annum. Between June 2000 and October 2008, the "main refinancing operations" were variable rate tenders, as opposed to fixed rate tenders. The figures indicated in the table from 2000 to 2008 refer to the minimum interest rate at which counterparties may place their bids.

The following table states the ratio of public debt to GDP in percent for eurozone countries given by EuroStat. The euro convergence criterion is 60%.

The primary means for fiscal coordination within the EU lies in the Broad Economic Policy Guidelines which are written for every member state, but with particular reference to the 19 current members of the eurozone. These guidelines are not binding, but are intended to represent policy coordination among the EU member states, so as to take into account the linked structures of their economies.

For their mutual assurance and stability of the currency, members of the eurozone have to respect the Stability and Growth Pact, which sets agreed limits on deficits and national debt, with associated sanctions for deviation. The Pact originally set a limit of 3% of GDP for the yearly deficit of all eurozone member states; with fines for any state which exceeded this amount. In 2005, Portugal, Germany, and France had all exceeded this amount, but the Council of Ministers had not voted to fine those states. Subsequently, reforms were adopted to provide more flexibility and ensure that the deficit criteria took into account the economic conditions of the member states, and additional factors.

The Organisation for Economic Co-operation and Development downgraded its economic forecasts on 20 March 2008 for the eurozone for the first half of 2008. Europe does not have room to ease fiscal or monetary policy, the 30-nation group warned. For the eurozone, the OECD now forecasts first-quarter GDP growth of just 0.5%, with no improvement in the second quarter, which is expected to show just a 0.4% gain.

The Fiscal Compact (formally, the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union), is an intergovernmental treaty introduced as a new stricter version of the Stability and Growth Pact, signed on 2 March 2012 by all member states of the European Union (EU), except the Czech Republic, the United Kingdom, and Croatia (subsequently acceding the EU in July 2013). The treaty entered into force on 1 January 2013 for the 16 states which completed ratification prior of this date. As of 1 April 2014, it had been ratified and entered into force for all 25 signatories.

Olivier Blanchard suggests that a fiscal union in the EZ can mitigate devastating effects of the single currency on the EZ peripheral countries. But he adds that the currency bloc will not work perfectly even if a fiscal transfer system is built, because, he argues, the fundamental issue about competitiveness adjustment is not tackled. The problem is, since the EZ peripheral countries do not have their own currencies, they are forced to adjust their economies by decreasing their wages instead of devaluation.

The financial crisis of 2007–08 prompted a number of reforms in the eurozone. One was a u-turn on the eurozone's bailout policy that led to the creation of a specific fund to assist eurozone states in trouble. The European Financial Stability Facility (EFSF) and the European Financial Stability Mechanism (EFSM) were created in 2010 to provide, alongside the International Monetary Fund (IMF), a system and fund to bail out members. However the EFSF and EFSM were temporary, small and lacked a basis in the EU treaties. Therefore, it was agreed in 2011 to establish a European Stability Mechanism (ESM) which would be much larger, funded only by eurozone states (not the EU as a whole as the EFSF/EFSM were) and would have a permanent treaty basis. As a result of that its creation involved agreeing an amendment to TEFU Article 136 allowing for the ESM and a new ESM treaty to detail how the ESM would operate. If both are successfully ratified according to schedule, the ESM would be operational by the time the EFSF/EFSM expire in mid-2013.

In February 2016, the UK secured further confirmation that countries that do not use the Euro would not be required to contribute to bailouts for Eurozone countries.

In June 2010, a broad agreement was finally reached on a controversial proposal for member states to peer review each other's budgets prior to their presentation to national parliaments. Although showing the entire budget to each other was opposed by Germany, Sweden and the UK, each government would present to their peers and the Commission their estimates for growth, inflation, revenue and expenditure levels six months before they go to national parliaments. If a country was to run a deficit, they would have to justify it to the rest of the EU while countries with a debt more than 60% of GDP would face greater scrutiny.

The plans would apply to all EU members, not just the eurozone, and have to be approved by EU leaders along with proposals for states to face sanctions before they reach the 3% limit in the Stability and Growth Pact. Poland has criticised the idea of withholding regional funding for those who break the deficit limits, as that would only impact the poorer states. In June 2010 France agreed to back Germany's plan for suspending the voting rights of members who breach the rules. In March 2011 was initiated a new reform of the Stability and Growth Pact aiming at straightening the rules by adopting an automatic procedure for imposing of penalties in case of breaches of either the deficit or the debt rules.

Nobel prize-winning economist James Tobin thought that the euro project would not succeed without making drastic changes to European institutions, pointing out the difference between the US and the eurozone. Concerning monetary policies, the US central bank FRB aims at both growth and reducing unemployment, while the ECB tends to give its first priority to price stability under Bundesbank's supervision. As the price level of the currency bloc is kept low, the unemployment level of the region has become higher than that of US since 1982.
When it comes to fiscal policies, 12 percent of the US federal budget is used for transfers to states and local governments. Also, when a state has financial or economic difficulties, a fair amount of money is automatically transferred to the state. The US government does not impose restrictions on state budget policies. This is different from the fiscal policies of the eurozone, where Treaty of Maastricht requires each eurozone member country to run its budget deficit smaller than 3 percent of its GDP.

In 1997, Arnulf Baring expressed concern that the European Monetary Union would make Germans the most hated people in Europe. Baring suspected the possibility that the people in Mediterranean countries would regard Germans and the currency bloc as economic policemen.