Euro

see also euro in various languages
Euro banknotes 1 euro coin
ISO 4217
Code	EUR (numeric: 978)
Subunit	0.01
Unit
Unit	euro
Plural	Varies, see language and the euro
Symbol	€‎
Nickname	The single currency[a]
Denominations
Subunit
1⁄100	euro cent (Name varies by language)
Plural
euro cent	(Varies by language)
Symbol
euro cent	c
Banknotes
Freq. used	€5, €10, €20, €50, €100, €200[2]
Rarely used	€500[2]
Coins
Freq. used	1c, 2c, 5c, 10c, 20c, 50c, €1, €2
Rarely used	1c, 2c (Belgium, Finland, Ireland, Italy, Netherlands, Slovakia[3][4])
Demographics
Date of introduction	1 January 1999; 25 years ago (1999-01-01)
Replaced	European Currency Unit
User(s)	primary: § members of Eurozone (20), also: § other users
Issuance
Central bank	European Central Bank
Website	www.ecb.europa.eu
Printer	see § Banknote printing
Mint	List of mints
Valuation
Inflation	2.6% (May 2024)[5]
Source	ec.europa.eu
Method	HICP
Pegged by	see § Pegged currencies

The euro (symbol: €; currency code: EUR) is the official currency of 20 of the 27 member states of the European Union. This group of states is officially known as the euro area or, more commonly, the eurozone. The euro is divided into 100 euro cents.^[6][7]

The currency is also used officially by the institutions of the European Union, by four European microstates that are not EU members,^[7] the British Overseas Territory of Akrotiri and Dhekelia, as well as unilaterally by Montenegro and Kosovo. Outside Europe, a number of special territories of EU members also use the euro as their currency. Additionally, over 200 million people worldwide use currencies pegged to the euro.

The euro is the second-largest reserve currency as well as the second-most traded currency in the world after the United States dollar.^{[8][9][10][11][12]} As of December 2019,^[update] with more than €1.3 trillion in circulation, the euro has one of the highest combined values of banknotes and coins in circulation in the world.^[13][14]

The name euro was officially adopted on 16 December 1995 in Madrid.^[15] The euro was introduced to world financial markets as an accounting currency on 1 January 1999, replacing the former European Currency Unit (ECU) at a ratio of 1:1 (US$1.1743 at the time). Physical euro coins and banknotes entered into circulation on 1 January 2002, making it the day-to-day operating currency of its original members, and by March 2002 it had completely replaced the former currencies.^[16]

Between December 1999 and December 2002, the euro traded below the US dollar, but has since traded near parity with or above the US dollar, peaking at US$1.60 on 18 July 2008 and since then returning near to its original issue rate. On 13 July 2022, the two currencies hit parity for the first time in nearly two decades due in part to the 2022 Russian invasion of Ukraine.^[17]

Characteristics

Administration

The euro is managed and administered by the European Central Bank (ECB, Frankfurt am Main) and the Eurosystem, composed of the central banks of the eurozone countries. As an independent central bank, the ECB has sole authority to set monetary policy. The Eurosystem participates in the printing, minting and distribution of euro banknotes and coins in all member states, and the operation of the eurozone payment systems.

The 1992 Maastricht Treaty obliges most EU member states to adopt the euro upon meeting certain monetary and budgetary convergence criteria, although not all participating states have done so. Denmark has negotiated exemptions,^[18] while Sweden (which joined the EU in 1995, after the Maastricht Treaty was signed) turned down the euro in a 2003 non-binding referendum, and has circumvented the obligation to adopt the euro by not meeting the monetary and budgetary requirements. All nations that have joined the EU since 1993 have pledged to adopt the euro in due course. The Maastricht Treaty was amended by the 2001 Treaty of Nice,^[19] which closed the gaps and loopholes in the Maastricht and Rome Treaties.

Countries that use the euro

Eurozone members

The 20 participating members are

Special territories of members of the European Economic Area

Special Autonomous Territories:

•  Finland
  •  Åland

•  Greece
  • Mount Athos

•  Spain
  •  Ceuta
  •  Melilla

Other users

Microstates with a monetary agreement:

British Overseas Territory:

Unilateral adopters:

EU members not using the euro

Obliged to adopt the euro

The following EU member states committed themselves in their respective Treaty of Accession to adopt the euro. However they do not have a deadline to do so and can delay the process by deliberately not complying with the convergence criteria (such as by not meeting the convergence criteria to join ERM II). Bulgaria and Romania are actively working to adopt the euro, while the remaining states do not have a migration plan in progress.

•  Bulgaria: The government of Bulgaria aims to replace the Bulgarian lev with the euro.^[27] In November 2023, Bulgarian euro coin design has been revealed and approved by the Bulgarian National Bank.^[28]
•  Czech Republic
•  Hungary
•  Poland
•  Romania
•  Sweden

Opt-out

The government of Denmark negotiated an opt-out to retain its currency.

•  Denmark

Coins and banknotes

Coins

The euro is divided into 100 cents (also referred to as euro cents, especially when distinguishing them from other currencies, and referred to as such on the common side of all cent coins). In Community legislative acts the plural forms of euro and cent are spelled without the s, notwithstanding normal English usage.^[29][30] Otherwise, normal English plurals are used,^[31] with many local variations such as centime in France.

All circulating coins have a common side showing the denomination or value, and a map in the background. Due to the linguistic plurality in the European Union, the Latin alphabet version of euro is used (as opposed to the less common Greek or Cyrillic) and Arabic numerals (other text is used on national sides in national languages, but other text on the common side is avoided). For the denominations except the 1-, 2- and 5-cent coins, the map only showed the 15 member states of the union as of 2002. Beginning in 2007 or 2008 (depending on the country), the old map was replaced by a map of Europe also showing countries outside the EU.^[32] The 1-, 2- and 5-cent coins, however, keep their old design, showing a geographical map of Europe with the EU member states as of 2002, raised somewhat above the rest of the map. All common sides were designed by Luc Luycx. The coins also have a national side showing an image specifically chosen by the country that issued the coin. Euro coins from any member state may be freely used in any nation that has adopted the euro.

The coins are issued in denominations of €2, €1, 50c, 20c, 10c, 5c, 2c, and 1c. To avoid the use of the two smallest coins, some cash transactions are rounded to the nearest five cents in the Netherlands and Ireland^[33][34] (by voluntary agreement) and in Finland and Italy (by law).^[35] This practice is discouraged by the commission, as is the practice of certain shops of refusing to accept high-value euro notes.^[36]

Commemorative coins with €2 face value have been issued with changes to the design of the national side of the coin. These include both commonly issued coins, such as the €2 commemorative coin for the fiftieth anniversary of the signing of the Treaty of Rome, and nationally issued coins, such as the coin to commemorate the 2004 Summer Olympics issued by Greece. These coins are legal tender throughout the eurozone. Collector coins with various other denominations have been issued as well, but these are not intended for general circulation, and they are legal tender only in the member state that issued them.^[37]

Coin minting

A number of institutions are authorised to mint euro coins:

Banknotes

The design for the euro banknotes has common designs on both sides. The design was created by the Austrian designer Robert Kalina.^[38] Notes are issued in €500, €200, €100, €50, €20, €10, and €5. Each banknote has its own colour and is dedicated to an artistic period of European architecture. The front of the note features windows or gateways while the back has bridges, symbolising links between states in the union and with the future. While the designs are supposed to be devoid of any identifiable characteristics, the initial designs by Robert Kalina were of specific bridges, including the Rialto and the Pont de Neuilly, and were subsequently rendered more generic; the final designs still bear very close similarities to their specific prototypes; thus they are not truly generic. The monuments looked similar enough to different national monuments to please everyone.^[39]

The Europa series, or second series, consists of six denominations and no longer includes the €500 with issuance discontinued as of 27 April 2019.^[40] However, both the first and the second series of euro banknotes, including the €500, remain legal tender throughout the euro area.^[40]

In December 2021, the ECB announced its plans to redesign euro banknotes by 2024. A theme advisory group, made up of one member from each euro area country, was selected to submit theme proposals to the ECB. The proposals will be voted on by the public; a design competition will also be held.^[41]

Issuing modalities for banknotes

Since 1 January 2002, the national central banks (NCBs) and the ECB have issued euro banknotes on a joint basis.^[42] Eurosystem NCBs are required to accept euro banknotes put into circulation by other Eurosystem members and these banknotes are not repatriated. The ECB issues 8% of the total value of banknotes issued by the Eurosystem.^[42] In practice, the ECB's banknotes are put into circulation by the NCBs, thereby incurring matching liabilities vis-à-vis the ECB. These liabilities carry interest at the main refinancing rate of the ECB. The other 92% of euro banknotes are issued by the NCBs in proportion to their respective shares of the ECB capital key,^[42] calculated using national share of European Union (EU) population and national share of EU GDP, equally weighted.^[43]

Banknote printing

Member states are authorised to print or to commission bank note printing. As of November 2022^[update], these are the printers:

Payments clearing, electronic funds transfer

Capital within the EU may be transferred in any amount from one state to another. All intra-Union transfers in euro are treated as domestic transactions and bear the corresponding domestic transfer costs.^[44] This includes all member states of the EU, even those outside the eurozone providing the transactions are carried out in euro.^[45] Credit/debit card charging and ATM withdrawals within the eurozone are also treated as domestic transactions; however paper-based payment orders, like cheques, have not been standardised so these are still domestic-based. The ECB has also set up a clearing system, TARGET, for large euro transactions.^[46]

History

Introduction