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{{About|the currency}}{{redirect-multi|2|EUR|Euros}}{{short description|European currency}}{{Use British English|date=March 2013}}{{Use dmy dates|date=March 2013}}

Bulgarian language>Bulgarian), ευρώ (Greek language), euró (Hungarian language>Hungarian), eoró (Irish language), eiro (Latvian language>Latvian), euras (Lithuanian language), ewro (Maltese language>Maltese), evro (Slovene)| image_1 = File:Euro Series Banknotes (2019).jpg{{!}}border| image_title_1 = Euro banknotes| image_2 = Common face of one euro coin.jpgEuro coins>coin| iso_code = EUR| iso_number = 978| iso_exponent = 2cent (currency)>centSee Linguistic issues concerning the euro>Euro linguistic issuesEuro sign>€cent sign>cACCESSDATE=1 APRIL 2009 WORK=OFFICIAL JOURNAL L 162, 19 JUNE 1997 P. 0001 â€“ 0003 Google hits for the phrase) Fiber and Language and the euro>others{{Collapsible list|bullets = true|titlestyle = font-weight:normal; background:transparent; text-align:left;Linguistic issues concerning the euro>local namesBulgarian language>Bulgarian)Greek language>Greek)Hungarian language>Hungarian)Latvian language>Latvian)Lithuanian language>Lithuanian)Maltese language>Maltese)Slovenian language>Slovene)}}5 euro note>€5, 10 euro note, 20 euro note>€20, 50 euro note, 100 euro note>€100HTTP://SDW.ECB.EUROPA.EU/REPORTS.DO?NODE=1000004111 >TITLE=ECB STATISTICAL DATA WAREHOUSE, REPORTS>ECB/EUROSYSTEM POLICY>BANKNOTES AND COINS STATISTICS>1.EURO BANKNOTES>1.1 QUANTITIES PUBLISHER=EUROPEAN CENTRAL BANK, 200 euro note>€200, €5001 euro cent coin>1c, 2 euro cent coin, 5 euro cent coin>5c, 10 euro cent coin, 20 euro cent coin>20c, 50 euro cent coin, 1 euro coin>€1, €21 euro cent coin>1c, 2c (Finland, Italy, Ireland and The Netherlands)| subunit_ratio_1 = 1/100Linguistic issues concerning the euro>varies depending on language | plural_subunit_1 = See article| banknote_article = euro banknotes| coin_article = euro coinstitlestyle = font-weight:normal; background:transparent; text-align:left;European Union}} European Union (19)Eurozone>Euro areaAustria}}Belgium{{FlagNorthern Cyprus that uses Turkish lira>{{Flag{{Flag{{Flagoverseas departments (French Guiana, Guadeloupe, Martinique, Mayotte and Réunion)>{{Flag{{Flag{{Flag{{FlagCampione d'Italia in Switzerland that uses the Swiss franc.>{{Flag{{Flag{{Flag{{Flag{{FlagCaribbean Netherlands introduced the United States dollar in 2011. Curaçao, Sint Maarten and Aruba have their own currencies, which are pegged to the dollar.>{{Flag{{Flag{{Flag{{Flag|Spain}}}}{{Collapsible list|titlestyle = font-weight:normal; background:transparent; text-align:left;|title = Monetary agreement (10)Andorra}}HTTP://EUR-LEX.EUROPA.EU/LEXURISERV/LEXURISERV.DO?URI=OJ:C:2011:369:0001:0013:EN:PDF >TITLE=MONETARY AGREEMENT BETWEEN THE EUROPEAN UNION AND THE PRINCIPALITY OF ANDORRA ACCESSDATE=2012-09-08, Official Journal of the European Union, Monaco}}HTTP://EUR-LEX.EUROPA.EU/LEXURISERV/LEXURISERV.DO?URI=OJ:L:2002:142:0059:0073:EN:PDF >TITLE=BY MONETARY AGREEMENT BETWEEN FRANCE (ACTING FOR THE EC) AND MONACO, 30 May 2010, San Marino}}HTTP://EUR-LEX.EUROPA.EU/LEXURISERV/LEXURISERV.DO?URI=OJ:C:2001:209:0001:0004:EN:PDF >TITLE=BY MONETARY AGREEMENT BETWEEN ITALY (ACTING FOR THE EC) AND SAN MARINO, 30 May 2010, Vatican City}}HTTP://EUR-LEX.EUROPA.EU/LEXURISERV/LEXURISERV.DO?URI=OJ:C:2001:299:0001:0004:EN:PDF >TITLE=BY MONETARY AGREEMENT BETWEEN ITALY (ACTING FOR THE EC) AND VATICAN CITY, 30 May 2010, GBR}} Akrotiri and Dhekelia (United Kingdom)HTTP://WWW.SBA.MOD.UK/SBA%20LEGISLATION/ORD%202007/EURO%20ORDINANCE%202007.PDF >TITLE=BY THE THIRD PROTOCOL TO THE CYPRUS ADHESION TREATY TO EU AND BRITISH LOCAL ORDINANCE, 17 July 2011, FRA}} Clipperton Island (France)FRA}} Saint Barthélemy (France)FRA}} Saint Martin (France)FRA}} French Southern and Antarctic Lands (France)SPMSaint Pierre and Miquelon (France)HTTP://EUR-LEX.EUROPA.EU/LEXURISERV/LEXURISERV.DO?URI=OJ:L:1999:030:0029:0030:EN:PDF ACCESSDATE=30 MAY 2010, }}titlestyle = font-weight:normal; background:transparent; text-align:left;International status and usage of the euro#Unilateral adopters>Other users (2)Kosovo}}HTTP://WWW.UNMIKONLINE.ORG/REGULATIONS/ADMDIRECT/1999/089%20FINAL%20%20ADE%201999-02.HTM >TITLE=BY UNMIK ADMINISTRATION DIRECTION 1999/2 ACCESSDATE=30 MAY 2010 ARCHIVEURL=HTTPS://WEB.ARCHIVE.ORG/WEB/20110607234444/HTTP://WWW.UNMIKONLINE.ORG/REGULATIONS/ADMDIRECT/1999/089%20FINAL%20%20ADE%201999-02.HTM DF=DMY, Montenegro}}See Montenegro and the euro}}{{Collapsible list|titlestyle = font-weight:normal; background:transparent; text-align:left;International status and usage of the euro#Usage in states with another official currency>Other partial users (1)Zimbabwe}}HTTP://USELESSK.COM/FACTS/IN-ZIMBABWE-THERE-ARE-NINE-OFFICIAL-CURRENCIES-AMONGST-OTHERS-THE-EURO-AND-THE-US-DOLLAR >TITLE=IN ZIMBABWE THERE ARE NINE CURRENCIES, AMONGST OTHERS THE EURO AND THE US DOLLAR ACCESSDATE=29 MAY 2014 ARCHIVE-DATE=15 JANUARY 2015 DF=DMY-ALL, HTTP://WWW.GEOCURRENTS.INFO/GEONOTES/AND-THE-CURRENCY-OF-ZIMBABWE-IS >TITLE=CURRENTLY, THE SOUTH AFRICAN RAND, BOTSWANA PULA, POUND STERLING, EURO, AND THE UNITED STATES DOLLAR ARE ALL IN USE ACCESSDATE=29 MAY 2014, }}{{Collapsible list|titlestyle = font-weight:normal; background:transparent; text-align:left;Single Euro Payments Area>Single euro payments area (13 from 35)Bulgaria}}Croatia}}Czech Republic}}Denmark}}Hungary}}Iceland}}Liechtenstein}}Norway}}Poland}}Romania}}Sweden}}Switzerland}}United Kingdom}}}}| issuing_authority = European Central}}| printer = {{Collapsible list|bullets = true|titlestyle = font-weight:normal; background:transparent; text-align:left;|title = Several|frame_style = border:none; padding: 0;|Istituto Poligrafico e Zecca dello Stato|Banco de Portugal|Bank of Greece|Banque de France|Bundesdruckerei|Central Bank of Ireland|De La Rue|Fábrica Nacional de Moneda y Timbre|François-Charles Oberthur|Giesecke & DevrientJoh. Enschedé>Royal Joh. Enschedé|National Bank of BelgiumOesterreichische Nationalbank>Österreichische Banknoten- und Sicherheitsdruck GmbHSetec (Company of Finland)>Setec Oy}}| printer_website = {{Collapsible list|bullets = true|titlestyle = font-weight:normal; background:transparent; text-align:left;|title = Several|frame_style = border:none; padding: 0;|Istituto Poligrafico e Zecca dello Stato|Banco de Portugal â€“ Imprensa Nacional / Casa da Moeda|Bank of Greece|Banque de France|Bundesdruckerei|Central Bank and Financial Services Authority of Ireland|De La Rue|Fábrica Nacional de Moneda y Timbre|François-Charles Oberthur|Giesecke & Devrient|Royal Joh. Enschedé|National Bank of Belgium|Oesterreichische Banknoten- und Sicherheitsdruck GmbH|Setec Oy}}| mint = {{Collapsible list|bullets = true|titlestyle = font-weight:normal; background:transparent; text-align:left;|title = Several|frame_style = border:none; padding: 0;Bavarian Central Mint>Bayerisches Hauptmünzamt, Munich (Mint mark: D)|Currency Centre|Fábrica Nacional de Moneda y Timbre|Hamburgische Münze (J)|Imprensa Nacional Casa da Moeda SA|Istituto Poligrafico e Zecca dello Stato|Koninklijke Nederlandse MuntRoyal Belgian Mint>Koninklijke Munt van België/Monnaie Royale de BelgiqueKremnica mint>Mincovňa Kremnica|Monnaie de Paris|Münze ÖsterreichRahapaja Oy>Rahapaja Oy/Myntverket i Finland Ab|Staatliche Münze Berlin (A)Staatliche Münzen Baden-Württemberg>Staatliche Münze Karlsruhe (G)Staatliche Münzen Baden-Württemberg>Staatliche Münze Stuttgart (F)|Lithuanian Mint}}| mint_website = {{Collapsible list|bullets = true|titlestyle = font-weight:normal; background:transparent; text-align:left;|title = Several|frame_style = border:none; padding: 0;|1=Munich mint|2=Currency Centre|3=Fábrica Nacional de Moneda y Timbre|4=Hamburg mint|5=Imprensa Nacional â€“ Casa da Moeda SA|6=Istituto Poligrafico e Zecca dello StatoKoninklijke Nederlandse Munt{{dead link>date=July 2016 fix-attempted=yes }}|8=Koninklijke Munt van België/Monnaie Royale de Belgique|9=Mincovňa Kremnica|10=Monnaie de Paris|11=Münze Österreich|12=Rahapaja Oy/Myntverket i Finland Ab|13=Berlin mint|14=Karlsruhe-Stuttgart mints|15=Lithuanian mint}}| inflation_rate = 1.6% (half of 2019)titlestyle = font-weight:normal; background:transparent; text-align:left;International status and usage of the euro#Pegged currencies>12 currencies|frame_style = border:none; padding: 0;Belarus}} Belarusian rubleThe Belarusian ruble is pegged to the euro, Russian ruble and US$ in a currency basket.Bosnia and Herzegovina}} Bosnia & Herz. convertible markBulgaria}} Bulgarian levCape Verde}} Cape Verdean escudo|Central African CFA franc|CFP francComoros}} Comorian francDenmark}} Danish kroneNorth Macedonia}} Macedonian denarCARDOSO >FIRST=PAULO URL=HTTP://WWW.THE-AMERICAN-TIMES.COM/AMERICAN-TIMES-GOVERNOR-NATIONAL-BANK-MACEDONIA-DIMITAR-BOGOV/2013/10/05 PUBLISHER=HAZLEHURST MEDIA SA ARCHIVE-URL=HTTPS://WEB.ARCHIVE.ORG/WEB/20131020073010/HTTP://WWW.THE-AMERICAN-TIMES.COM/AMERICAN-TIMES-GOVERNOR-NATIONAL-BANK-MACEDONIA-DIMITAR-BOGOV/2013/10/05 URL-STATUS=DEAD, Morocco}} Moroccan dirhamSão Tomé and Príncipe}} São Tomé and Príncipe dobra|West African CFA franc}}| inflation_source_date = ecb.europa.euHarmonised Index of Consumer Prices>HICP| printer_override_with_original_text = Y| mint_override_with_original_text = Y}}{{Politics of the European Union}}The euro (sign: €; code: EUR) is the official currency of 19 of the {{EUnum}} member states of the European Union. This group of states is known as the eurozone or euro area, and counts about 343 million citizens {{as of|2019|lc=y}}.WEB,weblink The euro, 2 January 2019, European Commission website, WEB, 2019-01-02, What is the euro area?,weblink European Commission website, The euro, which is divided into 100 cents, is the second-largest and second-most traded currency in the foreign exchange market after the United States dollar.WEB, Foreign exchange turnover in April 2013: preliminary global results,weblink Bank for International Settlements, 7 February 2015, The currency is also used officially by the institutions of the European Union, by four European microstates that are not EU members, 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, 240 million people worldwide {{As of|2018|lc=y}} use currencies pegged to the euro.{{citation needed|date=January 2019}}The euro is the second-largest reserve currency as well as the second-most traded currency in the world after the United States dollar.WEB,weblink Triennial Central Bank Survey 2007, BIS, 19 December 2007, 25 July 2009, WEB,weblink Aristovnik, Aleksander, ÄŒeč, Tanja, Compositional Analysis of Foreign Currency Reserves in the 1999–2007 Period. The Euro vs. The Dollar As Leading Reserve Currency, Munich Personal RePEc Archive, Paper No. 14350, 30 March 2010, 27 December 2010, NEWS, Boesler, Matthew, There Are Only Two Real Threats To The US Dollar's Status As The International Reserve Currency,weblink 8 December 2013, Business Insider, 11 November 2013, {{As of|2018|08}}, with more than €1.2 trillion in circulation, the euro has one of the highest combined values of banknotes and coins in circulation in the world, having surpassed the U.S. dollar.WEB,weblink Banknotes and coins circulation, 28 August 2018, European Central Bank, {{As of|2013|04|26}}:Total EUR currency (coins and banknotes) in circulation 771.5 (banknotes) + 21.032 (coins) =792.53 billion EUR * 1.48 (exchange rate) = 1,080 billion USD Total USD currency (coins and banknotes) in circulation 859 billion USD
  • WEB,weblink Table 2: Euro banknotes, values (EUR billions, unless otherwise indicated, not seasonally adjusted), 13 December 2009, European Central Bank, 2009, October: Total banknotes: 771.5 (billion EUR), dead,weblink 22 February 2010, dmy-all,
  • WEB,weblink Table 4: Euro coins, values (EUR millions, unless otherwise indicated, not seasonally adjusted), 13 December 2009, European Central Bank, 2009, October: Total coins: 21,032 (million EUR), dead,weblink 22 February 2010, dmy-all,
  • WEB,weblink Money Stock Measures, 13 December 2009, Federal Reserve Statistical Release, Board of Governors of the Federal Reserve System, Table 5: Not Seasonally Adjusted Components of M1 (Billions of dollars), not seasonally adjusted, October 2009: Currency: 859.3 (billion USD),
  • WEB,weblink Euro foreign exchange reference rates, 13 December 2009, European Central Bank, Exchange rate 2009-10-30: 1 EUR = 1.48 USD,
The name euro was officially adopted on 16 December 1995 in Madrid.WEB,weblink Madrid European Council (12/95): Conclusions, European Parliament, 14 February 2009, 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). 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.WEB,weblink Initial changeover (2002), European Central Bank, 5 March 2011, While the euro dropped subsequently to US$0.83 within two years (26 October 2000), it has traded above the U.S. dollar since the end of 2002, peaking at US$1.60 on 18 July 2008.WEB,weblink Exchange Rate Average (US Dollar, Euro) â€“ X-Rates,, 2013-03-12, In late 2009, the euro became immersed in the European sovereign-debt crisis, which led to the creation of the European Financial Stability Facility as well as other reforms aimed at stabilising and strengthening the currency.


File:European Central Bank - building under construction - Frankfurt - Germany - 13.jpg|thumb|upright=0.7|The European Central Bank has its seat in Frankfurt, Germany, and is in charge of the monetary policy of the eurozoneeurozoneThe euro is managed and administered by the Frankfurt-based European Central Bank (ECB) 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 notes 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 states have done so. The United Kingdom and Denmark negotiated exemptions,WEB, The Euro, European Commission,weblink 29 January 2009, while Sweden (which joined the EU in 1995, after the Maastricht Treaty was signed) turned down the euro in a 2003 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.

Issuing modalities for banknotes

Since 1 January 2002, the national central banks (NCBs) and the ECB have issued euro banknotes on a joint basis.BOOK,weblink Since 1 January 2002, the NCBs and the ECB have issued euro banknotes on a joint basis., The European Central Bank: History, Role and Functions, Hanspeter K., Scheller, 2nd, 2006, 978-92-899-0027-0, 103, Euro banknotes do not show which central bank issued them.{{dubious|date=February 2018}} 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. 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, calculated using national share of European Union (EU) population and national share of EU GDP, equally weighted.WEB,weblink Capital Subscription, European Central Bank, 18 December 2011, The NCBs' shares in this capital are calculated using a key which reflects the respective country's share in the total population and gross domestic product of the EU â€“ in equal weightings. The ECB adjusts the shares every five years and whenever a new country joins the EU. The adjustment is done on the basis of data provided by the European Commission.,


Coins and banknotes

File:Euro coins and banknotes.jpg|left|thumb|Euro coinsEuro coinsFile:Second serie 5, 10, 20, 50 Euro banknotes.jpg|left|thumb|Euro banknotesEuro banknotesThe 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.WEB,weblink How to use the euro name and symbol, European Commission, 7 April 2010, WEB,weblink Spelling of the words "euro" and "cent" in official Community languages as used in Community Legislative acts, 26 November 2008, European Commission, Otherwise, normal English plurals are used,WEB,weblink English Style Guide: A handbook for authors and translators in the European Commission, 16 November 2008, European Commission Directorate-General for Translation, dead,weblink" title="">weblink 5 December 2010, dmy-all, ; WEB,weblink Interinstitutional style guide, 7.3.3. Rules for expressing monetary units, 16 November 2008, European Union, 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 which were members when the euro was introduced. Beginning in 2007 or 2008 (depending on the country) the old map is being replaced by a map of Europe also showing countries outside the Union like Norway, Ukraine, Belarus, Russia or Turkey. The 1-, 2- and 5-cent coins, however, keep their old design, showing a geographical map of Europe with the 15 member states 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.File:New finnish 2013 5 euro.png|thumb|Right|The new banknotes were introduced in the beginning of 2013. The top half of the image shows the front side of the 5 euro note5 euro noteFile:EUR 10 obverse (2014 issue).png|thumb|10 euro note from the new Europa series written in Latin (EURO) and Greek (ΕΥΡΩ) alphabets, but also in the Cyrillic (ЕВРО) alphabet, as a result of BulgariaBulgariaFile:The Europa series 100 € obverse side.jpg|thumb|Right|The design for the new Europa series 100 euro note (and for new 50 and 200 notes) features the acronyms of the name of the European Central BankEuropean Central BankThe 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 IrelandWEB,weblink Ireland to round to nearest 5 cents starting October 28, 27 October 2015, 17 December 2018,weblink" title="">weblink 6 March 2016, dead, dmy-all, WEB,weblink Rounding, Central Bank of Ireland, (by voluntary agreement) and in Finland (by law).WEB, European Commission, European Commission, Euro cash: five and familiar,weblink Europa (web portal), Europa, January 2007, 26 January 2009, This practice is discouraged by the Commission, as is the practice of certain shops of refusing to accept high-value euro notes.Pop, Valentina (22 March 2010) "Commission frowns on shop signs that say: '€500 notes not accepted'", EU ObserverCommemorative 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.WEB,weblink Commission communication: The introduction of euro banknotes and coins one year after COM(2002) 747, 26 January 2009, European Commission, Europa (web portal), 15 February 2003, The design for the euro banknotes has common designs on both sides. The design was created by the Austrian designer Robert Kalina.WEB,weblink Robert Kalina, designer of the euro banknotes, at work at the Oesterreichische Nationalbank in Vienna, European Central Bank, 30 May 2010, Notes are issued in €500, €200, €100, €50, €20, €10, €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 countries 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.NEWS, Schmid, John,weblink Etching the Notes of a New European Identity, International Herald Tribune, 3 August 2001, 29 May 2009,

Payments clearing, electronic funds transfer

Capital within the EU may be transferred in any amount from one country to another. All intra-EU transfers in euro are treated as domestic transactions and bear the corresponding domestic transfer costs.WEB,weblink Regulation (EC) No 2560/2001 of the European Parliament and of the Council of 19 December 2001 on cross-border payments in euro, EUR-lex â€“ European Communities, Publications office, Official Journal L 344, 28 December 2001 P. 0013 â€“ 0016, 26 December 2008, This includes all member states of the EU, even those outside the eurozone providing the transactions are carried out in euro.WEB,weblink Cross border payments in the EU, Euro Information, The Official Treasury Euro Resource, United Kingdom Treasury, 26 December 2008, dead,weblink" title="">weblink 1 December 2008, dmy-all, 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.WEB,weblinkweblink" title="">weblink 21 January 2008, TARGET, European Central Bank, 25 October 2007,

Currency sign

(File:Euro logo plus character.png|thumb|The euro sign; logotype and handwritten)A special euro currency sign (€) was designed after a public survey had narrowed the original ten proposals down to two. The European Commission then chose the design created by the Belgian Alain Billiet. Of the symbol, the EC statedThe European Commission also specified a euro logo with exact proportions and foreground and background colour tones.WEB,weblinkweblink" title="">weblink 11 October 2007, The €uro: Our Currency, European Commission, 25 October 2007, While the Commission intended the logo to be a prescribed glyph shape{{citation needed|date=February 2018}}, font designers made it clear that they intended to design their own variants instead.JOURNAL, Jürgen, Siebert,weblink The Euro: From Logo to Letter, Font Magazine, 2, 2002, Typewriters lacking the euro sign can create it by typing a capital "C", backspacing, and overstriking it with the equal ("=") sign. Placement of the currency sign relative to the numeric amount varies from nation to nation, but for texts in English the symbol (or the ISO-standard "EUR") should precede the amount.WEB,weblink Position of the ISO code or euro sign in amounts, 5 February 2009, Interinstitutional style guide, Europa Publications Office, 10 January 2010, Bruxelles, Belgium,



{{more citations needed|section|date=December 2017}}{{Euro adoption past|group="note"}}The euro was established by the provisions in the 1992 Maastricht Treaty. To participate in the currency, member states are meant to meet strict criteria, such as a budget deficit of less than 3% of their GDP, a debt ratio of less than 60% of GDP (both of which were ultimately widely flouted after introduction), low inflation, and interest rates close to the EU average. In the Maastricht Treaty, the United Kingdom and Denmark were granted exemptions per their request from moving to the stage of monetary union which resulted in the introduction of the euro. (For macroeconomic theory, see below.)The name "euro" was officially adopted in Madrid on 16 December 1995. Belgian Esperantist Germain Pirlot, a former teacher of French and history is credited with naming the new currency by sending a letter to then President of the European Commission, Jacques Santer, suggesting the name "euro" on 4 August 1995.NEWS, Germain Pirlot 'uitvinder' van de euro,weblink De Zeewacht, Dutch, 16 February 2007, 21 May 2012, dead,weblink" title="">weblink 30 June 2013, dmy-all, Due to differences in national conventions for rounding and significant digits, all conversion between the national currencies had to be carried out using the process of triangulation via the euro. The definitive values of one euro in terms of the exchange rates at which the currency entered the euro are shown on the right.The rates were determined by the Council of the European Union,by means of Council Regulation 2866/98 (EC) of 31 December 1998. based on a recommendation from the European Commission based on the market rates on 31 December 1998. They were set so that one European Currency Unit (ECU) would equal one euro. The European Currency Unit was an accounting unit used by the EU, based on the currencies of the member states; it was not a currency in its own right. They could not be set earlier, because the ECU depended on the closing exchange rate of the non-euro currencies (principally the pound sterling) that day.The procedure used to fix the conversion rate between the Greek drachma and the euro was different, since the euro by then was already two years old. While the conversion rates for the initial eleven currencies were determined only hours before the euro was introduced, the conversion rate for the Greek drachma was fixed several months Council Regulation 1478/2000 (EC) of 19 June 2000The currency was introduced in non-physical form (traveller's cheques, electronic transfers, banking, etc.) at midnight on 1 January 1999, when the national currencies of participating countries (the eurozone) ceased to exist independently. Their exchange rates were locked at fixed rates against each other. The euro thus became the successor to the European Currency Unit (ECU). The notes and coins for the old currencies, however, continued to be used as legal tender until new euro notes and coins were introduced on 1 January 2002.The changeover period during which the former currencies' notes and coins were exchanged for those of the euro lasted about two months, until 28 February 2002. The official date on which the national currencies ceased to be legal tender varied from member state to member state. The earliest date was in Germany, where the mark officially ceased to be legal tender on 31 December 2001, though the exchange period lasted for two months more. Even after the old currencies ceased to be legal tender, they continued to be accepted by national central banks for periods ranging from several years to indefinitely (the latter for Austria, Germany, Ireland, Estonia and Latvia in banknotes and coins, and for Belgium, Luxembourg, Slovenia and Slovakia in banknotes only). The earliest coins to become non-convertible were the Portuguese escudos, which ceased to have monetary value after 31 December 2002, although banknotes remain exchangeable until 2022.{{clear}}

Eurozone crisis

{{see also|2008–2011 Icelandic financial crisis}}(File:Government surplus or deficit (EU-USA-UK).png|thumb|Budget deficit of the eurozone compared to the United States and the UK.)Following the U.S. financial crisis in 2008, fears of a sovereign debt crisis developed in 2009 among investors concerning some European states, with the situation becoming particularly tense in early 2010.NEWS,weblink Peripheral euro zone government bond spreads widen, Reuters, George Matlock, 16 February 2010, 28 April 2010, NEWS,weblink Acropolis now, The Economist, 29 April 2010, 22 June 2011, Greece was most acutely affected, but fellow Eurozone members Cyprus, Ireland, Italy, Portugal, and Spain were also significantly affected.European Debt Crisis Fast Facts, CNN Library (last updated 22 January 2017).Ricardo Reis, Looking for a Success in the Euro Crisis Adjustment Programs: The Case of Portugal, Brookings Papers on Economic Activity, Brookings Institution (Fall 2015), p. 433. All these countries utilized EU funds except Italy, which is a major donor to the EFSF.WEB,weblink Efsf, come funziona il fondo salvastati europeo, 4 November 2011, To be included in the eurozone, countries had to fulfil certain convergence criteria, but the meaningfulness of such criteria was diminished by the fact it was not enforced with the same level of strictness among countries.WEB,weblink The politics of the Maastricht convergence criteria,, 15 April 2009, 1 October 2011, According to the Economist Intelligence Unit in 2011, "[I]f the [euro area] is treated as a single entity, its [economic and fiscal] position looks no worse and in some respects, rather better than that of the US or the UK" and the budget deficit for the euro area as a whole is much lower and the euro area's government debt/GDP ratio of 86% in 2010 was about the same level as that of the United States. "Moreover", they write, "private-sector indebtedness across the euro area as a whole is markedly lower than in the highly leveraged Anglo-Saxon economies". The authors conclude that the crisis "is as much political as economic" and the result of the fact that the euro area lacks the support of "institutional paraphernalia (and mutual bonds of solidarity) of a state".WEB,weblink State of the Union: Can the euro zone survive its debt crisis?, 4, Economist Intelligence Unit, 1 March 2011, 1 December 2011, The crisis continued with S&P downgrading the credit rating of nine euro-area countries, including France, then downgrading the entire European Financial Stability Facility (EFSF) fund.NEWS,weblink S&P downgrades euro zone's EFSF bailout fund, 2017-01-16, Reuters, 2017-01-21, A historical parallel â€“ to 1931 when Germany was burdened with debt, unemployment and austerity while France and the United States were relatively strong creditors â€“ gained attention in summer 2012WEB,weblink Euro crisis brings world to brink of depression, Darrell, Delamaide, MarketWatch, 24 July 2012, 24 July 2012, even as Germany received a debt-rating warning of its own.Lindner, Fabian, "Germany would do well to heed the Moody's warning shot", The Guardian, 24 July 2012. Retrieved 25 July 2012.Buergin, Rainer, "Germany, Juncker Push Back After Moody’s Rating Outlook Cuts {{Webarchive|url= |date=28 July 2012 }}",, 24 July 2012. Retrieved 25 July 2012. In the enduring of this scenario the Euro serves as a mean of quantitative primitive accumulation.

Direct and indirect usage

{{Further|Eurozone|International status and usage of the euro|Enlargement of the eurozone}}{{Eurozone labelled map interior}}

Direct usage

The euro is the sole currency of 19 EU member states: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain. These countries constitute the "eurozone", some 343 million people in total {{As of|2018|lc=y}}.WEB,weblink 2013 World Population Data Sheet, Population Reference Bureau, Population Reference Bureau, 2013-10-01, With all but two of the remaining EU members obliged to join, together with future members of the EU, the enlargement of the eurozone is set to continue. Outside the EU, the euro is also the sole currency of Montenegro and Kosovo and several European microstates (Andorra, Monaco, San Marino and the Vatican City) as well as in five overseas territories of EU members that are not themselves part of the EU (Saint Barthélemy, Saint Martin, Saint Pierre and Miquelon, the French Southern and Antarctic Lands and Akrotiri and Dhekelia). Together this direct usage of the euro outside the EU affects nearly 3 million people.The euro has been used as a trading currency in Cuba since 1998,NEWS, Cuba to adopt euro in foreign trade,weblink BBC News, 8 November 1998, 2 January 2008, Syria since 2006,NEWS, US row leads Syria to snub dollar,weblink BBC News, 14 February 2006, 2 January 2008, and Venezuela since 2018.NEWS,weblink Dollars Are Out, Euros Are In as U.S. Sanctions Sting Venezuela, Rosati, Andrew, 17 October 2018, Bloomberg News, Bloomberg, 17 June 2019, Zerpa, Fabiola, There are also various currencies pegged to the euro (see below). In 2009, Zimbabwe abandoned its local currency and used major currencies instead, including the euro and the United States dollar.NEWS, Zimbabwe: A Critical Review of Sterp,weblink 17 April 2009, 30 April 2009,

Use as reserve currency

Since its introduction, the euro has been the second most widely held international reserve currency after the U.S. dollar. The share of the euro as a reserve currency increased from 18% in 1999 to 27% in 2008. Over this period, the share held in U.S. dollar fell from 71% to 64% and that held in RMB fell from 6.4% to 3.3%. The euro inherited and built on the status of the Deutsche Mark as the second most important reserve currency. The euro remains underweight as a reserve currency in advanced economies while overweight in emerging and developing economies: according to the International Monetary FundWEB,weblink Currency Composition of Official Foreign Exchange Reserves (COFER) â€“ Updated COFER tables include first quarter 2009 data. June 30, 2009, 8 July 2009, the total of euro held as a reserve in the world at the end of 2008 was equal to $1.1 trillion or €850 billion, with a share of 22% of all currency reserves in advanced economies, but a total of 31% of all currency reserves in emerging and developing economies.The possibility of the euro becoming the first international reserve currency has been debated among economists.WEB,weblink Will the Euro Eventually Surpass the Dollar As Leading International Reserve Currency?, 17 July 2011, dead,weblink" title="">weblink 25 August 2013, dmy-all, Former US Federal Reserve Chairman Alan Greenspan gave his opinion in September 2007 that it was "absolutely conceivable that the euro will replace the US dollar as reserve currency, or will be traded as an equally important reserve currency".NEWS, Euro could replace dollar as top currency â€“ Greenspan,weblink 17 September 2007, 17 September 2007, Reuters, In contrast to Greenspan's 2007 assessment, the euro's increase in the share of the worldwide currency reserve basket has slowed considerably since 2007 and since the beginning of the worldwide credit crunch related recession and European sovereign-debt crisis.

Currencies pegged to the euro

File:DOLLAR AND EURO IN THE WORLD.svg|thumb|upright=1.35|Worldwide use of the euro and the US dollar:{{Legend|#092D98|Eurozone}}{{Legend|#98b3ff|External adopters of the euro}}{{Legend|#510999|Currencies pegged to the euro}}{{Legend|#CC99FF|Currencies pegged to the euro within narrow band}}{{Legend|#099811|United States}}{{Legend|#99FF9E|External adopters of the US dollar}}{{Legend|#999909|Currencies pegged to the US dollar}}{{Legend|#FFFF99|Currencies pegged to the US dollar within narrow band}}Note: The Belarusian ruble is pegged to the euro, Russian rubleRussian rubleOutside the eurozone, a total of 22 countries and territories that do not belong to the EU have currencies that are directly pegged to the euro including 14 countries in mainland Africa (CFA franc), two African island countries (Comorian franc and Cape Verdean escudo), three French Pacific territories (CFP franc) and three Balkan countries, Bosnia and Herzegovina (Bosnia and Herzegovina convertible mark), Bulgaria (Bulgarian lev) and North Macedonia (Macedonian denar). On 28 July 2009, São Tomé and Príncipe signed an agreement with Portugal which will eventually tie its currency to the euro.NEWS, S.Tomé e Princípe ancora-se ao euro,weblink, 27 July 2009, 8 November 2011, Additionally, the Moroccan dirham is tied to a basket of currencies, including the euro and the US dollar, with the euro given the highest weighting.With the exception of Bosnia, Bulgaria, North Macedonia (which had pegged their currencies against the Deutsche Mark) and Cape Verde (formerly pegged to the Portuguese escudo), all of these non-EU countries had a currency peg to the French Franc before pegging their currencies to the euro. Pegging a country's currency to a major currency is regarded as a safety measure, especially for currencies of areas with weak economies, as the euro is seen as a stable currency, prevents runaway inflation and encourages foreign investment due to its stability.Within the EU several currencies are pegged to the euro, mostly as a precondition to joining the eurozone. The Bulgarian lev was formerly pegged to the Deutsche Mark; one other EU currency with a direct peg due to ERM II is the Danish krone.In total, {{As of|2013|lc=y}}, 182 million people in Africa use a currency pegged to the euro, 27 million people outside the eurozone in Europe, and another 545,000 people on Pacific islands.Since 2005, stamps issued by the Sovereign Military Order of Malta have been denominated in euros, although the Order's official currency remains the Maltese scudoweblink Retrieved 3 October 2017. The Maltese scudo itself is pegged to the euro and is only recognised as legal tender within the Order.


Optimal currency area

{{Further|Optimum currency area}}In economics, an optimum currency area, or region (OCA or OCR), is a geographical region in which it would maximise economic efficiency to have the entire region share a single currency. There are two models, both proposed by Robert Mundell: the stationary expectations model and the international risk sharing model. Mundell himself advocates the international risk sharing model and thus concludes in favour of the euro.A Plan for a European Currency, 1973 by Mundell However, even before the creation of the single currency, there were concerns over diverging economies. Before the late-2000s recession it was considered unlikely that a state would leave the euro or the whole zone would collapse.PAPER, 1014341, The Breakup of the Euro Area by Barry Eichengreen, 14 September 2007, NBER Working Paper No. w13393, However the Greek government-debt crisis led to former British Foreign Secretary Jack Straw claiming the eurozone could not last in its current form.NEWS,weblink Greek debt crisis: Straw says eurozone 'will collapse', BBC, 20 June 2011, 17 July 2011, Part of the problem seems to be the rules that were created when the euro was set up. John Lanchester, writing for The New Yorker, explains it: {{cquote|The guiding principle of the currency, which opened for business in 1999, were supposed to be a set of rules to limit a country's annual deficit to three per cent of gross domestic product, and the total accumulated debt to sixty per cent of G.D.P. It was a nice idea, but by 2004 the two biggest economies in the euro zone, Germany and France, had broken the rules for three years in a row.John Lanchester, "Euro Science," New Yorker, 10 October 2011.}}

Transaction costs and risks

{{Most traded currencies|group="note"}}The most obvious benefit of adopting a single currency is to remove the cost of exchanging currency, theoretically allowing businesses and individuals to consummate previously unprofitable trades. For consumers, banks in the eurozone must charge the same for intra-member cross-border transactions as purely domestic transactions for electronic payments (e.g., credit cards, debit cards and cash machine withdrawals).Financial markets on the continent are expected to be far more liquid and flexible than they were in the past. The reduction in cross-border transaction costs will allow larger banking firms to provide a wider array of banking services that can compete across and beyond the eurozone. However, although transaction costs were reduced, some studies have shown that risk aversion has increased during the last 40 years in the Eurozone.Benchimol, J., 2014. Risk aversion in the Eurozone, Research in Economics, vol. 68, issue 1, pp. 39–56.

Price parity

Another effect of the common European currency is that differences in prices—in particular in price levels—should decrease because of the law of one price. Differences in prices can trigger arbitrage, i.e., speculative trade in a commodity across borders purely to exploit the price differential. Therefore, prices on commonly traded goods are likely to converge, causing inflation in some regions and deflation in others during the transition. Some evidence of this has been observed in specific eurozone markets.JOURNAL, Pinelopi K., Goldberg, Frank, Verboven, Market Integration and Convergence to the Law of One Price: Evidence from the European Car Market, Journal of International Economics, 65, 1, 2005, 49–73, 10.1016/j.jinteco.2003.12.002,

Macroeconomic stability

Before the introduction of the euro, some countries had successfully contained inflation, which was then seen as a major economic problem, by establishing largely independent central banks. One such bank was the Bundesbank in Germany; the European Central Bank was modelled on the Bundesbank.BOOK, The History of the Bundesbank: Lessons for the European Central Bank, de Haan, Jakob, 2000, Routledge, London, 978-0-415-21723-1,weblink The euro has come under criticism due to its imperialistic style regulation, lack of flexibility and rigidity towards sharing member States on issues such as nominal interest rates.JOURNAL, Silvia, Steven J, 2004, Is the Euro Working? The Euro and European Labour Markets, 4007858, 24, 2, 147–168, 10.1017/s0143814x0400008x, Journal of Public Policy, Many national and corporate bonds denominated in euro are significantly more liquid and have lower interest rates than was historically the case when denominated in national currencies. While increased liquidity may lower the nominal interest rate on the bond, denominating the bond in a currency with low levels of inflation arguably plays a much larger role. A credible commitment to low levels of inflation and a stable debt reduces the risk that the value of the debt will be eroded by higher levels of inflation or default in the future, allowing debt to be issued at a lower nominal interest rate.Unfortunately, there is also a cost in structurally keeping inflation lower than in the United States, UK, and China. The result is that seen from those countries, the euro has become expensive, making European products increasingly expensive for its largest importers. Hence export from the euro zone becomes more difficult.In general, those in Europe who own large amounts of euros are served by high stability and low inflation.A monetary union means countries lose the main mechanism of recovery of their international competitiveness by weakening (depreciating) their currency. When wages become too high compared to productivity in exports sector then these exports become more expensive and they are crowded out from the market within a country and abroad. This drive fall of employment and output in exports sector and fall of trade and current account balances. Fall of output and employment in tradable goods sector may be offset by growth of non-exports sectors, especially in construction and services. Increased purchases abroad and negative current account balance can be financed without a problem as long as credit is cheap.WEB, Ernest Pytlarczyk, Stefan Kawalec, Controlled Dismantlement of the Euro Area in Order to Preserve the European Union and Single European Market,weblink CASE Center for Social and Economic Research, 19 December 2018, 11, June 2012, The need to finance trade deficit weakens currency making exports automatically more attractive in a country and abroad. A country in a monetary union cannot use weakening of currency to recover its international competitiveness. To achieve this a country has to reduce prices, including wages (deflation). This means years of high unemployment and lower incomes as it was during European sovereign-debt crisis.JOURNAL, Martin Feldstein, The Failure of the Euro, Foreign Affairs, January–February 2012,weblink Chapter: Trading Places,


A 2009 consensus from the studies of the introduction of the euro concluded that it has increased trade within the eurozone by 5% to 10%,WEB,weblink The euro's trade effects, 2 October 2009, although one study suggested an increase of only 3%WEB,weblink The Euro Effect on Trade is not as Large as Commonly Thought, 2 October 2009, dead,weblink" title="">weblink 24 July 2011, dmy-all, while another estimated 9 to 14%.JOURNAL, 10.1111/j.1467-9396.2007.00725.x, 1079383, Estimating the Euro Effects on Trade with Propensity Score Matching, Review of International Economics, 16, 186–198, 2007, Chintrakarn, Pandej, However, a meta-analysis of all available studies suggests that the prevalence of positive estimates is caused by publication bias and that the underlying effect may be negligible.JOURNAL, Rose effect and the euro: is the magic gone?, Review of World Economics, 10.1007/s10290-010-0050-1, 146, 2, 241–261, 2010, Havránek, Tomáš, Although a more recent meta-analysis shows that publication bias decreases over time and that there are positive trade effects from the introduction of the euro, as long as results from before 2010 are taken into account. This may be because of the inclusion of the Financial crisis of 2007–2008 and ongoing integration within the EU.JOURNAL, Polák, Petr, 2019, The Euro's Trade Effect: A Meta-Analysis, Journal of Economic Surveys, en, 33, 1, 101–124, 10.1111/joes.12264, 1467-6419, Furthermore, older studies accounting for time trend reflecting general cohesion policies in Europe that started before, and continue after implementing the common currency find no effect on trade.WEB, Gomes, Tamara, Graham, Chris, Helliwel, John, Takashi, Kano, Murray, John, Schembri, Lawrence, The Euro and Trade: Is there a Positive Effect?,weblink Bank of Canada, August 2006, dead,weblink" title="">weblink 3 September 2015, dmy-all, JOURNAL, H., Berger, V., Nitsch, Zooming out: The trade effect of the euro in historical perspective, Journal of International Money and Finance, 27, 8, 1244–1260, 10.1016/j.jimonfin.2008.07.005, 2008, These results suggest that other policies aimed at European integration might be the source of observed increase in trade.


Physical investment seems to have increased by 5% in the eurozone due to the introduction.WEB,weblink The Impact of the Euro on Investment: Sectoral Evidence, 2 October 2009, dead,weblink" title="">weblink 31 August 2013, dmy-all, Regarding foreign direct investment, a study found that the intra-eurozone FDI stocks have increased by about 20% during the first four years of the EMU.WEB,weblinkweblink" title="">weblink 10 December 2006, Does the single currency affect FDI?,, 30 May 2010, dead, dmy, Concerning the effect on corporate investment, there is evidence that the introduction of the euro has resulted in an increase in investment rates and that it has made it easier for firms to access financing in Europe. The euro has most specifically stimulated investment in companies that come from countries that previously had weak currencies. A study found that the introduction of the euro accounts for 22% of the investment rate after 1998 in countries that previously had a weak currency.WEB,weblink The Real Effects of the Euro: Evidence from Corporate Investments, 30 May 2010, dead,weblink" title="">weblink 6 July 2011, dmy,


The introduction of the euro has led to extensive discussion about its possible effect on inflation. In the short term, there was a widespread impression in the population of the eurozone that the introduction of the euro had led to an increase in prices, but this impression was not confirmed by general indices of inflation and other studies.JOURNAL, Paolo Angelini, Francesco Lippi, Did Prices Really Soar after the Euro Cash Changeover? Evidence from ATM Withdrawals, International Journal of Central Banking, December 2007,weblink 23 August 2011, WEB,weblink Fünf Jahre nach der Euro-Bargeldeinführung â€“War der Euro wirklich ein Teuro?, Five years after the introduction of euro cash â€“ Did the euro really make things more expensive?, Irmtraud Beuerlein, Statistisches Bundesamt, Wiesbaden, German, 23 August 2011, A study of this paradox found that this was due to an asymmetric effect of the introduction of the euro on prices: while it had no effect on most goods, it had an effect on cheap goods which have seen their price round up after the introduction of the euro. The study found that consumers based their beliefs on inflation of those cheap goods which are frequently purchased.JOURNAL,weblinkweblink" title="">weblink dead, 11 October 2017, The Euro Changeover and Its Effects on Price Transparency and Inflation, 12 November 2010, 10.1111/j.1538-4616.2008.00189.x, 41, Journal of Money, Credit and Banking, 101–129, 2009, Dziuda, Wioletta, Mastrobuoni, Giovanni, It has also been suggested that the jump in small prices may be because prior to the introduction, retailers made fewer upward adjustments and waited for the introduction of the euro to do so.JOURNAL, 10.1162/qjec.121.3.1103, Quarterly Journal of Economics â€“ Abstract, Quarterly Journal of Economics, 121, 3, 1103–1131, 2006, Hobijn, Bart, Ravenna, Federico, Tambalotti, Andrea,weblink

Exchange rate risk

One of the advantages of the adoption of a common currency is the reduction of the risk associated with changes in currency exchange rates. It has been found that the introduction of the euro created "significant reductions in market risk exposures for nonfinancial firms both in and outside Europe".JOURNAL, The impact of the introduction of the Euro on foreign exchange rate risk exposures, Journal of Empirical Finance, 10.1016/j.jempfin.2006.01.002, 13, 4–5, 519–549, 2006, Bartram, Söhnke M., Karolyi, G. Andrew, These reductions in market risk "were concentrated in firms domiciled in the eurozone and in non-euro firms with a high fraction of foreign sales or assets in Europe".

Financial integration

The introduction of the euro seems to have had a strong effect on European financial integration. According to a study on this question, it has "significantly reshaped the European financial system, especially with respect to the securities markets [...] However, the real and policy barriers to integration in the retail and corporate banking sectors remain significant, even if the wholesale end of banking has been largely integrated."WEB,weblink The Euro and Financial Integration, May 2006, 2 October 2009, Specifically, the euro has significantly decreased the cost of trade in bonds, equity, and banking assets within the eurozone.JOURNAL, The geography of asset trade and the euro: Insiders and outsiders, Journal of the Japanese and International Economies, 10.1016/j.jjie.2008.11.001, 23, 2, 90–113, 2009, Coeurdacier, Nicolas, Martin, Philippe, On a global level, there is evidence that the introduction of the euro has led to an integration in terms of investment in bond portfolios, with eurozone countries lending and borrowing more between each other than with other countries.PAPER, 925858, Global Bond Portfolios and EMU, Philip R. Lane, 22 August 2006, IIIS Discussion Paper No. 168,

Effect on interest rates

(File:Long-term interest rates of eurozone countries since 1993.png|thumb|upright=1.35|Secondary market yields of government bonds with maturities of close to 10 years)As of January 2014, and since the introduction of the euro, interest rates of most member countries (particularly those with a weak currency) have decreased. Some of these countries had the most serious sovereign financing problems.The effect of declining interest rates, combined with excess liquidity continually provided by the ECB, made it easier for banks within the countries in which interest rates fell the most, and their linked sovereigns, to borrow significant amounts (above the 3% of GDP budget deficit imposed on the eurozone initially) and significantly inflate their public and private debt levels.WEB,weblink Redwood: The origins of the euro crisis,, 3 June 2011, 16 September 2011, Following the financial crisis of 2007–2008, governments in these countries found it necessary to bail out or nationalise their privately held banks to prevent systemic failure of the banking system when underlying hard or financial asset values were found to be grossly inflated and sometimes so near worthless there was no liquid market for them.WEB,weblink Farewell, Fair-Weather Euro | IP â€“ Global-Edition,, 16 September 2011, dead,weblink" title="">weblink 17 March 2011, This further increased the already high levels of public debt to a level the markets began to consider unsustainable, via increasing government bond interest rates, producing the ongoing European sovereign-debt crisis.

Price convergence

The evidence on the convergence of prices in the eurozone with the introduction of the euro is mixed. Several studies failed to find any evidence of convergence following the introduction of the euro after a phase of convergence in the early 1990s.WEB,weblink Price setting and inflation dynamics: did EMU matter, 13 March 2011, WEB,weblink Price convergence in the EMU? Evidence from micro data, 2 October 2009, Other studies have found evidence of price convergence,WEB,weblink One TV, One Price?, 17 July 2011, WEB,weblink One Market, One Money, One Price?, 17 July 2011, in particular for cars.Gil-Pareja, Salvador, and Simón Sosvilla-Rivero, "Price Convergence in the European Car Market", FEDEA, November 2005. A possible reason for the divergence between the different studies is that the processes of convergence may not have been linear, slowing down substantially between 2000 and 2003, and resurfacing after 2003 as suggested by a recent study (2009).WEB,weblink Ulrich, Fritsche, Sarah, Lein, Sebastian, Weber, Do Prices in the EMU Converge (Non-linearly)?, University of Hamburg, Department Economics and Politics Discussion Papers, Macroeconomics and Finance Series, April 2009, 28 December 2010, dead,weblink" title="">weblink 19 July 2011, dmy-all,


A study suggests that the introduction of the euro has had a positive effect on the amount of tourist travel within the EMU, with an increase of 6.5%.JOURNAL, Gil-Pareja, Salvador, Llorca-Vivero, Rafael, Martínez-Serrano, José, The Effect of EMU on Tourism, 983231, Review of International Economics, 15, 2, 302–312, May 2007, 10.1111/j.1467-9396.2006.00620.x,

Exchange rates

Flexible exchange rates

The ECB targets interest rates rather than exchange rates and in general does not intervene on the foreign exchange rate markets. This is because of the implications of the Mundell–Fleming model, which implies a central bank cannot (without capital controls) maintain interest rate and exchange rate targets simultaneously, because increasing the money supply results in a depreciation of the currency. In the years following the Single European Act, the EU has liberalised its capital markets and, as the ECB has inflation targeting as its monetary policy, the exchange-rate regime of the euro is floating.

Against other major currencies

The euro is the second-most widely held reserve currency after the U.S. dollar. After its introduction on 4 January 1999 its exchange rate against the other major currencies fell reaching its lowest exchange rates in 2000 (3 May vs Pound sterling, 25 October vs the U.S. dollar, 26 October vs Japanese yen). Afterwards it regained and its exchange rate reached its historical highest point in 2008 (15 July vs U.S. dollar, 23 July vs Japanese yen, 29 December vs Pound sterling). With the advent of the global financial crisis the euro initially fell, to regain later. Despite pressure due to the European sovereign-debt crisis the euro remained stable.NEWS, Kirschbaum, Erik, Schaeuble says markets have confidence in euro,weblink 28 March 2018, Reuters, In November 2011 the euro's exchange rate index â€“ measured against currencies of the bloc's major trading partners â€“ was trading almost two percent higher on the year, approximately at the same level as it was before the crisis kicked off in 2007.NEWS,weblink Puzzle over euro's 'mysterious' stability, Reuters, 15 November 2011, {{multiple image| align = center| direction = horizontal| width = 350| footer = Euro exchange rate against U.S. dollar (USD), Pound sterling (GBP) and Japanese yen (JPY), starting from 1999.| image1 = Euro exchange rate to USD.svg| alt1 =| caption1 =| image2 = Euro exchange rate to GBP.svg| alt2 =| caption2 =| image3 = Euro exchange rate to JPY.svg| alt3 =| caption3 =}}
  • Current and historical exchange rates against 32 other currencies (European Central Bank): link
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Linguistic issues

File:EUR 5 obverse (2013 issue).png|thumb|5 euro note from the new Europa series written in Latin (EURO) and Greek (ΕΥΡΩ) alphabets, but also in the Cyrillic (ЕВРО) alphabet, as a result of BulgariaBulgariaThe formal titles of the currency are euro for the major unit and cent for the minor (one-hundredth) unit and for official use in most eurozone languages; according to the ECB, all languages should use the same spelling for the nominative singular.WEB,weblink European Central Bank, Convergence Report, May 2007, The euro is the single currency of the member states that have adopted it. To make this singleness apparent, Community law requires a single spelling of the word euro in the nominative singular case in all community and national legislative provisions, taking into account the existence of different alphabets., 29 December 2008, This may contradict normal rules for word formation in some languages, e.g., those in which there is no eu diphthong. Bulgaria has negotiated an exception; euro in the Bulgarian Cyrillic alphabet is spelled as eвро (evro) and not eуро (euro) in all official documents.NEWS, Elena Koinova,weblink "Evro" Dispute Over â€“ Portuguese Foreign Minister â€“ Bulgaria, The Sofia Echo, 19 October 2007, 17 July 2011, In the Greek script the term ευρώ (evró) is used; the Greek "cent" coins are denominated in λεπτό/ά (leptó/á). Official practice for English-language EU legislation is to use the words euro and cent as both singular and plural,European Commission. "Spelling of the words "euro" and "cent" in official community languages as used in community legislative acts" (PDF). Retrieved 12 January 2009. although the European Commission's Directorate-General for Translation states that the plural forms euros and cents should be used in English.For example, see European Commission, Directorate General for Translation: English Style Guide section 22.9 "The euro. Like 'pound', 'dollar' or any other currency name in English, the word 'euro' is written in lower case with no initial capital and, where appropriate, takes the plural 's' (as does 'cent')." European Commission Directorate-General for Translation â€“ English Style Guide {{webarchive|url= |date=5 December 2010 }}.

See also





Further reading

  • JOURNAL, Taylor, Stephen J., Wang, Yaw-Huei, May 2007, The Euro and European Financial Market Dependence, Journal of Banking and Finance, 51, 5, 1461–1481, 924333, Bartram, Söhnke M.,
  • JOURNAL, Karolyi, G. Andrew, October 2006, The Impact of the Introduction of the Euro on Foreign Exchange Rate Risk Exposures, Journal of Empirical Finance, 13, 4–5, 519–549, 10.1016/j.jempfin.2006.01.002, 299641, Bartram, Söhnke M.,
  • BOOK, Baldwin, Richard, Charles, Wyplosz, The Economics of European Integration, New York, McGraw Hill, 2004, 978-0-07-710394-1,
  • BOOK, Buti, Marco, Servaas, Deroose, Vitor, Gaspar, João, Nogueira Martins, The Euro, Cambridge, Cambridge University Press, 2010, 978-92-79-09842-0,
  • WEB, Jordan, Helmuth, 2010,weblink Fehlschlag Euro, Dorrance Publishing, 28 January 2011,weblink" title="">weblink 16 September 2010, dead, dmy-all,
  • BOOK, Simonazzi, A., Vianello, F., Financial Liberalization, the European Single Currency and the Problem of Unemployment, Franzini, R., Pizzuti, R.F., Globalization, Institutions and Social Cohesion, 2001, Springer, 978-3-540-67741-3,

External links

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