Euro

The euro (symbol: €; currency code: EUR) is the official currency used by 21 of the 27 member states of the European Union. These countries are known as the euro area or the eurozone. The euro is divided into 100 euro cents.

Besides the eurozone countries, the euro is also used by the institutions of the European Union, four European microstates that are not EU members, one British Overseas Territory, and two other European states. Some special areas of EU member countries also use the euro.

Over 350 million people use the euro every day. It is also the second-most traded currency in the world after the United States dollar. The name euro was officially chosen on 16 December 1995 in Madrid. The euro began as an accounting currency on 1 January 1999 and started being used as real money on 1 January 2002.

Characteristics

Administration

The euro is looked after by the European Central Bank and the Eurosystem, which includes the banks of the eurozone countries. The ECB decides on important money rules, like interest rates. The Eurosystem helps make and send out euro banknotes and coins for all the countries that use the euro.

Many countries in the European Union agreed to use the euro when they met certain financial goals. Denmark has special rules, and Sweden chose not to use the euro in a vote in 2003. Countries that joined the EU after 1993 have promised to use the euro later. The rules were updated with the Treaty of Nice in 2001.

Countries that use the euro

The euro is used by 44 different countries and areas. These include both members of a group called the eurozone and some places that are not part of this group but still use the euro.

Eurozone members

The 21 members that use the euro as their main money are:

• Austria
• Belgium
• Bulgaria
• Croatia
• Cyprus
• Estonia
• Finland
• France
• Germany
• Greece
• Ireland
• Italy
• Latvia
• Lithuania
• Luxembourg
• Malta
• Netherlands
• Portugal
• Slovakia
• Slovenia
• Spain

Special territories of members of the European Economic Area

Main article: Special territories of members of the European Economic Area

Some special areas of European countries also use the euro. These include places like French Guiana, Guadeloupe, and the Azores.

Other users

Some smaller places and territories also use the euro, even if they are not part of the eurozone. These include Andorra, Monaco, and Kosovo.

EU members not using the euro

Main articles: Enlargement of the eurozone and Currencies of the European Union

See also: Czech Republic and the euro, Hungary and the euro, Poland and the euro, Romania and the euro, and Sweden and the euro

Some European Union countries have promised to use the euro as their money in the future, but they don't have to do it right away. These countries are:

• Czech Republic
• Hungary
• Poland
• Romania
• Sweden

See also: Denmark and the euro and United Kingdom and the euro

Two countries, Denmark and the United Kingdom, have special rules that let them keep their own money. Denmark can keep using the Danish krone, and the United Kingdom kept using the pound sterling before it left the European Union in 2020.

Coins and banknotes

Coins

See also: List of Euro coin series and Identifying marks on euro coins

The euro is divided into 100 cents, also called euro cents. All coins have one side that shows the value and a map. The coins come in different values: €2, €1, 50c, 20c, 10c, 5c, 2c, and 1c. Some places round up or down to the nearest five cents to avoid using the smallest coins.

Banknotes

Euro banknotes come in different colors and values: €500, €200, €100, €50, €20, €10, and €5. Each banknote has a special color and shows pictures of windows and bridges, which stand for connections between countries.

The newer set of banknotes no longer includes the €500 note. Both the old and new banknotes are still used.

In December 2021, plans were announced to create a new design for euro banknotes by 2024.

Payments clearing, electronic funds transfer

Main article: Single Euro Payments Area

Money can be sent between any countries in the EU with no extra fees for using euros. Credit and debit card payments within the eurozone are also treated the same as local transactions.

History

Main article: History of the euro

The euro was created because of rules set in 1992. To use the euro, countries needed to follow certain rules about their money and economy. The name "euro" was chosen in 1995.

The euro started being used for things like bank accounts and electronic payments on January 1, 1999. Real euro coins and notes were introduced later, on January 1, 2002. People could still use their old money for a little while after that.

Currency sign

A special symbol for the euro (€) was designed after people voted for their favorite. The symbol looks like the letter "E" with two lines through it, showing that the euro is stable.

Eurozone crisis

See also: 2008–2011 Icelandic financial crisis

After a big problem with money in 2008, some countries that use the euro had trouble paying their debts. This was especially hard for Greece, but it also affected Cyprus, Ireland, Italy, Portugal, and Spain. These countries got help from EU funds, except Italy. The crisis showed that the euro area needed stronger rules and support to work well together.

Direct and indirect usage

The euro is the main money used by 21 countries in the European Union. These countries are known as the eurozone and have about 347 million people. The euro is also the official money in four small European countries because of special agreements with the European Union. Other countries that are not part of the European Union also use the euro, either by choice or because they have agreed to use it.

Many other countries tie their money to the euro. This means that the value of their money changes only a little compared to the euro. This helps these countries keep their economies stable and encourages trade with other countries that use the euro. Some of these countries include Bosnia and Herzegovina, Cape Verde, Comoros, and several countries in Africa and the Pacific.

Economics

Optimal currency area

Further information: Optimum currency area

In simple terms, an optimum currency area is a place where it makes sense for everyone to use the same money. There are two ways to think about this, both suggested by Robert Mundell. He likes one way better, which says the euro is a good idea. But even before the euro started, some people worried that countries' economies were different. Before a big problem in the late 2000s, most thought a country would not leave the euro or that the whole group might not fall apart. But a big money problem in Greece made some people, like a former British leader named Jack Straw, say the euro might not last as it was.

Transaction costs and risks

One big good thing about having one money for many countries is that it costs less to trade. Before the euro, people and businesses had to pay to change money when they bought things from other countries. Now, banks in the eurozone charge the same for sending money between countries as they do inside one country.

Price parity

With one money, prices should get closer together. This means things should cost about the same in different places. If prices are different, people might buy from the cheaper place, which can change prices over time.

Macroeconomic stability

Before the euro, some countries kept prices from going up too fast by having their own banks control money. Germany had a strong bank called the Bundesbank, and the European Central Bank was made to work like it.

Trade

The euro made it easier to see prices and helped people trade more with each other. Studies show trade went up by a little, but it's not clear if this was just because of the euro or other rules helping Europe work together.

Investment

Having one money helped people invest more. Companies could get money more easily, especially in countries that used to have weaker money.

Inflation

When the euro started, many people thought prices went up, but this was not true for most things. It mainly seemed to happen with cheap things that people buy often.

Exchange rate risk

With one money, there is less risk that the value of money will change when people trade with each other. This helped companies, especially in Europe, to feel safer when they bought and sold things.

Financial integration

The euro helped Europe work together more in money matters. It became cheaper for companies to borrow money, and people could invest more easily in other countries.

Effect on interest rates

Since the euro started, the cost of borrowing money went down in many countries. But after a big money problem in 2008, some countries borrowed too much and had to help their banks, which made their debt very big.

Price convergence

It's not clear if prices got closer together after the euro started. Some studies say yes, some say no. It might have taken time to see any big changes.

Tourism

The euro seems to have made it easier for people to travel inside Europe, with more people visiting different countries.

Exchange rates

The European Central Bank focuses on controlling inflation and usually does not try to change the value of the euro compared to other currencies. This is because trying to control both interest rates and exchange rates at the same time is very difficult.

The euro is the second most commonly used currency in the world after the U.S. dollar. When it was introduced on January 4, 1999, its value went down against other major currencies like the British pound, U.S. dollar, and Japanese yen. It later went back up and reached its highest points in 2008. Even during financial troubles, the euro stayed fairly stable. In July 2022, the euro and the U.S. dollar were worth the same for a short time. By April 17, 2026, the euro had reached its highest value ever against the Japanese yen.

Political considerations

Besides helping the economy, the euro was also created to help Europeans feel more connected to each other. Leaders like the European Central Bank Governor in 1998, the French Finance Minister in 2000, and the President of the European Commission in 2002 talked about this idea. But even 15 years later, a study showed that the euro didn’t really make people feel more connected.

Public support for the euro in different EU countries, according to a poll in 2025:

Eurozone

Countries not using the euro

Euro in various official EU languages

Main article: Language and the euro

The euro is the main unit of money, and cent is the smaller unit, equal to one-hundredth of a euro. Most languages in the eurozone use these same words for official purposes.

In English, we use "euro" and "cent" for both singular and plural, like saying "one euro" or "two euros". Bulgaria uses a special spelling for the euro in its alphabet: eвро (evro). Greece uses the word ευρώ (evró) for euro and λεπτό/ά (leptó/á) for cent. Bulgaria also has its own word for cent: стотинка/и (stotìnka/i). The way people say "euro" changes depending on their language's pronunciation rules.

For more details on how amounts are written and said in different languages, see Language and the euro.