The areas the use the euro as currency are in an economic and monetary union called the eurozone. 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. 3 character alphabetic and 3 digit numeric ISO 4217 codes for each country. EU is the official user of the Euro currency. A single currency offers many advantages: it The share of the euro as a reserve currency increased from 18% in 1999 to 27% in 2008. Financial markets on the continent are expected to be far more liquid and flexible than they were in the past. 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. All common sides were designed by Luc Luycx. The euro accounts for the majority of the member states with the remainder operating independent monetary policies. The euro has most specifically stimulated investment in companies that come from countries that previously had weak currencies. Despite pressure due to the European sovereign-debt crisis the euro remained stable. ", "S&P downgrades euro zone's EFSF bailout fund", "Euro crisis brings world to brink of depression", Germany would do well to heed the Moody's warning shot, Germany, Juncker Push Back After Moody’s Rating Outlook Cuts, "Dollars Are Out, Euros Are In as U.S. Sanctions Sting Venezuela", "Currency Composition of Official Foreign Exchange Reserves (COFER) – Updated COFER tables include first quarter 2009 data. 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. [2] The relationship between euro and non-euro states has been on debate both during the UK's membership (as a large opt-out state) and in light of withdrawal from the EU and how that impacts the balance of power between the countries inside and those outside the eurozone, avoiding a eurozone caucus out-voting non-euro states. Outside 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). Euro is the second most held international reserve currency after U.S.dollar with €850 billion as of 2008. In 1995, it became the official name of the currency, and the European Council chose the symbol €. Other common names for the Euro include Yoyo (Irish English), Leru (Spanish), and Ege (Finnish). [65] 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.[63]. [107], Besides the economic motivations to the introduction of the euro, its creation was also partly justified as a way to foster a closer sense of joint identity between European citizens. With all but one (Denmark) of the remaining EU members obliged to join when economic conditions permit, together with future members of the EU, the enlargement of the eurozone is set to continue. 0 0. just me. Increased purchases abroad and negative current account balance can be financed without a problem as long as credit is cheap. [53], 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.[54]. As an independent central bank, the ECB has sole authority to set monetary policy. One of the advantages of the adoption of a common currency is the reduction of the risk associated with changes in currency exchange rates. The following are official and unofficial currencies used within the borders of the 27 EU Member states: Swiss franc is the official currency and euro is widely accepted. The name * franc * almost certainly derives from the original Latin inscription on the coin, FRANCORUM REX , ‘King of the Franks’. Europe Currency Name. [74], 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. ", "The Euro's Trade Effect: A Meta-Analysis", "The Euro and Trade: Is there a Positive Effect? Afghanistan / Afghan Afghani [ ؋] 2. Totally there are 31 different currencies in circulation within Europe. But this is possible only if a candidate is completely prepared. [68] However, even before the creation of the single currency, there were concerns over diverging economies. Those European Union states that have adopted it are known as the eurozone and share the European Central Bank (ECB). Currency converter uses cross rates to deliver other currencies values, which means you can calculate the values of the EUR (Euro) and USD (United States Dollar) to any other currency. Akrotiri and Dhekelia / European Euro [ € ] 3. 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. Retrieved 12 January 2009. [89][90] 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. These coins are legal tender throughout the eurozone. [51] 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. Former member UK had called for the EU treaties to recognise the EU as a "multicurrency union", which sparked concerns about undermining euro adoption in remaining countries. 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. The. "Moreover", they write, "private-sector indebtedness across the euro area as a whole is markedly lower than in the highly leveraged Anglo-Saxon economies". 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 other uses, see, "EUR" and "Euros" redirect here. 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.[21][22]. 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. 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. Once upon a time, each European country had its own currency. The euro thus became the successor to the European Currency Unit (ECU). Each banknote has its own colour and is dedicated to an artistic period of European architecture. This name generator will give you 10 random names for fictional currencies. [83] 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. Euro is the second most held international reserve currency after U.S.dollar with €850 billion as of 2008. Within the EU several currencies are pegged to the euro, mostly as a precondition to joining the eurozone. 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. In January 2007, Slovakia became the 13th state to adopt the euro. The currency symbol of the German money is €. The Danish krone, Croatian kuna and Bulgarian lev are pegged due to their participation in the ERM II. and "stg." It is the second-most traded currency on the forex market, after the US Dollar, and also a major global reserve currency. With the advent of the global financial crisis the euro initially fell, to regain later. Some of these countries had the most serious sovereign financing problems. The Swiss Franc is the only ‘Franc’ currency in Europe still in use today. The European Commission then chose the design created by the Belgian Alain Billiet. Euro coins from any member state may be freely used in any nation that has adopted the euro. [37], The Europa series, or second series, consists of six denominations and does no longer include the €500 with issuance discontinued as of 27 April 2019. Outside Europe, a number of special territories of EU members also use the euro as their currency. All nations that have joined the EU since 1993 have pledged to adopt the euro in due course. In general, those in Europe who own large amounts of euros are served by high stability and low inflation. The franc was the currency of France, Belgium and Luxembourg until the introduction of the Euro in 2002. Dependencies and unrecognized countries don’t have their own currency and officially use the foreign currency symbols also listed here. All intra-Union transfers in euro are treated as domestic transactions and bear the corresponding domestic transfer costs. [42], A special euro currency sign (€) was designed after a public survey had narrowed the original ten proposals down to two. The circulation of banknotes and coins is highest in the world, has surpassed the U.S.dollar as of 2018, with over €1.2 trillion. archaeology [remove] 42; Media available. Portugal was among the first 11 member states who adopted the euro. [3] The euro inherited and built on the status of the Deutsche Mark as the second most important reserve currency. ", "Schaeuble says markets have confidence in euro", "Puzzle over euro's 'mysterious' stability", "Can a common currency foster a shared social identity across different nations? Since 1 January 2002, the national central banks (NCBs) and the ECB have issued euro banknotes on a joint basis. Their exchange rates were locked at fixed rates against each other. One such bank was the Bundesbank in Germany; the European Central Bank was modelled on the Bundesbank.[75]. Below, you’ll find a table of the countries in the eurozone, including the name of the country’s currency before it adopted the euro and the date that each country joined the eurozone. 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). 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). The euro thus became the successor to the European Currency Unit (ECU). The dominance of the Euro is clearly observed, now the 27 independent countries and dependent territories use it as the legal tender. [23] 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). 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. [64] Former 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". However, although transaction costs were reduced, some studies have shown that risk aversion has increased during the last 40 years in the Eurozone. European Commission. The ECB targets interest rates rather than exchange rates and in general, does not intervene on the foreign exchange rate markets. legacy documentation 42; image 41; Collection place. 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). Except for the one state with an opt out, all current and future members of the EU are obliged to adopt the Euro as their currency, thus replacing their current ones. Replaced alongside French franc with euro, Replaced alongside Italian lira with euro, widely used by other states outside the EU, "Gross domestic product at market prices", UK call for ‘multicurrency’ EU triggers ECB alarm, What a fair relationship between ‘euro ins’ and ‘euro outs’ could look like, Economic and Monetary Union of the European Union, European Financial Stabilisation Mechanism, Economic and Financial Affairs Commissioner, https://en.wikipedia.org/w/index.php?title=Currencies_of_the_European_Union&oldid=998106964, Articles containing potentially dated statements from 2020, All articles containing potentially dated statements, Pages using collapsible list with both background and text-align in titlestyle, Creative Commons Attribution-ShareAlike License, This page was last edited on 3 January 2021, at 21:15. 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