European Union Euro

• UNION: European Union
• Currency: euro
• AKA: EU euro
• ISO 4217 CODES: EUR/978
• Symbol: €

The introduction of the euro in 1999 represents one of the most profound changes in the history of global currency. Twelve European Union members have adopted the euro as their national currency, and as the Union continues to grow, additional countries will be joining the euro system in coming years. Euro notes and coins were first introduced into circulation in 2002, and many international banks suddenly lost significant revenue streams previously derived from exchanging currencies. Many non-European currencies that were previously pegged to the individual currencies of EU members are now pegged to the euro.

Background of the Euro

Initially conceived in 1992 under the terms of the Maastricht Treaty on European Union, the euro was intended to facilitate trade between member nations while also stabilizing Western Europe’s economy. The charter members of the union are Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. Membership in the EU has since grown to 25 members, several of which have already initiated the process of conversion to the euro by adopting the Exchange Rate Mechanism (ERM) II.

The euro was formally introduced as a currency on January 1, 1999, but actual notes and coins weren’t put into circulation until January 1, 2002. The implementation of the euro essentially relegated 11 different national currencies to the history books. Since its introduction, the euro has gained widespread acceptance in Europe, and several non-EU countries also accept the euro for payments.

However, there are still some detractors to the euro. Even though the United Kingdom is a member of the EU, it has steadfastly held on to the pound sterling as its national currency. Likewise, countries such as Sweden, Denmark and Switzerland have remained at arm’s length from full participation if the euro system.

The actual euro symbol is a stylized representation of a “C” superimposed with the letter “E.” It is derived from a monetary concept called the European Currency Unit which, while it was never a real form of currency, served as the framework for creation of the euro.

The euro is divided into 100 cents. Denominations for coins are 1c, 2c, 5c, 10c, 20c, 50c, €1, and €2. Euro coins are customized to reflect the country in which they were minted, but are valid for use in all EU countries. Denominations for banknotes are €5, €10, €20, €50, €100, €200 and €500.