WCURRENCY

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Overview

The Euro (EUR, €) is the official currency of the Eurozone — 20 of the 27 European Union member states. It is the second most traded currency in the world after the US dollar and the second largest reserve currency, accounting for roughly 20% of global foreign exchange reserves. More than 340 million people use the euro as their daily currency.

History

The euro was introduced as an accounting currency on 1 January 1999, when 11 EU member states fixed their exchange rates to it. Banknotes and coins entered circulation on 1 January 2002, replacing national currencies such as the German Mark, French Franc, Italian Lira, and Spanish Peseta in one of the largest currency transitions in history.

The concept arose from the Maastricht Treaty (1992), which laid out convergence criteria countries had to meet. Today the Eurozone encompasses 20 countries.

European Central Bank

The European Central Bank (ECB), headquartered in Frankfurt, Germany, is solely responsible for Eurozone monetary policy. Unlike the US Fed, the ECB has a single mandate: price stability, targeting inflation close to 2% over the medium term. The ECB's Governing Council meets approximately every six weeks to set interest rates, which directly influence borrowing costs and EUR exchange rates globally.

Key Facts

• The euro is used by over 340 million people across 20 countries — the Eurozone is the world's second largest economy.
• Euro banknotes feature fictional composite bridges to avoid favouring any one country.
• The €500 note was discontinued for new issuance in 2019.
• Vatican City, Monaco, San Marino, and Andorra use the euro despite not being EU members.
• The € symbol was inspired by the Greek letter epsilon (ε) and E for Europe; the two parallel lines symbolise stability.
• EUR/USD is the world's most traded forex pair (≈23% of daily global volume).

See also: USD – United States Dollar · GBP – British Pound Sterling · Guide