The euro (symbol: €; code: EUR) is the official currency of the European Union, for 19 out of the 27 member states. The euro is a popularly traded currency on the foreign exchange (or forex) market, second only to the US dollar (USD). The group or European countries (or member states) that converted from their local currency to the euro are known as the eurozone. Like the USD, the euro is divided into 100 cents. Euro bank note denominations are €5, €10, €20, €50, €100, €200 and €500. Euro coins are available in denominations of 1c, 2c, 5c, 10c, 20c, 50c, €1 and €2.
Currency Exchange Rates
The euro is the second-most traded currency and widely held reserve currency after the U.S. dollar. The euro is traded openly in the foreign exchange market.
The euro was introduced on January 1, 1999 as a non-cash monetary unit. Currency notes and coins first appeared in eurozone countries on January 1, 2002. Soon thereafter, eurozone member countries began to phase out their legacy currency and replace it with the euro.
Initially after its introduction as a non-cash monetary unit in 1999, the euro traded below the US dollar until the 2002. In the 20 years that followed the euro traded above the US dollar (USD), peaking at US$1.60 in July 2008, during a U.S. economic crisis. On July 13, 2022, during the Russian invasion of Ukraine, the euro and the dollar hit parity for the first time in nearly two decades.
Eurozone countries have the European Central Bank (ECB) as their central bank. The ECB sets economic and monetary policies for all nations in the eurozone. Individual states cannot craft policies tailored to their own conditions. Because the Euro is centrally regulated, this common currency can bring advantages and stability to the member states in the eurozone. However, there is a chance that an economic policy could be put in place that benefits one country, but not another. These are some of the reasons why not all member states of the European Union have adopted the Euro and eight member states continue to maintain their local currency.
EU countries using the euro
The 19 European member states that use the euro today officially phased out their legacy currencies at different times. Ireland and France were among the first two countries to phase out their legacy currency in early February 2002, followed by Austria, Belgium, Germany, Greece, Italy, Luxembourg, Portugal and Spain later that month. Another burst of countries phased out their legacy currencies in favor of the Euro about 5 years later, which included Cyprus, Finland, Malta, Netherlands, Slovenia and Slovakia. The last three eurozone countries to replace their legacy currency for the euro were Estonia, Latvia and Lithuania.
When the euro is introduced to a new country, old notes and coins are gradually withdrawn from circulation. The table below lists each eurozone member along with their former currency, the year the European member state converted its currency to the euro and the conversion rate for the legacy currency to euro at the time it was phased out.
EU countries not using the euro
The eight members of the European Union that have not adopted the euro to date are Bulgaria, Croatia, Czech Republic, Denmark, Hungary, Poland, Romania, and Sweden. The Table below lists the ISO codes and currency names of the currencies being used by these countries.
With Koverly’s foreign exchange platform enables you to pay these countries in their local currency. The Koverly currency converter provides current real-time currency conversion rates from USD to these local currencies.
Member of the European Union that do not use the Euro and the local currencies in circulation are:
Non-EU countries using the euro
Several independent states that are not part of the European Union accept the euro as currency. Although the countries are not part of the EU, the people living in these states use the euro as their official currency as the country has signed monetary agreements with the European Union.
Non-EU states that use the euro as their currency, include: