The Euro is the official currency of the member nations of the European Union (EU). It was introduced by the EU in 1999, and it was initially adopted by 11 European nations, including Luxembourg, Belgium, Ireland, Spain, Italy, Austria, Finland, France, Germany, Netherlands, and Portugal. The Euro is managed by the European System of Central Banks, or ECB, and it is represented by the abbreviation “EUR” and the symbol “€”.
Before the advent of the Euro, several nations in Europe felt that they needed a common currency to help promote tourism, cross-border trade between countries of the continent, as well as worldwide trade. Furthermore, a single currency would assist companies in cutting costs and increase the efficiency of the banking system as well. The name “Euro” was adopted in 1995, and in 1998, a number of European countries converted their currencies to Euro by meeting certain economic criteria that were authorized by the European Commission. On the 1st of January, 1999, the Euro debuted as the European Monetary Union’s common currency, replacing the European Currency Unit (ECU). The Euro coins and currencies were circulated from the 1st of January, 2002, and it quickly replaced the national currencies of the EU member nations.
Presently, 16 of the 27 European Union member nations have adopted the Euro: Germany, France, Italy, Netherlands, Spain, Austria, Portugal, Belgium, Ireland, Greece, Luxembourg, Finland, Cyprus, Malta, Slovenia, and Slovakia. These nations are collectively called the Eurozone. It is estimated that 350 million Europeans use the Euro daily. Additionally, more than 150 million Africans use currencies that are closely related to the Euro. The Euro notes have seven denominations, which are the 5, 10, 20, 50,100, 200, and 500 € notes. Each of these notes has its own distinct color and design, which is dedicated to a particular European architectural period. The coins, on the other hand, have 8 denominations, ranging from 1 cent to 2 Euros. The Euro coins feature a national side, which depicts an image that is specifically selected by the country of issue. Interestingly, Euro coins belonging to one EU country can be used in any EU member country that uses the Euro. This means that you can use a Euro coin issued by Germany to obtain a global phone in Italy.
The European Central Bank is based in Frankfurt, and it manages the Euro system. The minting, distribution, and printing of Euro notes and coins are primarily managed by the Eurosystem, which is made up of all the central banks of the EU countries. Like all major currencies, the Euro has its share of pros and cons. One of its advantages is that it is able to remove the risks of exchange rates for businesses and financial institutions. On the other hand, some critics point out that the Euro system gives more power to the European Central Bank to set up monetary policies, and this reduces the role of EU member nations in implementing country-specific monetary policies. The current conversion rate of 1 Euro in US dollars is 1.3969. For Australian dollar it is 1.7209, for Singapore Dollar its 2.0296, and for Canadian Dollar, it is 1.54281.
By the end of 2008, approximately €751 billion was in circulation. Presently, the Euro is the second most traded and the second largest reserve currency in the world, just behind the US dollar. Also, the International Monetary Fund has declared the Eurozone as the world’s second largest economy.
