Euro Definition, History, Symbol, & Facts

The official date on which the national currencies ceased to be legal tender varied from member state to member state. The earliest date was in Germany, where the mark officially ceased to be legal tender on 31 December 2001, though the exchange period lasted for two months more. Even after the old currencies ceased to be legal tender, they continued to be accepted by national central banks for periods ranging from several years to indefinitely (the latter for Austria, Germany, Ireland, Estonia and Latvia in banknotes and coins, and for Belgium, Luxembourg, Slovenia and Slovakia in banknotes only). The earliest coins to become non-convertible were the Portuguese escudos, which ceased to have monetary value after 31 December 2002, although banknotes remained exchangeable until 2022. Unlike most of the national currencies that they replaced, euro banknotes do not display famous national figures.

For the denominations except the 1-, 2- and 5-cent coins, the map only showed the 15 member states of the union as of 2002. Beginning in 2007 or 2008 (depending on the country), the old map was replaced by a map of Europe also showing countries outside the EU.[35] The 1-, 2- and 5-cent coins, however, keep their old design, https://www.topforexnews.org/news/jim-rickards-economic-collapse-is-predicted-in/ showing a geographical map of Europe with the EU member states as of 2002, raised somewhat above the rest of the map. The coins also have a national side showing an image specifically chosen by the country that issued the coin. Euro coins from any member state may be freely used in any nation that has adopted the euro.

1. They could not be set earlier, because the ECU depended on the closing exchange rate of the non-euro currencies (principally pound sterling) that day.
2. Some of these countries had the most serious sovereign financing problems.
3. The currency was introduced in non-physical form (traveller’s cheques, electronic transfers, banking, etc.) at midnight on 1 January 1999, when the national currencies of participating countries (the eurozone) ceased to exist independently.
4. Due to the linguistic plurality in the European Union, the Latin alphabet version of euro is used (as opposed to the less common Greek or Cyrillic) and Arabic numerals (other text is used on national sides in national languages, but other text on the common side is avoided).
5. The euro is the official currency of 20 European Union countries which collectively make up the euro area, also known as the eurozone.

The precise dates that each old currency ceased being legal tender and their official fixed rates are shown in the table below. Since 2005, stamps issued by the Sovereign Military Order of Malta have been denominated in euros, although the Order’s official currency remains the Maltese scudo.[74] The Maltese scudo itself is pegged to the euro and is only recognised as legal tender within the Order. These private and business transactions are still subject to taxation law, business law, anti-money laundering law and other general commodity trade rules. However, currencies which are not official within the euro area, are not governed by monetary law.

Spelling and CapitalizationThe official spelling of the EUR currency unit is “euro”, with a lower case “e”; however, the common industry practice is to spell it “Euro”, with a capital “E”. Many languages have different official spellings for the Euro, which also may or may not coincide with general use. Additionally, there are various nicknames for the currency including, Ege (Finnish), Pavo (Spanish), and Euráče (Slovak). Our currency rankings show that the most popular Euro exchange rate is the EUR to USD rate. In the absence of a specific agreement concerning the means of payment, creditors are obliged to accept payment in euros. Our currency rankings show that the most popular US Dollar exchange rate is the USD to USD rate.

They could not be set earlier, because the ECU depended on the closing exchange rate of the non-euro currencies (principally pound sterling) that day. All circulating coins have a common side showing the denomination or value, and a map in the background. Due to the linguistic plurality in the European Union, the Latin alphabet version of euro is used (as opposed to the less common Greek or Cyrillic) and Arabic numerals (other text is used on national sides in national languages, but other text on the common side is avoided).

Payments clearing, electronic funds transfer

The euro was established by the provisions in the 1992 Maastricht Treaty. To participate in the currency, member states are meant to meet strict criteria, such as a budget deficit of less than 3% of their GDP, a debt ratio of less than 60% of GDP (both of which were ultimately widely flouted after introduction), low inflation, and interest rates close to the EU average. 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. Value of Obsolete National CurrenciesEuro bank notes and coins began circulating in 2002 with old notes and coins gradually being withdrawn from circulation.

The most obvious benefit of adopting a single currency is to remove the cost of exchanging currency, theoretically allowing businesses and individuals to consummate previously unprofitable trades. 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). These countries generally had previously implemented a currency peg to one of the major European currencies (e.g. the French franc, Deutsche Mark or Portuguese escudo), and when these currencies were replaced by the euro their currencies became pegged to the euro.

Britain and Sweden delayed joining, though some businesses in Britain decided to accept payment in euros. Voters in Denmark narrowly rejected the euro in a September 2000 referendum. Greece initially failed to meet the economic requirements but was admitted in January 2001 after overhauling its economy. While increased liquidity may lower the nominal interest rate on the bond, denominating the bond bearish market financial definition of bearish market in a currency with low levels of inflation arguably plays a much larger role. A credible commitment to low levels of inflation and a stable debt reduces the risk that the value of the debt will be eroded by higher levels of inflation or default in the future, allowing debt to be issued at a lower nominal interest rate. In 2007 Slovenia became the first former communist country to adopt the euro.

Official EU currency

These are the average exchange rates of these two currencies for the last 30 and 90 days. As of January 2014, and since the introduction of the euro, interest rates https://www.day-trading.info/how-do-municipal-bonds-work-and-how-do-you/ of most member countries (particularly those with a weak currency) have decreased. Some of these countries had the most serious sovereign financing problems.

Obliged to adopt the euro

Parties may also agree to transactions using other official foreign currencies (e.g. the US dollar). They may also agree to use privately issued ‘money’ like local exchange trading systems (e.g. voucher-based payment systems) or virtual currencies (e.g. Bitcoin). The U.S. dollar is the currency most used in international transactions.

Popular Euro (EUR) Currency Pairings

Having demonstrated fiscal stability since joining the EU in 2004, both Malta and the Greek Cypriot sector of Cyprus adopted the euro in 2008. Other countries that adopted the currency include Slovakia (2009), Estonia (2011), Latvia (2014), Lithuania (2015), and Croatia (2023). (The euro is also the official currency in several areas outside the EU, including Andorra, Montenegro, Kosovo, and San Marino.) The 20 participating EU countries are known as the euro area, euroland, or the euro zone.