Add to Favorites
Euro
The euro is the official currency used throughout the European Union. It is used within 15 member states. These are known as being the states that form the Eurozone.
These countries are, in alphabetical order, Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovenia and finally Spain!
However, in addition to these countries the euro is also the official currency used in French overseas countries and Portuguese regions as well as the Canary Islands, which are Spanish.
One very interesting aspect of the euro is that it is used in San Marino, Monaco and the Vatican City. But these states, which are known as Micro States actually mint and issue their own euro coins. They undertake this duty instead of the European Central Bank.
Other countries, which are actually outside the auspices of the European Union also use the euro as their official currency. These countries include Montenegro, Andorra, Akrotiri, Kosovo and Dhekelia.
It is also used to act as the peg against which currencies are set. These currencies are used in various countries that were former colonies of states that are now in the European Union. These are namely New Caledonia, French Polynesia, Cape Verde, Wallis and Fortuna, the islands of Comoros as well as a grand total of 14 nations located in central and western Africa.
The money
The euro is subdivided into 100 cents. These are often called eurocents, particularly to distinguish them from other currencies that may also have cents.
The euro is issued in coins in the following denominations, 1 cent, 2 cents, 5 cents , 10 cents , 20 cents, 50 cents 1 euro and 2 euros.
Bank notes are issued in denominations of 5,10, 20, 50, 100, 200 and 500.
The euro is depicted by the symbol €.
Due to the fact that this is a relatively new currency, various anti-counterfeit security features have been incorporated into the euros to try and prevent fraud and fake bank notes coming into circulation.
This has resulted in a currency that is relatively stable and does not suffer a great deal from being counterfeited.
The notes are all of a common design and have the theme of European architecture. However, none of the buildings or gateways represented on the notes actually exist. Rather, they depict conceptual architecture, so that individual countries do not argue about which of their buildings or architectural features should be displayed on the Euros.
Some countries, particularly those that are not as rich as others do not print the €500 note. But as inflation increases, it is likely that this will become more frequently used.
The history of the Euro
The Europe came about as a central part of the Maastricht Treaty. This treaty was signed in 1992 and its purpose was to develop an economic as well as monetary union throughout Europe.
Countries could not automatically join this new economic and monetary union. They could only join once they had shown that they could meet very strict criteria that had been set down in detail within this treaty.
Each country had to demonstrate that it had a budget deficit that was less than 3% of its gross domestic product. The gross domestic product is often referred to by the letters GDP. It is a standard that measures how a country is performing in terms of its income and its output, on a national basis.
The debt ratio of any country wishing to participate in this union, has to be below 60 per cent of the GDP.
Each country also has to demonstrate that it has a low level of inflation and that its interest rates are on a par with the rest of the European Union.
The future of the Euro
As a currency the euro is likely to become ever more prevalent within Europe. States that have joined the European Union since the year 2004 have strict guidelines as to when they ought to join the euro. These countries are Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, and Slovakia.
The timescales for these countries joining the euro varies from 2009 to 2012.
Currently Denmark, Norway, the United Kingdom and Sweden have all opted out of using the euro. Whether these countries can continue to avoid its use for some time to come is relatively unclear. As more and more countries adopt the euro as their official currency, not being a part of this financial system, means that there could be an increased risk of financial isolation.
Ultimately this could result in imports and exports being adversely affected, because exchange duties will be levied and as a result, both imports and exports could become subject to higher and higher duties.
The euro is already a very strong currency and it is one of the world's strongest reserve currencies, on a par with the US dollar. This means that it is a currency which governments and financial institutions hold, as a significant part of their reserves of foreign currency. It is likely that this situation will continue and the euro will simply go from strength to strength.
Acquiring Euros
Euros, by their very nature, are remarkably easy to obtain. Within the Eurozone, it is possible to obtain Euros from any ATM machine, or any bank, or financial institution. Since each country is using the same currency there are no exchange rates to worry about and financial transactions are much quicker, smoother and easy to carry out.
This means that in any country that uses the euro, if you have a bank account in euros, then you will have no problem.
If you are a UK resident, travelling to a European country, then you will need to exchange British sterling for euros.
The easiest way to do this is actually to use an ATM machine whilst you are in that country. You will be able to withdraw funds without any problems, because all the ATM machines are used to foreign cards being used. That being said, if you go to Norway, Sweden, Denmark or Switzerland, then you will find that you don't need to use euros, but you would use the currency of that country.
The joy of the euro is that it is interchangeable and very easy to access. If money is transferred in the form of euros, then it is a simple process and much speedier than in the days when money had to be exchanged and then transferred, all of which took time and effort. And ultimately this cost money. Now there are simply regarded as domestic transfers and as such are much more streamlined and efficient, which undoubtedly helps business and travellers who may be getting money transferred to their accounts, when in another country.
Using your Euros
How much your euros will be able to buy, depends greatly on which country you are in. If you go to countries such as Slovenia then you will find that you are able to get a lot more for your money than you would in other, at more expensive countries such as Luxembourg, Germany or Austria.
Because you can use your euros in any country that has adopted the euro, you no longer have to worry about changing money, as you leave one country and go into another. This makes travelling around Europe much easier than it used to be. Previously, you either had to spend all your money before you left a country. Or you had to change it into another currency and if you had already changed it, you ended up paying exchange fees and could very often lose money on the transaction. Moreover, it was also a time-consuming process that could often be frustrating.
Thus the euro actually makes life significantly easier for people who are either travelling around or who regularly travel between one country and another in Europe. You just use your own currency: end of story.
The fact that some countries which are not actually in the European Union, use the euro means that you can even use the euro when you are not in Europe. So, if you travel to Kosovo or Montenegro, then you don't have to worry about changing money, since the Euros that you have will be legal tender. Maybe one day it will be the global currency, who knows? of
If you are travelling to either Finland or the Netherlands, then you will find that when you buy something, that price is rounded up to the nearest 5 cents, to avoid the use of the 1 cent and 2 cent pieces. This is the legal in both Finland and the Netherlands. It is likely that this may become law in other European countries, eventually resulting in the 1 and 2 cent pieces becoming obsolete and withdrawn from circulation.
The nature of the Euro
Despite the fact that it is very much, the new kid on the block, in terms of currencies, the euro has already shown that it is a strong currency and it is likely to get stronger as time goes on. Already it is being used to link to other currencies and is already presenting itself as a rival to the US dollar in terms of being a currency that is traded and that other countries wish to stockpile in terms of its reserves.
Undoubtedly this will change the position of the United States dollar, which has reigned supreme on global markets for over 100 years.
How America will react to this no one yet knows, but it will have some effect on European and American relations.
Yet for travellers who like to travel extensively, but hate having to pay what can seem like extortionate exchange rate fees, the euro has certainly made life a lot more simple, straightforward and it has to be said, much more cheap. So for that reason alone, many people have embraced the use of the euro, despite reservations that were expressed before its introduction, throughout mainland Europe.
The United Kingdom, has Ireland to one side using the euro and France to the other, who has also embraced this new currency. So for how long can the United Kingdom avoid its use? Or shall we cling to the pound indefinitely, whilst the rest of Europe moves on? Ultimately, only time will tell.
Comment
I have 5100 Greek Drachma that I wish to convert back to pounds sterling. Could
you tell me if this is still possible?
Many thanks
— Claire Medlen · Jul 14, 12:28 PM · #
I’m not sure if you can convert Greek drachma any more since the Euro has been in force for so long. I don’t imagine the Greek drachma is legal tender or acceptable anywhere now. My best guess would be to keep it safe and maybe in a few years from now it will be worth something – but not in terms of monetary value. People do collect old coins and notes so maybe a collector would eventually be interested? You can always ask at a bank or something but I wouldn’t get my hopes up. I doubt they will exchange it.
— Allison · Feb 24, 01:02 PM · #
I am not a particular fan of the Euro but since I have travelled extensively on business in the Eurozone I have come to be more familiar with it. I have used it in several of the Eurozone countries but I still have no particular liking for it. To me it feels like an artificial currency – although I suppose they all are to an extent.
When I used to travel in the pre-Euro days I had the inconvenience of having to change up pounds sterling into the currency of whichever country I was visiting next on business. While the Euro means I don’t have to change currencies quite so often now, I think I would still prefer to go back to the old way of doing things.
— TKL · Jul 28, 09:13 PM · #
I’ve been reading all this news about the possible downfall of the Euro recently. Does anyone know what the latest situation is in this?
I read somewhere that single currencies have been tried before but they have never worked. I think they work when the times are good but perhaps their inherent failings show up whenever they are tested by things like recessions.
There is definitely a lot to focus on in the future months and years as we see how the different countries in the Euro react to the troubles we’ll no doubt see ahead. I just wonder how many people really have faith in the Euro any more? It seems to be weathering the storm a bit at the moment, but I don’t think this is any storm in a teacup.
— Ian · Jul 30, 09:04 PM · #
I think all the news about the potential downfall of the Euro is happening a little too soon – perhaps we shall see its demise in years to come but I think it is made of slightly stronger stuff than some people think. I have no particular liking for it personally, but it won’t disappear overnight. I wish it would sometimes though! Perhaps in ten years or so from now the story will be very different.
— TKL · Sep 29, 08:09 PM · #
I disagree with TKL – I think the Euro has never looked more fragile than it does at the moment. I think secretly some European countries want out of it, but until someone does leave it will be very difficult to see how the whole thing will collapse. I am sure it will though – with everything that has happened it is looking more fragile than ever now. Who agrees with me – who wants to see it go?
— Allison · Dec 20, 09:39 AM · #
The Euro does look fragile and apparently it is currently at its lowest point for more than two months against the British pound alone. And let’s face it the pound isn’t exactly the strongest currency out there either (I live in the UK so I should be biased!). I think the Euro is on its last legs – it just doesn’t know it yet. We will be seeing the back of it before too long I am sure.
— Ian · May 30, 09:13 AM · #
Well we still have it over there in Europe but I wonder just how long for? All I am reading about at the moment is a series of countries that are having their credit ratings downgraded. Furthermore the politicians are dithering as usual and I cannot see any other outcome than for the Euro to disappear eventually. I just wonder how long we will have to wait for it to happen. I suspect not long.
— AHews · Nov 27, 08:15 PM · #