What is the Euro?

The Euro is the currency that is officially in use by the European Union. It is also in use by sixteen of the twenty seven member states.

The states that have officially adopted the Euro as their currency include Belgium, Austria, Finland, Cyprus, Germany, France, Ireland, Greece, Italy, Malta, Luxembourg, Portugal, the Netherlands, Slovenia, Slovakia, and Spain.

About 327 million Europeans use the Euro on a daily basis, and about 175 million people in the world use currencies that are pegged on the Euro. This includes about 150 million people on the continent of Africa.

The U.S. Dollar alone is a larger reserve currency, and the Euro is also second to the U.S. Dollar as the most traded currency in the world. The Euro is, however, the currency with the largest amount of coinage and bank notes in circulation in the entire world.

The Euro is currency managed and overseen by a bank called the European Central Bank, and also by the Eurosystem, which is a collection of banks located all over the Eurozone countries. The United Kingdom is actually exempt from the Euro (choosing to use British Pounds instead), as is Denmark, and Sweden turned down the Euro back in 2003.

The Euro came into use through provisions in a treaty called the Maastricht Treaty, which was developed back in 1992. In order to accept the Euro as a currency, the nation in question had to meet certain rigorous budget criteria.

The country had to have a budget deficit of less than 3 percent of their GDP, needed to have low inflation, needed interest rates close to the average of the rest of the EU, and also had to have a debt ratio of less than 60 percent of GDP. The name of the Euro was officially adopted for use in December of 1995. Check out our homepage if you would like to find out more about converting dollars and euros.