Euro

DEFINITION of 'Euro'

The official currency of the European Union's (EU) member states. The euro was introduced by the EU in to the financial community in 1999 and physical euro coins and paper notes were introduced in 2002. Euros are printed and managed by the European System of Central Banks (ESCB).

The euro is abbreviated by the symbol "EUR."

BREAKING DOWN 'Euro'

The euro is the national currency of the EU member states who have adopted it, including Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. Together, these countries create what is called the Eurozone, a region where the euro serves as a common national currency for all of the separate nations.

This has important benefits, such as removing exchange rate risk from businesses and financial institutions operating in an increasingly globalized economy. On the other hand, critics of the euro system argue that it produces negative consequences, such as concentrating the power to set monetary policy in the European Central Bank. This removes the ability of the EU's member nations to implement monetary policies specific to themselves, locking them into the monetary policy established for the entire Eurozone, even though local monetary conditions may differ substantially from the overall Eurozone.

RELATED TERMS
  1. European Monetary System - EMS

    A 1979 arrangement between several European countries which links ...
  2. European Union - EU

    A group of European countries that participates in the world ...
  3. Currency Pair: EUR/USD (Euro/U.S. ...

    The abbreviation for the euro and U.S. dollar (EUR/USD) pair ...
  4. Euro Deposit

    The equivalent of a money market rate on cash deposits made in ...
  5. Eurozone

    A geographic and economic region that consists of all the European ...
  6. National Currency

    The currency or legal tender issued by a nation's central bank ...
Related Articles
  1. Forex Strategies

    How Would The Euro Trade If If A Grexit Occurs?

    In the event of a Grexit, the euro could head towards parity with the USD.
  2. Forex Strategies

    Buying Euros as a Long-Term Investment: Risks and Rewards

    Learn about the potential risks and rewards of long term investing in the euro and the current status of the European Union's financial markets.
  3. Forex Education

    Behind The Euro: History And Future

    The euro was designed to create economic parity among eurozone nations. Discover where it's going and where it's been.
  4. Economics

    No Exit: What Could Happen If the Eurozone Breaks Up?

    There is no exit strategy for nations in the eurozone or the EU because most members acknowledge that they are far better off together than apart.
  5. Economics

    Why the Euro Failed to Become the World's Reserve Currency

    Examine the current state of the U.S. dollar as the world's reserve currency; learn the major reasons why the euro has failed to replace it in that capacity.
  6. Economics

    3 Reasons Germany Would Be Better Off Without the Euro

    Explore the arguments in favor or against the idea that Germany would be better off leaving the European Union and abandoning the euro.
  7. Investing News

    Could 2016 Be the Year the EU Collapses?

    The EU is facing its strongest test since the potential "Grexit." Are pressures now severe enough to break it up?
  8. Forex Education

    Forex Currencies: The EUR/USD

    By Brian PerryThe United States and the European Union are the two largest economic entities in the world. The U.S. dollar is the world's most heavily traded and most widely held currency. The ...
  9. Forex

    Is Quantitative Easing Destroying The Euro?

    Quantitative easing being undertaken by the ECB to stabilize the Eurozone economies is sure to have some impact in decreasing the value of the euro.
  10. Forex Education

    What The Falling Euro Means For You

    The chaos in the eurozone could have huge effects on North America.
RELATED FAQS
  1. Why doesn't England use the euro?

    Understand why the United Kingdom has opted to not join the eurozone in adopting the euro over the pound sterling as its ... Read Answer >>
  2. How do you make money trading money?

    Investors can trade almost any currency in the world. Investors, as individuals, countries, and corporations, may trade in ... Read Answer >>
  3. What precise measures are implemented in most monetary policies?

    Read about some of the precise measures implemented in most monetary policies, and learn why monetary policy is considered ... Read Answer >>
  4. What countries comprise the majority of the global drugs sector?

    Find out which countries are the largest producers of pharmaceutical products in the world and why the United States dominates ... Read Answer >>
  5. How is free enterprise affected by monetary policy?

    Find out how state-run monetary policy changes a free enterprise system by adjusting market rates of interest and manipulating ... Read Answer >>
  6. Is there a world currency? If so, what is it?

    There is no such thing as a world currency. However, since World War II, the dominant or reserve currency of the world has ... Read Answer >>
Hot Definitions
  1. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  2. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  3. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  4. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  5. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  6. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
Trading Center