Euro

AAA

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."

INVESTOPEDIA EXPLAINS '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. Bhutan Ngultrum (BTN)

    The currency of Bhutan. The Bhutan Ngultrum, abbreviated as BTN ...
  2. Currency

    A generally accepted form of money, including coins and paper ...
  3. Central Bank

    The entity responsible for overseeing the monetary system for ...
  4. System Open Market Account - SOMA

    An account that is managed by the Federal Reserve Bank, containing ...
  5. Asian Currency Unit - ACU

    A proposed basket of Asian currencies, similar to the European ...
  6. Monetary Policy

    The actions of a central bank, currency board or other regulatory ...
RELATED FAQS
  1. Why doesn't England use the euro?

    England, as part of the United Kingdom, is the most notable member of the European Union that has elected not to use the ... Read Full Answer >>
  2. How is the forex spot rate calculated?

    The forex spot rate is determined by supply and demand. Banks all over the world are buying and selling different currencies ... Read Full Answer >>
  3. When and why did the euro make its debut as a currency?

    On January 1, 1999, the European Union introduced its new currency, the euro. Originally, the euro was an overarching currency ... Read Full Answer >>
  4. Are eurodollars related to the currency called the euro?

    Eurodollars have little to do with the official currency of the European Union, the euro (EUR). In 1999, the euro was implemented ... Read Full Answer >>
  5. Why isn't the EUR/USD currency pair quoted as USD/EUR?

    In a currency pair, the first currency in the pair is called the base currency and the second is called the quote currency. ... Read Full Answer >>
Related Articles
  1. Forex Education

    Top 8 Most Tradable Currencies

    Currencies can provide diversification for a portfolio that's in a rut. Find out which ones you need to know.
  2. Forex Education

    Making Sense Of The EUR/CHF Relationship

    The strong correlation between EUR and CHF currency pairs is undeniable. Find out what it means for forex traders.
  3. Forex Education

    Forex: Wading Into The Currency Market

    We go over the ground rules and available resources needed for this undertaking.
  4. Forex Education

    Top 7 Questions About Currency Trading Answered

    Whether you're puzzled by pips or curious about carry trades, your queries are answered here.
  5. Mutual Funds & ETFs

    Profit From Forex With Currency ETFs

    There's always a bull market somewhere - and now you can find it with currency ETFs.
  6. Forex Education

    Forex Tutorial: The Forex Market

    In this online tutorial, beginners and experts alike can learn the ins and outs of the retail forex market.
  7. Economics

    Understanding Money Supply

    Money supply – also called money stock -- refers to the total amount of currency and other liquid financial products in an economy at a particular time.
  8. Economics

    What is Fiat Money?

    Fiat money is currency that a government has declared to be legal tender, but is not backed by a physical commodity.
  9. Economics

    What is M1?

    M1 is a measurement of money supply that includes all hard currency, plus demand deposits such as checking accounts.
  10. Forex

    Best Places To Go On A Strong Dollar In 2015

    The U.S. dollar is stronger than ever, which means that traveling abroad to certain countries will be easier on the wallet.

You May Also Like

Hot Definitions
  1. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  2. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  3. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  4. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  5. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  6. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
Trading Center