Euro Currency

Overview of Currency

Description 

The Euro (EUR) is the official currency of the Eurozone, which comprises the 17 states within the European Union: Austria, Cyprus, Estonia, Belgium, Germany, Malta, Netherlands, Italy, Ireland, Greece, Luxembourg, France, Slovakia, Portugal, Spain, and Slovenia. As the second most traded currency in the world, the euro plays an important role in the global economy. 

Economy 

• The euro is seen as a macroeconomic system that fosters economic stability in the countries that are part of the eurozone. 
• Since the introduction of the Euro, trade within the Eurozone has increased by 5%.
• It has significantly minimized exchange rate risks for all the countries within the eurozone. 
• Many countries have witnessed a reduction in interest rates.
• Tourism across EU countries has also increased by 6.5% due to the common currency. 
• The euro is recognized as a major reserve currency, similar to the other league as. Japanese yen, US dollar, British pound, and Swiss franc.
• The exchange rate for the euro is a flexible or floating rate.

History 

• The euro was introduced by the Maastricht Treaty in 1992. 
• The name “Euro” was officially established in 1995, when the euro replaced the “European currency unit”.
• Strict criteria were set for the member states that they had to meet before becoming a part of the eurozone. Notably, the United Kingdom and Denmark were exempt from this rule.
• The euro began to replace the European currency unit in 1999, leading to the discontinuation and replacement of all old currencies by the new euro notes and coins in 2002. The adoption of the euro varied among the different member countries, and they discontinued the old notes and coins at different times.

Trivia 

• The one euro coin (1€) weighs 7.50 g with a 23.25mm diameter and, 2.33mm thickness. 
• High-denomination banknotes (€100, €200, €500) have a longer lifespan as they are not used frequently.
• The ECB announced to redesign of the banknotes on 6th December 2021 to make it more relatable to the public. 
• The lifespan of a euro banknote is about three years before replacement because of wear. The Europa series lower denomination €5 and €10 banknotes last longer because of their additional coating.