The euro is the most tangible proof of European integration – the common currency in 19 out of 28 EU countries and used by some 338.6 million people every day. The benefits of the common currency are immediately obvious to anyone travelling abroad or shopping online on websites based in another EU country.
The Economic and Monetary Union involves the coordination of economic and fiscal policies, a common monetary policy and the euro as the common currency. The euro was launched on 1 January 1999 as a virtual currency for cash-less payments and accounting purposes. Banknotes and coins were introduced on 1 January 2002.
The euro (€) is the official currency of 19 out of 28 EU member countries. These countries are collectively known as the Euro area.
Over 175 million people worldwide use currencies which are pegged to the euro.
To be able to join the euro area the EU member states are required to fulfil the so-called 'convergence criteria'. These are economic and legal conditions agreed in the Maastricht Treaty in 1992 and are also known as 'Maastricht criteria'.
The Treaty does not specify a particular timetable for joining the euro area, but leaves it to Member States to develop their own strategies for meeting the condition for euro adoption.
A single currency offers many advantages, such as eliminating fluctuating exchange rates and exchange costs. Because it is easier for companies to conduct cross-border trade and the economy is more stable, the economy grows and consumers have more choice. A common currency also encourages people to travel and shop in other countries. At global level, the euro gives the EU more clout, as it is the second most important international currency after the US dollar.
The independent European Central Bank is in charge of monetary issues in the EU. Its main goal is to maintain price stability. The ECB also sets a number of key interest rates for the euro area. Although taxes are still levied by EU countries and each country decides upon its own budget, national governments have devised common rules on public finances to be able to coordinate their activities for stability, growth and employment.
All EU countries - or almost all - have to join the Eurozone. But what are the rules of the common currency? Journey into the inner workings of the euro.
The new €20 banknote will enter into circulation on 25 November 2015. For more information: http://www.new-euro-banknotes.eu