What is the euro?

The euro is the currency of twelve of the fifteen member states of the European Union and of various micro-states and overseas territories financially associated with those twelve EU member states. The euro was introduced on 1st January 1999, although notes and coins denominated in euro did not come into circulation until 1st January 2002. All payments within Euroland (the unofficial term for the countries using the euro) could be made in euro since 1st January 1999, except for cash payments which could be made only in each country's old currency until 1st January 2002. The change on 1st January 2002 was simply that cash transactions could be made in euro throughout Euroland, and non-cash transactions have had to be made in euro since that date. Each country's old currency was quickly being phased out during the first few weeks of 2002.

Each country's old currency, e.g. DEM (Deutsche Mark) or FRF (French Franc), (known in the financial world as a legacy currency) became merely a "non-decimal denomination" of the euro on 1st January 1999. Just as there were 100 Centimes in a Franc, there were 6.55957 Francs in a euro. From 1st January 1999, the legacy currencies no longer existed as currencies in their own right. They all became just denominations the euro, and their interest rates, exchange rates and other matters were directly determined by those of euro.

What is a euro worth?

One euro is worth very roughly one US Dollar or two thirds of one Pound Sterling. The euro was permanently and irrevocably fixed against each of the currencies which it replaces as follows: EUR 1 = ATS 13.7603 = BEF 40.3399 = DEM 1.95583 = ESP 166.386 = FRF 6.55957 = FIM 5.94573 = GRD 340.750 = IEP 0.787564 = ITL 1936.27 = LUF 40.3399 = NLG 2.20371 = PTE 200.482. However, these conversion rates are now only referential use since the middle of 2002.

How do I pay in euro?

Since the legacy currencies were denominations of the euro, you could for example think of a 100 Deutschemark note as a 51.13 euro note until 31st December 2001. Although the euro replaced each country's old national currency, until the beginning of 2002 you could still see prices and payments in legacy currencies. This gradually decreased as retail outlets moved towards the euro, but outlets such as bars and vending machines which mainly use cash found it simpler to keep all prices and payments in legacy currencies until euro notes and coins were introduced on 1st January 2002. During early 2002, both euro cash and legacy cash were circulating, and if you paid in a legacy currency, you received your change in euro. Some retail outlets that do not normally deal in cash, for example airlines and car dealers, surprisingly kept their main prices in legacy currencies until late 2001, although it would have made more sense to publish their prices in euro from 1st January 1999.

Since 1st January 1999, any non-cash payments could be made in euro, for example, by credit card, debit card, bank transfer or cheque. Bank accounts could be denominated in euro since 1st January 1999, and any bank accounts denominated in legacy currencies had to be converted to euro by the end of 2001.

Euro notes and coins

Euro banknotes were not released to the public until 1st January 2002 and before that date, any cash payments in the euro zone had to be made in legacy currency cash which represented the euro. Euro notes are the same in all countries in Euroland, but the issuing country can be distinguished by the serial number on each note. Euro notes come in denominations of 5, 10, 20, 50, 100, 200 and 500 euro.

Euro coins were released to the general public in most Euroland countries in the middle of December 2001, but did not become legal tender until 1st January 2002. Each of the twelve Euroland countries as well as Monaco, San Marino and Vatican City State issue their own euro coins. Andorra did not issue its own coins in ADP, ESP or FRF, and consequently does not issue its own euro coins either. One side of the coins is the same in all fifteen issuing countries but the other side varies from country to country bearing a national emblem or often head of state in the case of monarchies. Euro coins come in denominations of 2 euro, 1 euro and 50, 20, 10, 5, 2 and 1 cent. With 8 coins and 15 issuing countries, there are 120 different designs of euro coins in circulation, all of which are legal tender throughout Euroland. The year on euro coins minted by many countries is 2002, even for coins minted in 1999 to 2001, because the coins did not become legal tender until 1st January 2002. Monarchies whose heads of state appear on the coins could not follow this policy as they could not be sure that the monarch would still be reigning in 2002. Euro coins issued by monarchies consequently bear the true year of minting, which may be earlier than 2002.

Euro symbol (€)

The euro symbol cannot be displayed on all computers yet. If it appears in brackets in the above heading, then your computer can display it. To produce a euro symbol yourself on a PC, make sure number lock is on, hold down the Alt key, and type 0128 on the number keypad. Some computer keyboards have a euro symbol to save you this complicated procedure. Patches for Windows can be downloaded free from Microsoft to enable the euro symbol on your PC.

The international abbreviation for the euro is EUR, registered by ISO, just like USD for the US Dollar or GBP for the Pound Sterling.

Note that the plural in English of the euro is "euro", for example "100 euro" not "100 euros", as stipulated by the European Union and endorsed by the European Central Bank and Bank of England. This practice is similar to the plural of other currencies such as Yen, Rand and Baht. The euro is always spelt with a lower case E in English except where a capital letter is required such as at the beginning of a sentence.

Euro exchange rates

Euro exchange rates should always be quoted as one euro in terms of variable units of another currency, for example EUR/USD, EUR/CHF and EUR/GBP. Note that in the UK, some retail banks and bureaux de change have unfortunately adopted the non-standard practice of quoting euro rates as GBP/EUR where a rate between EUR and GBP is more than 1. You can divide 1 by the GBP/EUR rate to produce the conventional EUR/GBP rate.

To ease mental conversion for British travellers, it is worth remembering that the EUR/GBP rate is often around 0.6214, the same as the conversion factor between miles and kilometres. Therefore the "divide by 8, multiply by 5 rule" familiar with British tourists for converting distances and speeds can be used roughly to convert EUR amounts to GBP amounts.

More information

This page is intended as a relatively simple overview of the euro for the consumer, and there is much information we have chosen not to include. For more advice, please see the following web sites:

European Central Bank
European Union euro information