Title: Euro Definition
Headings: Euro
Euro
What is the Euro?
Key Takeaways
Understanding the Euro

Content: Understanding the Euro
The EU introduced the euro in 1999, and physical euro coins and paper notes were introduced in 2002. The symbol "EUR" is the abbreviation for the euro and it is the second most traded currency in the world, after the U.S. dollar . 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, Spain, Cyprus, Estonia, Latvia, Lithuania, Malta, Slovakia, and Slovenia. These countries form the eurozone, a region where the euro serves as the common national currency. Additionally, four other non-EU nations (Andorra, Vatican City, San Marino, and Monaco) use the euro as their official currency and several countries have their currencies pegged to the euro. The European Central Bank (ECB) is tasked with the dual mandates of preserving the value of the euro and maintaining price stability in the European Union. The ECB, along with the national central banks of all the EU member states, including those that have not adopted the euro, falls under the purview of the European System of Central Banks (ESCB). A key benefit of implementing the euro is that it removed exchange rate risk from eurozone businesses and financial institutions operating in an increasingly globalized economy. On the other hand, critics of the euro argue that its adoption has had negative consequences, such as giving the ECB the power to set monetary policy for the entire eurozone. This removes the ability of the EU's member nations to implement monetary policies tailored to their economies and leaves them locked to the policy established for the entire eurozone.