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Map of currencies used within the EU and dates of euro adoption      States which used the euro from 1999 (currency entered circulation 2002)      States which subsequently adopted the euro      Independent currencies

There are thirteen currencies of the European Union as of 2009, the principal currency being the euro. The euro is used by the institutions of the European Union and by the eurozone states, which account for 16 of the 27 member states of the European Union. All but three states are obliged to adopt the currency; the remaining three have, through legal exemption or de facto permission, retained the right to operate independent currencies within the European Union.

Contents

Euro

The euro is the result of the European Union's project for economic and monetary union which came fully into being on 1 January 2002. and it is now the currency used by the majority of European Union's member states, with all but three bound to adopt it. It is the currency used by the institutions of the European Union and in the failed European Constitution it was to be included with the symbols of Europe as the formal currency of the European Union. The euro is also widely used by other states outside the EU.

Current currencies

Currency State ¤ ISO Euro peg Notes
Euro EUR n/a Used by the institutions
Bulgarian lev  Bulgaria лв BGN Currency board 2012 target for euro
Czech koruna  Czech Republic CZK Floating 2015 target for euro
Danish krone  Denmark kr DKK ERM Formal opt-out but referendum planned
Estonian kroon  Estonia kr EEK ERM 2011 target for euro
Hungarian forint  Hungary Ft HUF Floating 2014 target for euro
Latvian lats  Latvia Ls LVL ERM 2013 target for euro
Lithuanian litas  Lithuania Lt LTL ERM 2013 target for euro
Polish złoty  Poland PLN Floating 2013 target for euro
Pound sterling
Gibraltar pound
 United Kingdom
 Gibraltar
£ GBP
GIP
Floating Formal opt-out
Romanian leu  Romania Leu RON Floating 2014 target for euro
Swedish krona  Sweden kr SEK Floating De facto opt-out
Turkish lira  Cyprus TL / £ TRY Floating Used in Northern Cyprus[1]

Opt-outs

The United Kingdom was given an opt-out from the euro in the Maastricht Treaty when it became the only state not to compromise to back a less ambitious currency project. Denmark gained its opt-out after the Danish electorate rejected the treaty in a 1992 referendum and Denmark was given four opt-outs in order to pass the treaty.

Sweden then held a referendum in 2003 even though it was obliged to adopt the currency and it was rejected by the Swedish electorate. The European Commission stated it would respect this decision for now but not tolerate similar moves from countries that join the EU after the euro is introduced. Hence, the British, Danish and Swedish currencies are not obliged to be retired, however Denmark is considering dropping its opt-out (see future below).

Institutions

Those European Union states that have adopted it are known as the eurozone and share the European Central Bank (ECB). The ECB and the national central banks of all EU countries, including those who operate an independent currency, are part of the European System of Central Banks. Before a state adopts the euro, its currency has to spend at least two years in the European Exchange Rate Mechanism which pegs it to the euro within a fixed band. Currently four currencies are in ERM, including the Danish Krone which has an opt-out. The Bulgaria lev is also pegged via a currency board.

Historic currencies

Currency State Symbol ISO Yielded
Austrian schilling  Austria S or öS (ATS) 2002
Belgian franc  Belgium fr. (BEF) 2002
Dutch guilder  Netherlands ƒ or fl. (NLG) 2002
Finnish markka  Finland mk (FIM) 2002
French franc  France F or FF (FRF) 2002
German mark  Germany DM (DEM) 2002
Irish pound  Ireland £ (IEP) 2002
Italian lira  Italy (ITL) 2002
Luxembourgian franc  Luxembourg fr. or F (LUF) 2002
Portuguese escudo  Portugal \mathrm{S}\!\!\!\Vert (PTE) 2002
Spanish peseta  Spain (ESP) 2002
Greek drachma  Greece Δρχ., Δρ. or ₯ (GRD) 2002
Slovenian tolar  Slovenia (SIT) 2007
Cypriot pound  Cyprus £ (CYP) 2008
Maltese lira  Malta ₤ and Lm (MTL) 2008
Slovak koruna  Slovakia Sk (SKK) 2009

Future

With the future enlargement of the European Union, each new state will bring another currency. All current members (except for the UK, Denmark and Sweden) and all future members are obliged to eventually adopt the euro as their currency, yielding their present currencies. Denmark, which has an opt out, is expected to hold a referendum on its opt-outs once the Lisbon Treaty is in force, at 2010. With the reunification of Cyprus, the Turkish lira will cease to be in use on EU territory.

See also

References

  1. ^ The government in Northern Cyprus isn't recognised by the Republic of Cyprus (which claims jurisdiction over the whole island) and the European Union. Although usage of the euro is high, it will only formally be replaced once the island is reunified.
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