Currencies of the European Union


Currencies of the European Union
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
  States using other currencies

There are fourteen currencies of the European Union as of 2011, 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 17 of the 27 member states of the European Union. All but two 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 2014 target for euro
Czech koruna  Czech Republic CZK Floating 2015 earliest
Danish krone  Denmark kr DKK ERM Formal opt-out
Hungarian forint  Hungary Ft HUF Floating No current target for euro
Latvian lats  Latvia Ls LVL ERM 2014 target for euro earliest
Lithuanian litas  Lithuania Lt LTL ERM 2014 target for euro earliest
Polish złoty  Poland PLN Floating No current target for euro
Pound sterling
Gibraltar pound
 United Kingdom
 Gibraltar
£ GBP
GIP
Floating Formal opt-out
Romanian leu  Romania Leu RON Floating 2015 target for euro earliest
Swedish krona  Sweden kr SEK Floating De facto opt-out
Swiss franc Flag of Campione d'Italia.svg Campione d'Italia (Italy)[1] Fr. CHF Floating[2] Also unofficially used in Büsingen am Hochrhein, Germany.[3] Swiss Franc is issued by Switzerland.
Note that there are other currencies used in overseas territories of member states. Those territories however are not part of the European Union proper (legally subject to all its law) so are not listed here.

Northern Cyprus

EU law and treaties application to Northern Cyprus is currently suspended.[4] Its territory is claimed by the Republic of Cyprus, one of the EU member states, but currently Northern Cyprus is under Turkish Republic of Northern Cyprus (TRNC) control. TRNC isn't recognised by the Republic of Cyprus (which claims jurisdiction over the whole island) and the European Union.

EU law would start to apply in Northern Cyprus if it comes under control of the Republic of Cyprus (if the Cyprus dispute is resolved trough unification), whose official legal tender is the Euro.

Presently, the TRNC government has declared the Turkish lira (TL, TRY) to be its legal tender. TL is not issued by any EU member state, but by Turkey and it has a free floating regime.[5] Nevertheless usage of the Euro in Northern Cyprus is already high in practice.[6][7][8]

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 reach a compromise regarding currency issues. 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 Completely Yielded
on
Rate to
euro
Notes
Austrian schilling  Austria S or öS (ATS) 1999/2002 13.7603
Belgian franc  Belgium fr. (BEF) 1999/2002 40.3399 Interchangeable with Luxembourgian franc (BELU)
Cypriot pound  Cyprus £ (CYP) 2008 0.585274
Dutch guilder  Netherlands ƒ or fl. (NLG) 1999/2002 2.20371
Estonian kroon  Estonia Kr (EEK) 2011 15.6466
Finnish markka  Finland mk (FIM) 1999/2002 5.94573
French franc  France ₣, F or FF (FRF) 1999/2002 6.55957 Linked to Monegasque franc,[9] both valid in France, Andorra and Monaco.
German mark  Germany DM (DEM) 1999/2002 1.95583
Greek drachma  Greece Δρχ., Δρ. or ₯ (GRD) 2001/2002 340.75
Irish pound  Ireland £ (IEP) 1999/2002 0.787564
Italian lira  Italy ₤, L. or LIT (ITL) 1999/2002 1,936.27 Linked to Sammarinese & Vatican lira,[10] all valid in Italy, San Marino and the Vatican City.
Luxembourgian franc  Luxembourg fr. or F (LUF) 1999/2002 40.3399 Interchangeable with Belgian franc (BLEU).
Maltese lira  Malta ₤ or Lm (MTL) 2008 0.4293
Portuguese escudo  Portugal \mathrm{S}\!\!\!\Vert or $ (PTE) 1999/2002 200.482
Slovak koruna  Slovakia Sk (SKK) 2009 30.126
Slovenian tolar  Slovenia SIT (SIT) 2007 239.64
Spanish peseta  Spain (ESP) 1999/2002 166.386
European Currency Unit Accounting only ₠, ECU or XEU (XEU) 1999/2002 1 Accounting currency along side national currencies until the euro introduction.

Future

Except for the three states with opt outs, all current and future members of the EU are obliged to adopt the Euro as their currency, thus replacing their current ones. Denmark, which has an opt out, is expected to hold a referendum on its opt-outs due to increasing pressure to adopt the Euro, the Danish Kroner already pegged to the Euro, and Denmark having fulfilled all the existing requirements.

References

  1. ^ Swiss franc is the official currency and euro is widely accepted.
  2. ^ But capped as of September 2011
  3. ^ Euro is the officially currency, but the Swiss franc is commonly used
  4. ^ Protocol 10 to the Treaty of Accession 2003 (OJ L 236, 23.9.2003, p. 955).
  5. ^ De Facto Classification of Exchange Rate Regimes and Monetary Policy Frameworks, IMF 2008
  6. ^ Hadjicostis, Menelaos (30 December 2007) In north Cyprus, the Turkish lira is the official currency, but euro is embraced, International Herald Tribune
  7. ^ Cyprus and Malta adopt the euro BBC
  8. ^ Cyprus' isolated north will be enthusiastic – if unofficial – euro users
  9. ^ Replaced alongside French franc with euro
  10. ^ Replaced alongside Italian lira with euro

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