International status and usage of the euro facts for kids

Kids Encyclopedia Facts

The euro is a special currency used by many countries in Europe. It was first introduced in 1999, and by 2002, it had replaced 12 different currencies. This made it easier for people to travel and trade across Europe.

The euro is not just used in the countries that are part of the Eurozone (the European Union countries that officially use the euro). It's also used in some other places around the world. Because of its growing use, the euro has become the main challenger to the U.S. dollar as the world's most important reserve currency. This means many countries hold euros as a backup currency.

Worldwide use of the euro and U.S. dollar: Eurozone External adopters of the euro Currencies pegged to the euro Currencies pegged to the euro within narrow band United States External adopters of the U.S. dollar Currencies pegged to the U.S. dollar Currencies pegged to the U.S. dollar within narrow band

Countries Using the Euro
Euro Use in Other Countries
Euro as a Trading Currency
Currencies Linked to the Euro
Euro as a Reserve Currency
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See also

Countries Using the Euro

Some countries outside the Eurozone officially use the euro. They have special agreements with the European Union (EU) to do this.

Small European Countries

Several small countries in Europe, called microstates, use the euro. They had to make agreements with the EU to do so. These agreements allow them to use the euro and even make their own euro coins. However, they cannot print euro banknotes.

Country	Started using euro	Can make coins	Population
Andorra	1999 (unofficial) 2012 (official)	2013	82,000
Monaco	1999	2002	32,671
San Marino	1999	2002	29,615
Vatican City	1999	2002	800

Before the euro, these countries used currencies that were linked to the French franc or Italian lira. When the euro replaced those currencies, these microstates switched to the euro.

Andorra is one of these countries. Before 1999, it used both the French franc and Spanish peseta. It started using the euro in 2002 without a formal agreement. After many talks, Andorra signed an agreement with the EU in 2011. This made the euro its official currency and allowed it to mint its own euro coins starting in 2013.

Eurozone participation

European Union (EU) member states: 20 in the eurozone 1 in ERM II, without opt-out (Bulgaria) 1 in ERM II, with an opt-out (Denmark) 5 not in ERM II, but obliged to join the eurozone on meeting convergence criteria (Czech Republic, Hungary, Poland, Romania, and Sweden)
Non–EU member territories: 4 using the euro with a monetary agreement (Andorra, Monaco, San Marino, and Vatican City) 2 using the euro unilaterally (Kosovo and Montenegro)

Territories Outside the EU

Some territories that belong to EU countries but are not part of the EU also use the euro. These are often islands or distant lands. They have agreements to use the euro as their money. Unlike the small European countries, these territories cannot make their own euro coins.

For example, Saint-Pierre-et-Miquelon (near Canada) and Mayotte (in the Indian Ocean) started using the euro in 1999. Saint Barthélemy (in the Caribbean) also uses the euro.

When Cyprus adopted the euro in 2008, the Sovereign Base Areas of Akrotiri and Dhekelia, which are British territories on Cyprus, also started using the euro. This was done to match the currency of the Republic of Cyprus.

Territory	Started using euro	Agreement Date	Population	Notes
Akrotiri and Dhekelia	2008	2007	14,500	A British territory. It switched to the euro when Cyprus did.
Saint Pierre and Miquelon	1999	1998	6,125	A French territory.
French Southern and Antarctic Lands	1999		140	A French territory.
Saint-Barthélemy	1999	2011	8,823	A French territory. Its status changed in 2012.

Countries Using the Euro Unofficially

Some countries use the euro even without a formal agreement with the EU. They simply started using it because it was convenient or helped their economy.

Country/Territory	Started Using	Population
Kosovo	2002	1,700,000
Montenegro	2002	684,736

Montenegro and Kosovo are two examples. They used the German mark before the euro. When the mark was replaced by the euro, they switched to the euro too. They don't make their own euro coins or banknotes. They rely on euros already in circulation.

Using the euro has helped make their economies more stable. The European Central Bank (ECB) doesn't officially support or stop countries from using the euro unofficially.

Euro Use in Other Countries

Even in countries where the euro is not the official currency, you might find it accepted.

In EU Countries Not Using the Euro

In countries next to the Eurozone, like Poland, the Czech Republic, and Hungary, shops near the border or in big cities often accept euros. This is also true in Switzerland, which is surrounded by Eurozone countries.

Many gas stations and highway rest stops in European countries outside the Eurozone also accept euros. Some countries, like Poland, even let you pay highway tolls in euros.

In the United Kingdom

Some shops in the United Kingdom, especially those for tourists, accept euros. In Northern Ireland, which shares a border with the Republic of Ireland (a Eurozone country), many shops accept euros.

In Northern Cyprus

Northern Cyprus uses the Turkish lira as its official currency. However, the euro is also widely accepted, especially in tourist areas and large supermarkets. This is because many tourists visit from Eurozone countries.

In Zimbabwe

For a period from 2009 to 2019, the local currency in Zimbabwe was not used due to very high inflation. During this time, people used several foreign currencies, including the United States dollar, South African rand, and the euro.

Euro as a Trading Currency

Some countries use the euro for international trade instead of the U.S. dollar.

For example, Cuba and North Korea announced in the early 2000s that they would use the euro for international trading. Syria followed in 2006.

Iran has also asked its oil customers to pay in currencies other than the U.S. dollar, often using the euro for trade with Europe. In 2018, Venezuela also announced it would use euros and other currencies for government auctions, moving away from the U.S. dollar.

Currencies Linked to the Euro

Many countries link their own currency to the euro. This is called a "pegged currency." It means their currency's value stays very close to the euro's value. This helps keep their economy stable, especially for countries with weaker economies. The euro is seen as a strong and stable currency.

For example, the Bosnia and Herzegovina convertible mark is directly linked to the euro. The Bulgarian lev is also pegged to the euro. Denmark's currency, the Danish krone, is also linked to the euro, but it can move a little bit more.

Some African currencies, like the West African CFA franc and the Central African CFA franc, are also pegged to the euro. This is because they were historically linked to the French franc, which the euro replaced.

This Swiss petrol station accepts payment in euros

Euro as a Reserve Currency

The euro is one of the most important reserve currencies in the world, second only to the U.S. dollar. A reserve currency is a foreign currency held by central banks in large amounts. Countries use reserve currencies for international payments and to support their own currency.

The euro inherited its status from the German mark. Its share of global reserves grew after 2002. Before 2009, many people thought the euro might even become the world's most important reserve currency.

For example, Alan Greenspan, a former head of the U.S. central bank, said in 2007 that the euro could definitely replace the U.S. dollar as the main reserve currency.

However, after 2009, the European debt crisis caused some doubts about the euro's future. Its share of global reserves dropped for a while. But it remains a very important currency for countries around the world.

Images for kids

Sign at a London souvenir stall, stating that payment in euros is accepted