Use of the euro

The euro was launched on 1 January 1999, when it became the currency of more than 300 million people in Europe. For the first three years it was an invisible currency, only used for accounting purposes, e.g. in electronic payments. Euro cash was not introduced until 1 January 2002, when it replaced, at fixed conversion rates, the banknotes and coins of the national currencies like the Belgian franc and the Deutsche Mark.

Today, euro banknotes and coins are legal tender in 19 of the 28 Member States of the European Union, including the overseas departments, territories and islands which are either part of, or associated with, euro area countries. These countries form the euro area. The micro-states of Andorra, Monaco, San Marino and Vatican City also use the euro, on the basis of a formal arrangement with the European Community. Montenegro and Kosovo likewise use the euro, but without a formal arrangement. Cash payments are now made in the same currency by 340 million people — euro banknotes and coins have become a tangible symbol of European integration.

All EU countries, except Denmark and the United Kingdom, which have an opt-out, are expected to join the monetary union and to introduce the euro as soon as they fulfil the convergence criteria.

Interactive map of the euro area

Austria

EU member using the euro

EU member since 1995

Euro since 1999 (cash since 2002)

Belgium

EU member using the euro

EU founding member in 1957

Euro since 1999 (cash since 2002)

Bulgaria

EU member not using the euro

EU member since 2007

Cyprus

EU member using the euro

EU member since 2004

Euro since 2008

Czech Republic

EU member not using the euro

EU member since 2004

Germany

EU member using the euro

EU founding member in 1957

Euro since 1999 (cash since 2002)

Denmark

EU member not using the euro

EU member since 1973

Estonia

EU member using the euro

EU member since 2004

Euro since 2011

Spain

EU member using the euro

EU member since 1986

Euro since 1999 (cash since 2002)

Finland

EU member using the euro

EU member since 1995

Euro since 1999 (cash since 2002)

France

EU member using the euro

EU founding member in 1957

Euro since 1999 (cash since 2002)

United Kingdom

EU member not using the euro

EU member since 1973

Greece

EU member using the euro

EU member since 1981

Euro since 2001 (cash since 2002)

Croatia

EU member not using the euro

EU member since 2013

Hungary

EU member not using the euro

EU member since 2004

Ireland

EU member using the euro

EU member since 1973

Euro since 1999 (cash since 2002)

Italy

EU member using the euro

EU founding member in 1957

Euro since 1999 (cash since 2002)

Lithuania

EU member using the euro

EU member since 2004

Euro since 2015

Luxembourg

EU member using the euro

EU founding member in 1957

Euro since 1999 (cash since 2002)

Latvia

EU member using the euro

EU member since 2004

Euro since 2014

Monaco

Non-EU country

Malta

EU member using the euro

EU member since 2004

Euro since 2008

The Netherlands

EU member using the euro

EU founding member in 1957

Euro since 1999 (cash since 2002)

Poland

EU member not using the euro

EU member since 2004

Portugal

EU member using the euro

EU member since 1986

Euro since 1999 (cash since 2002)

Romania

EU member not using the euro

EU member since 2007

Sweden

EU member not using the euro

EU member since 1995

Slovenia

EU member using the euro

EU member since 2004

Euro since 2007

Slovakia

EU member using the euro

EU member since 2004

Euro since 2009

San Marino

Non-EU country

Fixed euro conversion rates
Currency
1 BEF 40.3399 (Belgian francs)
1 DEM 1.95583 (Deutsche Mark)
1 EEK 15.6466 (Estonian kroon)
1 IEP 0.787564 (Irish pound)
1 GRD 340.750 (Greek drachmas)
1 ESP 166.386 (Spanish pesetas)
1 CYP 0.585274 (Cypriot pound)
1 FRF 6.55957 (French francs)
1 ITL 1936.27 (Italian lire)
1 LVL 0.702804 (Latvian lats)
1 LTL 3.45280 (Lithuanian litas)
1 LUF 40.3399 (Luxembourg francs)
1 MTL 0.429300 (Maltese lira)
1 NLG 2.20371 (Dutch guilders)
1 ATS 13.7603 (Austrian schillings)
1 PTE 200.482 (Portuguese escudos)
1 SIT 239.640 (Slovenian tolars)
1 SKK 30.1260 (Slovak koruna)
1 FIM 5.94573 (Finnish markkas)

Cash flows in euro area

Euro banknotes (and coins) circulate widely in the euro area mainly because of tourism, business travel and cross-border shopping. To a much more limited extent, national banknotes, before the introduction of the euro, also “moved” across borders and then had to be “repatriated”, mainly through the commercial banking system, to the central bank that issued them. Such returns are not necessary with the euro. However, since large quantities of euro banknotes do not remain in the country where they were issued but are taken to other euro countries, and spent there, the central banks have to redistribute them in order to avoid a banknote shortage in one country and a surplus in another. These bulk transfers are coordinated centrally and financed by the ECB.

The importance of cash and its unique features

Since the introduction of euro cash in 2002, the value and the number of euro banknotes in circulation have risen steadily. Cash is by far the most widely used means of payment for retail transactions in the euro area in terms of the number of transactions, although in terms of value it has a significantly smaller share. In both respects, however, the role of cash has been gradually declining in recent decades, while the use of debit and credit cards has been growing, a trend that is expected to continue.

As a payment instrument, cash has some unique features:

  • it is the most widely usable and fastest payment instrument for retail transactions and it is the most important contingency payment instrument;
  • it is considered the cheapest instrument for small retail payments – the average overall cost per transaction for small payments is lower for cash than for comparable electronic payment instruments;
  • it is “inclusive”: people who have no bank accounts or limited access to them or who are unable to use electronic forms of payment can still make payments;
  • it enables people to keep a close check on their spending;
  • it is both a payment instrument and a store of value; and
  • it has proved to be secure in terms of fraud/counterfeiting resistance.

In view of these features, society is not ready to do without cash. Cash will remain indispensable as a payment instrument for many years to come.

Eurosystem position on cash as a means of payment

One of the basic tasks of the Eurosystem under the Treaty on the Functioning of the EU is to promote the smooth operation of the payment system. The Eurosystem is neutral with regard to the different payment instruments. It does not favour one instrument over another. However, the Eurosystem central banks have a special responsibility for cash, as they are the official issuers of euro banknotes. In addition, most of them put into circulation the euro coins, which are issued by the Member States. Therefore, the Eurosystem is committed to supporting cash as a generally available, easy-to-use, reliable and efficient means of payment for retail transactions. Within its sphere of competence, the Eurosystem monitors and continuously seeks to promote the safety, resilience and efficiency of the euro area cash cycles.

Study of the payment attitudes of consumers in the euro area

The ECB and the national central banks of the euro area are carrying out a study of the payment attitudes of consumers in the euro area.

The goal is to improve our understanding of consumers' payment choices when they make transactions, either electronically or with cash. It provides us with information that is fundamental for the development of our policies, which can improve the efficiency of the cash cycle and the payment system as a whole.

For this purpose, Kantar Public will conduct online, telephone and face-to-face interviews with people throughout the euro area. This research will be carried out in March, April, September, October, November and December 2019, and January 2020. All data will be handled strictly confidentially and cannot be traced back to the identity of individual respondents.

We will use the collected information to produce a report in 2020, similar to the study on the use of cash by households in the euro area published in 2017.