By Ata Ufuk Seker and Emir Yildirim
BRUSSELS (AA) - The euro, the official currency of 21 out of the 27 EU member states, turns 27 on New Year’s Day.
The euro came into effect on Jan. 1, 1999, and it began to be used daily after a three-year transition period.
Euro banknotes and coins entered circulation on Jan. 1, 2002, replacing their predecessors in member countries.
Currently, the euro is the official currency of Austria, Belgium, Bulgaria, Croatia, Estonia, Finland, France, Germany, Greece, the Greek Administration, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain.
- Bulgaria adopted euro on New Year’s Day
The European Commission, the European Central Bank (ECB), and EU finance ministers decided Bulgaria was finally ready to adopt the euro at the beginning of the new year.
Bulgaria, which has been an EU member state since 2007, joined the eurozone on Jan. 1, and thus officially adopted the currency on New Year’s Day.
EU member states using the euro as their main currency are in the eurozone. The monetary policy of eurozone countries is managed by the Eurosystem, made up of the ECB and the central banks of member states.
The ECB’s mission is to ensure price stability in the eurozone. The bank’s medium-term inflation target is set at 2%.
The ECB supervises banks, monitors the financial system, prints euro banknotes, and ensures secure payments using the euro by card or online payments, while researching crypto assets.
- Euro used by over 350M users
The euro is used by over 350 million people in Europe. The currency comes in different banknotes of various colors and sizes; these include some seven different bills, namely banknotes of 5, 10, 20, 50, 100, 200, and 500 euros, as well as coins worth 1, 2, 5, 10, 20, and 50 euro cents, and 1- and 2-euro coins are also in circulation.
In 2019, printing of the highest-value 50-euro banknotes was discontinued to combat terrorist financing and money laundering.
The 500-euro banknote is also no longer used in daily life, and these banknotes can only be deposited into bank accounts or exchanged at banks.
All EU member states except for Denmark are required to switch to the euro if they meet certain criteria.
Denmark rejected the euro in a referendum and has resisted switching from its local currency despite meeting all the economic and other criteria.
Other countries that have yet to switch to the euro are Hungary, Poland, Romania, and Sweden.
EU member states that have not yet switched to the euro continue to use their local currencies independently and maintain control over their economic situation and monetary policy.
- Ups and downs
When launched in 1999, €1 was worth $1.17, but the currency rapidly lost value against the dollar after its inception, falling to as low as $0.83 in October 2000.
But in 2002–2008, the euro gained against the US dollar, reaching a record high of $1.6 in 2008, but then gradually declined over time.
The euro/US dollar exchange rate stood at 1.03 at the beginning of 2025, and in late December hovered at 1.18.
In 2025 the euro gained around 15% against the US dollar.
The currency is widely used in international markets, as it is the second-most-used reserve currency, following the US dollar.
The US dollar makes up 58% of total international reserves, while the euro accounts for 20%.
- High public debt
The eurozone countries face excessively high levels of debt.
The total public debt in the eurozone reached €13.6 trillion ($15.9 trillion) and the rise in public debt over the past year was €578 billion ($678.4 billion).
The eurozone’s public debt to gross domestic product (GDP) ratio rose to 88.2% this year, up from 87.7% last year.
Greece has the highest ratio of public debt to GDP among EU member states at 151.2%, followed by Italy with 138.3%, France with 115.8%, Belgium with 106.2%, Spain with 103.4%, Portugal with 96.8%, and Finland with 88.4%.
Under regular circumstances, the public debt of EU member states should not exceed 60% of their GDP.
EU countries have been unable to implement measures to reduce public debt and austerity policies for many years, so this high public debt is affecting the regional economy.