The euro was declared the official currency of the European member states and was conferred its official honorary status in Madrid on the 16th of December, 1995. The currency was introduced to the global financial markets on the 1st of January, 1999. Initially, the euro was used as currency only for accounting purposes, and it replaced the former European Currency Unit (ECU).
Three years later, it entered into circulation and was launched as physical coins and banknotes on the 1st of January, 2002. This marked its transition to a functional currency on a day-to-day basis. Eventually, all other former currencies were replaced by this single currency.
Today, 19 of the 27-member states of the European Union, with a population of about 341 million citizens use euro as their official currency. This group of states is also known as the eurozone or euro area. The euro is also used officially by four European microstates that are not EU members. They are Andorra, Monaco, San Marino and Vatican City. The British Overseas Territory of Akrotiri and Dhekelia use the euro. The Balkan countries Montenegro and Kosovo and several overseas territories of the EU members also use the euro as their currency.
A single euro is equivalent to 100 cents and is the second-largest and second-most traded currency in the foreign exchange market after the United States dollar.
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