European Currencies

Most people have no idea that when it comes to European currencies, thirteen exist.  However, the currency that most people are aware of and the one that is used the most is the Euro.  This particular currency is used by institutions of the European Union, as well as eurozone states.  Of the 27 members of the European Union, 16 of the 27 depend on the Euro.  Of all the states that within the Union three are mandated to adopt the Euro and of the rest, they have been given legal right to continue using independent currencies instead of the Euro.

When the European Union started working on a new project specifically for the economic and monetary union that took effect in 2002, the Euro was developed.  In addition to being the primary currency used by the institutions of the European Union, this currency is also used outside in other states.  Of the states within the eurozone, they all share one particular bank – the European Central Bank, which along with other national central banks within all of the European countries is a part of a large network known as the “European System of Central Banks.

Keep in mind that for a state to become a member of the eurozone and use the Euro, the current currency being used by the state would need to stay within a system known as the “European Exchange Rate Mechanism” for a minimum of two years.  This system pegs to the Euro using a fixed band.  Included in this system are four different currencies, two of those being the Bulgaria Lev, which is pegged using a currency board too, and the Danish Krone that has what is known as an “opt out.”

The “opt out” was an option provided by the United Kingdom as a part of the Maastricht Treaty.  At this time, the UK was the only state in Europe that did not compromise in backing a more assertive currency project.  Then, once the Danish electorate rejected this treaty in 1992, it too was granted an “opt out.”  In fact, Denmark was the only country provided with four “opt outs” so Europe could pass the Maastricht Treaty.

Then in 2003, Sweden hosted a referendum and while this country had originally been mandated to adopt the Euro, the Swedish electorate rejected it.  As a result, the European Commission decided to respect Sweden’s decision but only on a temporary basis.  However, the Commission went on to let all other countries in Europe that other country rejections would not be tolerated.  Therefore, Britain, Denmark, and Sweden are the only European countries that are allowed to keep using their original currency although word is that Denmark is reconsidering its current “opt out” status.

Of the European states that have yet to switch to the Euro, dates have been set for this change to be finalized.  The following are the 13 European currencies and their status to the Euro.