When Did the Euro Currency Start?

Discover when the euro was launched, when coins and notes entered circulation, and how the currency developed.

When Did the Euro Currency Start? (UK Guide)

The euro is one of the world’s most widely used currencies and a defining feature of the European Union’s economic identity. For UK readers, particularly those who travel to Europe or trade with EU countries, understanding when and how the euro began is useful background for financial planning, historical context and currency comparison. This article explores the origins of the euro, the key milestones in its rollout, and how it has evolved since launch.

What Is the Euro?

The euro (€) is the official currency of the eurozone, used by 20 of the 27 European Union (EU) member states. It is managed by the European Central Bank (ECB) and supported by the Eurosystem, which comprises national central banks of participating countries. Introduced to enhance economic integration and eliminate exchange rate fluctuations within the EU, the euro is now one of the most traded currencies globally.

When Did the Euro Begin?

The euro was officially introduced on 1 January 1999—but only as an electronic currency used for accounting and financial transactions. At this point, it replaced national currencies such as the Deutsche Mark, French franc and Italian lira in the financial markets, but no physical banknotes or coins were in circulation yet.

The physical euro currency—banknotes and coins—entered circulation on 1 January 2002, when it became legal tender in 12 EU countries. From this date, consumers could withdraw euros from ATMs, pay for goods in euros and receive wages in euros. Over the next two months, national currencies were gradually phased out.

Who Uses the Euro?

As of 2024, the euro is the official currency of the following 20 EU countries:
Austria, Belgium, Croatia, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia and Spain.

Non-EU countries such as Kosovo and Montenegro also use the euro, although they are not part of the eurozone.

The United Kingdom chose not to adopt the euro, retaining the pound sterling (GBP) as its national currency even during EU membership. This decision was reaffirmed through various political and public consultations over the years.

Key Milestones in the Euro’s Development

  • 1992: The Maastricht Treaty laid the groundwork for the euro, committing member states to economic and monetary union (EMU).

  • 1999: The euro launched in non-physical form for accounting and interbank transfers.

  • 2002: Euro coins and banknotes entered public circulation across the initial 12 countries.

  • 2015 onwards: Several newer EU members joined the eurozone, including Lithuania (2015) and Croatia (2023).

The euro’s adoption is conditional upon meeting strict criteria, including inflation control, exchange rate stability, fiscal responsibility and interest rate convergence—collectively known as the Maastricht criteria.

Benefits and Risks of the Euro

Benefits:

  • Eliminates currency exchange costs for cross-border trade and travel within the eurozone

  • Promotes price transparency and competition

  • Enhances economic and political integration among members

Risks and criticisms:

  • One-size-fits-all monetary policy can be problematic for diverse economies

  • Limits national governments’ ability to adjust exchange rates

  • Economic shocks can hit weaker economies harder, as seen in the eurozone crisis (2010–2012)

From a UK perspective, the euro has introduced stability in dealings with eurozone partners but also removed the flexibility of bilateral exchange rate movements for those countries.

Real-Life Examples

  • A UK business importing products from Germany in 2001 would have paid in Deutsche Marks and dealt with currency conversion. By 2002, those invoices switched to euros, simplifying payments.

  • British holidaymakers travelling to Spain in 1999 still used pesetas; by mid-2002, these had been entirely replaced by euros.

FAQs

Is the euro used everywhere in the EU?
No. Only 20 out of 27 EU countries use the euro. Others, including Sweden, Hungary and Poland, still use their own national currencies.

Did the UK ever plan to adopt the euro?
Yes, under Tony Blair’s government, the UK considered euro adoption in the late 1990s and early 2000s but ultimately chose not to proceed.

Are euros accepted in the UK?
Generally, no. Euros are not legal tender in the UK. However, some tourist areas, particularly in London or airports, may accept them on a discretionary basis.