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The Euro in the World

As well as serving as the currency of the euro area, the euro has a strong international presence. Currencies are the means by which wealth is stored, protected and exchanged between countries, organisations and individuals. A global currency, such as the euro, does this on a global scale. Since its introduction in 1999, it has firmly established itself as a major international currency, second only to the US dollar.

Within the euro area, the single currency, the euro, is the means by which governments, companies and individuals make and receive payments for goods and services. It is also used to store and create wealth for the future as savings and investments. However, the size, stability and strength of the euro-area economy – the world's second largest after the United States – make the euro increasingly attractive beyond its borders, too. Public and private sectors in third countries acquire and use the euro for many purposes, including for trade or as currency reserves. For this reason, today, the euro is the second most important international currency behind the US dollar. The widespread use of the euro in the international financial and monetary system demonstrates its global presence:

  • The euro is widely used, alongside the US dollar, as an important reserve currency to hold for monetary emergencies. In 2015, more than one-fifth of the global foreign exchange holdings were being held in euros.
  • The euro is also the second most actively traded currency in foreign exchange markets. It is a counterpart in around 33% of all daily transactions, globally.
  • The euro is widely used to issue government and corporate debt worldwide. In 2015, the share of euro denominated debt in the global markets was around 40%, on par with the role of the US dollar in the international debt market.
  • The euro is also gaining momentum as currency used for invoicing and paying in international trade, not only between the euro area and third countries but also between third countries. It is used as trade invoicing currency for more than 50% of all euro area imports, and for more than 65% of all euro area exports.
  • Several countries manage their currencies by linking them to the euro, which acts as an anchor or reference currency.

The status of the euro as a global currency, combined with the size and economic weight of the euro area, is leading international economic organisations, such as the IMF and the G7, increasingly to view the euro-area economy as one entity. This gives the European Union a stronger voice in the world.

To benefit from this stronger position, and to contribute effectively to international financial stability, the euro area is speaking with one voice more and more in important economic fora. This is done through close coordination between the euro-area Member States, as well as the European Central Bank and the European Commission during international economic meetings.

A number of third countries and regions are even more closely linked to the euro. The stable monetary system behind the euro makes it an attractive 'anchor' currency for them, particularly for those that have special institutional arrangements with the EU, such as preferential trade agreements. By linking their currency to the euro they bring more certainty and stability to their national economies.

The euro is also widely used in third countries and regions neighbouring the euro area, for example in South-eastern Europe, while some other countries – Andorra, Monaco, San Marino and the Vatican City – use the euro as their official currency by virtue of specific monetary agreements with the EU, and may issue their own euro coins within certain quantitative limits.