The euro (EUR) is the official currency of a majority of the member nations in the European Union (EU). The European Union was formed in order to unify European nations into a single economic block. The creation and adoption of the euro as the main or one of the main currencies in each member nation was one step towards unification. The EUR acts as a base or quote currency in many major currency pairs, including:
Like the U.S. dollar (USD), the euro also acts as a base currency for many less commonly traded and exotic currencies.
The euro made its debut on January 1, 1999. It originally functioned as a reserve currency for all of Europe as the various nations took their time phasing out their national currencies. Some member nations still have a national currency in addition to accepting the euro, but even these are pegged to the euro. For the first few years of trading, the euro was very stable and appreciated against many older currencies. The difficulties of coordinating a single currency over a network of very different countries caught up to the euro in 2010, as a Greek sovereign debt crisis drew attention to the very different political and fiscal natures of the member nations. The Greek debt crisis and similar problems in other member nations lead to the euro becoming a much more volatile currency.The European Central Bank (ECB) coordinates with the central banks of the member nations through the European System of Central Banks (ESCB) to make decision affecting the euro and the member nations (known as the Eurozone). Taken collectively, the Eurozone is larger than the U.S. economy.
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