Category Archives: Practical aspects of introducing the Euro

The euro provides numerous advantages for citizens: a single currency for euro zone countries, the same costs for both national and cross-frontier bank transfers, and a stable business environment. The process leading to the single currency started well before euro notes and coins were introduced in the first Member States in January 2002.

The introduction of euro banknotes and coins: one year on

The introduction of euro banknotes and coins: one year on

Outline of the Community (European Union) legislation about The introduction of euro banknotes and coins: one year on


These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Economic and monetary affairs > Practical aspects of introducing the euro

The introduction of euro banknotes and coins: one year on

Document or Iniciative

Commission communication: The introduction of euro banknotes and coins — one year after [COM(2002) 747 final – Official Journal C 36 of 15.02.2003].


In the very first year of its existence in cash form, the euro quickly became part of the everyday life of Europe’s citizens. Most of them feel happy with the euro. Only one in five still has difficulties.


Notes. At the beginning of January the euro-area’s central banks put 7.8 billion notes into circulation. The amount in circulation then fell, but rose again to reach 7.42 billion in October. The total value of notes in circulation reached 320.9 billion, or 4.5% of the euro area’s GDP.

The 50 note is the most common, both in number and in total value. It represents one third of the total value in circulation. In some Member States discussion arose about whether 1 and 2 notes should be introduced in addition to or as a replacement for the 1 and 2 coins. But the surveys show that 83.7% of citizens find the number of different denominations of banknotes just right (Eurobarometer survey, November 2002).

Coins. At the beginning of January the euro-area’s central banks put 40.4 billion coins into circulation. This amount dropped after mid-January, reaching 38.2 billion at the end of October. In value terms, this represents 11.9 billion. The number of coins per inhabitant varies widely among euro-area Member States, reflecting different national payment habits.

Some discussion of the usefulness of the low-value coins, especially the 1- and 2-cent coins, arose in some Member States. In Finland the law requires euro cash payments to be rounded to the nearest five cents and production and use of the 1- and 2-cent coins are therefore limited. According to the Eurobarometer poll, 53.5% of the euro-area population believes that the number of different denominations of coins is just right. The small coins also played an important role in helping to ensure that price conversion from national currency units was done correctly.

Cross-border euro flows. Euro notes and coins migrate as a result of travel, cross-border shopping and the redistribution process between national central banks, commercial banks and retailers. The mix of euro notes and coins (the origin of notes is identified by their serial number) will increase over time and probably reach an equilibrium level, but it is unclear at what pace this will happen. Some patterns are already emerging: it appears that coins of different denominations mix at different rates and that the high-value coins are more prone to migration. The number of “foreign” coins also varies from one place to another, e.g. it is different in urban and rural areas and in border regions.

Collector’s coins. The Member States have retained their right to mint euro-denominated collector’s coins that often contain precious metals and which have a nominal value and are legal tender. Unlike euro coins in circulation, collector’s coins will be legal tender only in the Member State which issued them. Their technical specifications must differ from the characteristics of “normal” coins. By the end of 2002 80 euro-denominated collector’s coins had been issued, with their face values ranging from 25 cents to 400 euros.

Medals. Medals also exist but do not have legal-tender status. To avoid confusion, they must not be denominated in euros, or bear the euro symbol or any design similar to the euro coins in circulation.

Commemorative coins. Member States may also issue euro-denominated commemorative coins. These are legal tender throughout the euro area. Their technical properties, sizes and face values correspond exactly to those of euro coins. The design on the national side may, for example, commemorate a special national event. In order to allow European citizens to familiarise themselves with the new currency and to avoid any possible confusion, Member States have agreed not to issue commemorative coins during the early years following the introduction of euro notes and coins.

Use of nickel. The 1 and 2 coins still contain a small amount of nickel, but 85% of coins are nickel-free, which is a vast improvement on national currencies. Nickel is used for security reasons, mainly in the central part of the coins, to make them less prone to counterfeiting and to allow them to be reliably identified in vending machines. Compared with the old national currencies, the 1 and 2 coins release only about half as much nickel.

Counterfeiting. The Commission and the Member States have set up a network of institutions for the fight against counterfeiting, with the participation of the European Central Bank (ECB) and Europol. Owing to the state-of-the-art security features of euro notes and coins, euro counterfeiting has remained at levels well below those for the old national currencies. In the first half of 2002 the ECB recorded only 7% of the number of counterfeit notes recorded in the same period in 2001. The number of counterfeit coins is negligible.


Calculating in euros. According to the Eurobarometer poll, 51.5% of euro-area residents have no difficulty using the euro. This result ranges from 71.7% in Ireland to 36.5% in France. 42.2% of respondents calculate mainly in euros when making purchases. Only exceptional purchases (a house or a car) are still mainly calculated in the old national currency.

Dual display of prices. The dual display of prices facilitated the changeover to the euro. The Eurobarometer poll shows that a slight majority (50.6%) no longer want shopkeepers to continue with the dual display of prices. Continued dual display is a mixed blessing. On the one hand, it helps people to adapt to the new currency but, on the other, it delays the mental conversion of the population to the euro. The Commission therefore recommends phasing out dual display by 30 June 2003 at the latest, including on bank statements.

General satisfaction. 49.7% of euro-area citizens consider themselves to be very or rather happy that the euro has become their currency, as against 38.7% who are quite unhappy or very unhappy. The figures vary significantly depending on the Member State, ranging from 84.2% who are satisfied in Luxembourg to 27.8% in Germany. More than two thirds find it easy to handle the various euro coins. An overwhelming majority (92.6%) say that they have no difficulty with the different national sides of the coins but find them a welcome source of diversity. In addition, 92.8% find the various euro notes easy to handle.

Cross-border trade and price transparency. The introduction of euro notes and coins strengthens the integration of markets in the European Union (EU) by eliminating exchange-rate risk, reducing transaction costs, and abolishing a psychological barrier to cross-border trade through price transparency. Since the changeover to the euro, 12% of European consumers are more interested in buying goods in another EU country. The attitude of companies has changed even more significantly: on average, 32% of businesses in the EU indicate that they are more interested in selling their goods abroad.


Medium- to long-term effect. The introduction of the euro will have a beneficial medium- to long-term effect on prices, as a result of much easier comparison of prices across the euro area, improved functioning of the single market and a more competitive environment, which will foster economic efficiency. This should be reflected in lower consumer prices.

Pattern of consumer prices. In January 2002, when euro notes and coins were introduced, overall inflation as measured by the Harmonised Index of Consumer Prices (HICP) rose noticeably, from 2% in December to 2.7% in January. It subsequently fell to 1.8% by June, the lowest in more than two and a half years.

Possible impact of the euro changeover on inflation. Eurostat published estimates of the inflationary impact of the changeover to euro cash on three occasions. Most of the observed inflation could be explained by factors not linked to the euro, such as normal inflation patterns, bad weather affecting fruit and vegetable prices, increased energy prices, increases in administered prices and taxes. According to these studies, this left a range of 0 to 0.2 percentage point that could be attributed to the changeover to the euro.

However, the studies also point to significant price jumps in the services sector (hotels, repairs, haircuts, etc.). For example, prices in the cafe and restaurant sector recorded a year-on-year increase of 4.3%.

Actual and perceived inflation. Many consumers associate the changeover with a general rise in prices. According to the November 2002 Eurobarometer survey, 84.4% of respondents thought that prices had been converted to the detriment of consumers, while 10.9% thought that prices had been rounded up and down equally. There are several explanations for the discrepancy between actual and perceived inflation.

First, consumers tend to form their perception about inflation on the basis of frequently bought goods and services (cafes, restaurants, repairs, haircuts, newspapers, etc.) and it was these goods and services which registered unusually large price increases following the changeover. Prices for other goods and services have recorded smaller rises or have even been falling (computers, cameras, etc.). These developments can offset one another in a comprehensive index like the HICP.

A second reason might be “menu costs”. These are the costs of changing prices, and this factor could have led to an unusually high proportion of firms changing prices at the turn of the year. If such price adjustments involved upward rounding and concerned the items used by consumers to form their perception, then the discrepancy between actual and perceived inflation does not come as a surprise.


Banking industry. The introduction of the euro seems to have slightly changed customer behaviour with regard to the choice of means of payment. According to the available statistics, payments by credit card, debit card or electronic purse rose significantly in 2002. It is not possible to clearly isolate the euro’s effect on the general increase in the use of such payment instruments in recent years. The withdrawal of the eurocheque system contributed to these developments.

Cash amounts withdrawn at automatic teller machines (ATMs) have increased in a number of countries. This can be explained by the new banknote denominations and rounding effects.

With regard to cross-border withdrawals, the picture is diverse. Some Member States report an increase in such transactions, others a drop. This is because monetary union allows citizens to travel abroad with cash. Moreover, since 1 July 2002, the EU Regulation on cross-border payments (BG) (CS) (ET) (GA) (LV) (LT) (HU) (MT) (PL) (RO) (SK) (SL) has required charges for cross-border withdrawals to be the same as for national withdrawals.

As regards dual display of amounts, notably on account statements, many banks have continued this practice during 2002 and are considering extending it into 2003.

Retail sector. The retail sector played an important role during the changeover by distributing euro notes and coins and withdrawing the old national currencies. The dual display of prices greatly contributed to facilitating the changeover to the new currency, with many retailers deciding to continue this service throughout 2002.

Cash-in-transit sector. The CIT (cash-in-transit) sector played a key role in the changeover to the euro. Difficulties continue to hamper the transfer of cash from one country to another since the relevant rules have not yet been harmonised. The cash centres responsible for counting and sorting cash were under heavy pressure for several months.

Vending industry. Although the vending industry tried to adapt its vending machines as early as possible, some operators indicated temporary turnover losses at the beginning of the year. Cash-based machines, accounting for the vast majority of all vending machines, presented the biggest challenge. Operators frequently decided to replace their validation mechanisms, which represented a significant investment. It was easier to adapt electronic-purse systems.

Automatic validation of coins. As regards the validation of euro coins, whatever their origin, this posed no problem for the machines since the coins meet the demanding requirements of modern validation. Typically, vending machines accept all coin denominations except the 1- and 2-cent coins. Prices are generally rounded to the nearest 5 cents and price adjustments in both directions were observed.


It appears that the use of the euro has been increasing, particularly in European countries outside the euro area. In other continents its use is mostly confined to tourist areas.

Situation in Denmark, Sweden and the United Kingdom. A majority of European citizens outside the euro area have already held euro notes or coins in their hand, while many people have noticed products in their country labelled in euros. In Denmark, businesses are prepared to accept cash payments in euros and 13% even practice dual pricing. In Sweden a large number of shops, hotels and restaurants accept euro cash payments, especially along the border with Finland. The Swedish town of Haparanda has even decided to adopt the euro as the currency of payment. Prices are displayed in Swedish kronor and in euros, and the town’s budget is presented in the two currencies. The Swedish Government has set the date of 14 September 2003 for a referendum on entering the third stage of economic and monetary union (EMU). In the United Kingdom, especially in London and tourist areas, the euro is sometimes accepted for payments and dual pricing is practised occasionally.

Candidate countries. The introduction of euro cash has had some impact in the candidate countries as well. Ultimately, these countries are set to adopt the euro as their national currency. Shops, hotels and restaurants in most of them accept euros and in tourist areas prices are often displayed in euros. The use of the euro is most widespread in Bulgaria and Turkey, where it can be considered a parallel currency, together with the US dollar.

Other European countries. The Community has concluded agreements with Monaco, San Marino and the Vatican City authorising them to issue a certain quantity of euro coins. However, they are not authorised to issue euro notes. In Andorra the euro is circulating as the means of payment in place of the French franc and the Spanish peseta, as the country does not have a national currency. The euro is also used for payments in Kosovo and Montenegro, where it has replaced the German mark. In many countries, especially in the Balkans and eastern Europe, the euro as well as the US dollar are commonly used for transactions.

Africa. The euro is important in transactions in countries where the domestic currency is linked to the euro by a fixed exchange rate regime. This is the case in all countries belonging to the CFA zone (the Central African Economic and Monetary Union and the West African Economic and Monetary Union), as well as in Cape Verde and Comoros.

America. The entire American continent is strongly US-dollar-oriented and the introduction of euro cash has had only a limited impact. In the French overseas departments and territories (French Guiana, Guadeloupe, Martinique, etc.) the euro is the official currency. In the Dominican Republic, Cuba and Surinam payments in euros are possible, especially in tourist areas.

Asia and Oceania. In the Middle East the euro has had a very limited impact. Only in Israel is the use of the euro somewhat more common. In Asia the introduction of the euro has had a more significant impact. In Thailand, South Korea and Laos the euro is widely accepted in shops, restaurants and hotels. However, the US dollar remains predominant in international transactions. In Oceania, on the other hand, the euro is not yet accepted as a means of payment, except in the French territories in the region. In Australia and New Zealand the euro is seen as an alternative to the US dollar on international markets.


The euro area in the world economy – Developments in the first three years

The euro area in the world economy – Developments in the first three years

Outline of the Community (European Union) legislation about The euro area in the world economy – Developments in the first three years


These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Economic and monetary affairs > Practical aspects of introducing the euro

The euro area in the world economy – Developments in the first three years

Document or Iniciative

Commission communication “The euro area in the world economy – Developments in the first three years” [COM(2002) 332 final – Not published in the Official Journal].


The third stage of economic and monetary union (EMU) started on 1 January 1999. Three years later, the euro became a tangible reality as notes and coins were put into circulation. Completion of EMU is an historic event with repercussions that are profoundly re-shaping the economies of the Member States of the euro area.


Economic growth. After growing by an average of 3% during the first two years of EMU, the euro-area economy slowed down briefly in 2001 as a result of a number of factors including the hike in oil prices, the bursting of the speculative bubble on share markets and the events of 11 September.

Labour market. The situation on the labour market has improved in the last three years of the single currency. Some 6 million jobs have been created and this trend has even continued during the economic slowdown. The unemployment rate in the euro area fell to 8.3% in 2001 under the impact of structural reforms, wage restraint and economic growth.

Inflation. With inflation running at a subdued level of 1.1% in 1999, consumer prices rose, touching 2.5% in 2001 as a result of the hike in oil prices and the weakness of the euro against the US dollar. The increase in food prices caused by the BSE scare and the outbreak of foot-and-mouth disease contributed to this development.

Exchange rate. Following its launch on 1 January 1999, the euro fell by more than 20% against the US dollar but then regained some 10%. It is perceived as being under-valued. This has placed the euro-area economy in a strong position vis-à-vis its competitors, as the rise in exports and its positive contribution to gross domestic product (GDP) show.

Current-account balance and competitiveness. The euro-area’s current-account balance continued to improve in 2001 to show a small surplus. The competitiveness situation varies between Member States: in the first three years of EMU, Germany, Greece and Austria saw an improvement. Fiscal policy and structural reforms remain the only ways of preventing problems relating to competitiveness and the current-account balance from accumulating.


Stability and Growth Pact. The Stability and Growth Pact sets the objective of public finance consolidation. The Member States have committed themselves to achieving budget surpluses by 2004. After 1999 the improvement in budgetary positions lost some momentum and the euro area’s budget deficit actually increased in 2001. There are still two main challenges on the fiscal policy front: eliminating fiscal imbalances in order to cope with normal cyclical fluctuations and preparing European countries for population ageing by reducing societies’ aggregate level of indebtedness.

Monetary policy. Monetary policy is now entrusted to the European Central Bank (ECB), whose primary objective, laid down by the Treaty, is price stability. According to the ECB, this stability is achieved when inflation remains below 2%. Monetary policy is based on two pillars: The first is money supply, with M3 being set at 4.5% by the ECB, while the second comprises numerous economic indicators such as cost and price indices, the exchange rate and real-economy indicators.

Interest rates. The ECB raised interest rates on several occasions in 2000 and 2001 on account of the inflationary pressures engendered by the hike in oil prices and the euro’s depreciation against the dollar. However, following developments in the world economy in 2001 and in the aftermath of 11 September, the ECB reacted quickly and lowered interest rates.

Economic policy coordination. The central element of economic policy coordination is the broad economic policy guidelines (BEPGs), which are the annual guidelines addressed to Member States by the Council of Ministers. They provide guidance with regard to both the macroeconomic and the structural spheres. The objective is to improve the EU’s economic growth potential and productivity.

The Eurogroup. The euro area has set up another coordination forum, the Eurogroup, which brings together the economics and finance ministers of the Member States that have adopted the euro. Their informal meetings take place on the eve of meetings within the Council of Ministers (“Ecofin”) and allow a frank discussion of EMU-related issues.


EMU makes more evident the link between wage and employment trends. A loss of competitiveness is inevitable where the option of an exchange-rate adjustment is no longer available. Wage developments in one country in the euro area have repercussions on the area as a whole, notably via the inflation risk. The single currency increases price transparency and facilitates comparisons that may lead to “wage imitation”.

Aggregate wage developments. The fight against inflation in Europe has affected wages as wage increases are indexed to prices. The dispersion of wage growth between countries has also diminished significantly over the past decade, but it is still pronounced, and this may be justified by different productivity levels.

Unemployment rate. Despite a marked reduction in unemployment in recent years, there are few signs of a significant re-acceleration of labour cost growth in the euro area. Real wage moderation has prevailed in almost all countries of the euro area. This has borne fruit and contributed to the dynamism in job creation. The unemployment rate has fallen from 11.5% to 8.5%. The bulk of this improvement is due to a decline in structural unemployment. It is to be noted that all the major economies of the euro area still have relatively high structural unemployment.

Social pacts. In a number of countries social pacts have helped create a favourable climate by setting in train negotiations between the public authorities and the social partners, thereby helping to sustain wage moderation. The risk of conflict between companies and their workforces is much lower. Wage flexibility has become more important for the smooth functioning of EMU. Differentiated agreements or some measure of decentralisation, e.g. in the form of “opening clauses”, which take account of regional conditions or the conditions in the sector concerned or in the company concerned, have increased this flexibility.


Investment potential. The euro has clearly boosted investment potential in the euro area. First, it has eliminated the exchange-rate risk between twelve markets and has fostered competition within this integrated market. Second, financing conditions for firms have improved thanks to the faster integration of financial markets. EMU should also act as a catalyst for structural reforms in Member States, in particular on labour markets. Lastly, it has had a positive effect on interest rates via the policy of consolidating public finances.

Public and private investment. As a result of the privatisation policies pursued in the 1990s, the share of public investment in GDP has declined continuously. By contrast, business investment, in particular in information and communication technologies (ITC), has risen in recent years. The variation of investment rates between countries has been reduced considerably in the last ten years, suggesting convergence between the countries of the euro area. Since 1999, however, dispersion in investment rates has increased slightly, to some extent on account of more buoyant investment in the countries catching up.

Foreign direct investment. Foreign direct investment (FDI) was facilitated throughout the 1990s by the removal of numerous barriers as part of the process of European integration. Introduction of the euro furthered this development by eliminating exchange-rate variability and risks. Flows of FDI from and to the euro area have increased significantly, largely on account of the global expansion of firms and the associated mergers and acquisitions.

Effects of EMU. Exchange-rate volatility is a thing of the past. Thanks to policies of budgetary consolidation, short-term and long-term interest rates have been reduced. Financial, labour and product markets are expected to become even more flexible, enabling the euro area to improve investment conditions. A link exists between restrictive regulations and a poor investment rate. The euro area could, therefore, make the most of the opportunities afforded by EMU. Higher investment leads to enhanced growth potential in the euro area. This is particularly important if the adverse effects on long-term growth, such as the demographic outlook, are taken into account.


Overall developments. There has been a visible acceleration in the integration of financial markets in the wake of globalisation but also following the creation of a common regulatory framework and the changeover to the euro. The financial sector is experiencing a phase of rapid structural change, with integration being accompanied by general expansion and heightened competition. The exchange rate risk has disappeared, as have the costs resulting from fragmentation of the system. Market liberalisation and the introduction of the euro should facilitate business financing via calls on capital markets rather than bank financing.

Money markets. Market integration varies between segments. In the market for interbank deposits integration is virtually complete and the derivatives market is highly integrated. Against this, the secured money-market segments (private repurchase agreements, treasury bills, commercial paper and certificates of deposit, for example) remain less integrated. This state of affairs largely reflects the continuing differences between Member States’ legislation. The Collateral Directive should improve this situation.

Bond markets. With the introduction of the euro, domestic bond markets have become integrated, resulting in a substantially more homogeneous euro-denominated bond market. Greater liquidity has been reflected in higher issuance volumes. Private-sector issuance has risen sharply to the detriment of sovereign issuance as a result of the policy of fiscal retrenchment. The growing number of mergers and acquisitions as well as UMTS auctions, often financed by bond issues, have contributed to the expansion of this segment of the financial market.

Government bonds. Sovereign issuance still accounts for some 40% of total issuance. There has been marked convergence in yields between Member States. Liquidity on this market is still, however, limited as government bonds are issued by twelve separate agencies with different issuance, strategies, procedures and instruments. Overall, the euro has emerged as the second most important currency for international bond issuance, after the US dollar.

Equity markets. The introduction of the euro has stimulated demand for cross-border equity investment in euros. Investors appear to be moving increasingly towards sector-based investments, to the detriment of purely country-based investments. The changeover to the euro has also been a factor in stimulating activity in the new-economy stock markets. The response of stock exchanges in Europe to European integration has been to adopt regrouping and merger strategies.

Venture capital. Venture capital often plays a key role in the initial stages of the lifecycle of a firm. The European Union has attempted to improve access to such financing for firms, including via the Risk Capital Action Plan (RCAP). European risk capital markets remain fragmented, with the bulk of investment being undertaken domestically. This partly reflects the continuing differences in regulatory, tax and legal infrastructures in the Member States. The bursting of the stock market bubble for technological companies led to a significant fall in venture capital investment.

Financial services. The market in Europe for corporate financial services is increasingly open to global competition. Banks have responded by restructuring and reorienting activities away from traditional bank lending towards “investment banking”-style activities, which consist in creating and selling new financial products, advising clients or structuring mergers and acquisitions. Consolidation has taken place mainly within national boundaries, where there has been an increase in industry concentration. Legal differences make a pan-European product range impractical at present.

The challenges ahead. The euro is one of the main factors in speeding up integration. Financial market integration has not yet been completed and must be continued in order to take advantage of the opportunities offered by integration. Savers and investors would benefit from broader choices at lower transaction costs. This translates into higher productivity and, consequently, higher economic growth. This is why successive European Council meetings have established the integration of financial markets as a priority of economic reform. The Financial Services Action Plan (FCAP), a package of 42 initiatives, should be implemented between now and 2005. The date for implementation of the Risk Capital Action Plan (RCAP) has been set for 2003.


The US dollar is still the leading international currency, but the euro has become the world’s second most important currency thanks to the size of the euro-area economy and to its stability, which reflects sound economic fundamentals.

International use. Prior to the introduction of euro notes and coins in 2002, the share of the euro in the invoicing of international transactions was estimated to be between 15% and 17% of the total. The US dollar remains the dominant currency for such transactions. The role of the euro as a payment currency should expand, notably at regional level. Use of the single currency for international payments has increased in the first three years and is expected to increase further following the introduction of notes and coins. The euro has become the second most important financing or investment currency. It accounts for just under 34% of transactions in these areas, and this also reflects the historically low interest rates in the euro area.

Anchor currency. Over fifty countries have tied their currencies to the euro via, among other things, managed exchange-rate arrangements or a currency board. They are located mainly in Europe and Africa, the main motivating factors being commercial and financial links and the EU accession process. The euro is also used as an intervention currency, this being closely linked to its role as an anchor currency. Most interventions are carried out under the new exchange-rate mechanism (ERM II). At present, only Denmark has tied its currency to the euro under this mechanism. Lastly, the euro is used as a store of value and is the second most important reserve currency held by central banks. In 2000 the US dollar accounted for 68% of all foreign-exchange reserves. The share of the euro has remain virtually unchanged in recent years.

Candidate countries. The candidate countries will have to take over the Community acquis and are required to participate in EMU. At the outset, they will benefit from a Treaty derogation until such time as they satisfy the convergence criteria. Before adopting the euro, they must have participated in ERM II for two years.

Global coordination. The single monetary and exchange-rate policies are the exclusive competence of the Community. As regards internal policy coordination, the Council (in this case, the Member States that have adopted the euro) decides on Community representation at international level. The Eurogroup defines common positions. Externally, as regards the International Monetary Fund (IMF) or the G7, for example, no decision has yet been taken by the Council of Ministers. The European Central Bank has been granted observer status at the IMF and within certain G7 working groups. EMU is, therefore, still in the making as regards the external side.

Review of the introduction of euro notes and coins

Review of the introduction of euro notes and coins

Outline of the Community (European Union) legislation about Review of the introduction of euro notes and coins


These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Economic and monetary affairs > Practical aspects of introducing the euro

Review of the introduction of euro notes and coins

Document or Iniciative

Commission Communication to the European Council: Review of the introduction of euro notes and coins [COM(2002) 124 final – Not published in the Official Journal].


The introduction of euro notes and coins was the largest-ever currency-changeover operation. More than 15 billion notes and 51 billion coins were produced and exchanged against 9 billion national currency notes and 107 billion national-currency coins. The operation, which took place essentially between the beginning of September 2001 and the end of February 2002, went smoothly and can, therefore, be regarded as a major success.

This major success was due in part to perfect coordination between the Community institutions. The Commission, through its recommendations and proposals, gave a strong and coordinated boost to the measures taken by the participating Member States. It set up networks comprising the heads of the national administration task forces and the communication directors in the finance ministries. It also acted as an information point. For its part, the European Central Bank (ECB) effectively coordinated the measures taken by the national central banks. To ensure the smooth introduction of the euro, action was taken to mobilise financial institutions, sales outlets, the police, transport firms and, above all, the public in Europe, whose cooperation was essential. The Commission, the different ministries involved, banks and trade associations spent over half a billion euros on information campaigns for the general public between 1996 and 2001.

The introduction of euro notes and coins and the withdrawal of national currencies took place more rapidly than initially expected thanks to good organisation. By the end of the first week in January euro payments accounted for most cash payments and by the end of the second week very little national currency remained in circulation.

The operations

Frontloading and sub-frontloading operations. As of September 2001 banks and sales outlets were frontloaded and sub-frontloaded with the first notes and coins. Member States were free to decide when to begin the operations. By 31 December 132.1 billion euro notes, equivalent to 21 % of total production, were distributed to banks. More than 73 % of the total production of coins was distributed to banks between September and December, although there were differences between Member States. All the operations went smoothly.

Frontloading. The sub-frontloading of sales outlets with notes and coins began in September in a number of countries. The opportunity given to sales outlets to be sub-frontloaded with small quantities so that their payout-desk staff could receive training was not widely taken up. Overall, participation by the 2.8 million sales outlets in the euro area in sub-frontloading operations was very uneven. While virtually all traders were sub-frontloaded in Ireland, the figure in Italy was below 10 %. On average, banks sub-frontloaded only 9 % (in value terms) of the notes they received. The results were slightly better for coins. It is interesting to note that the participating countries with the best results were those that offered incentives and/or took steps to alleviate logistical constraints (Germany, Ireland, the Netherlands and Austria).

Coins. In order to acquaint themselves with the new coins, individuals were able to buy from mid-December small kits containing coins the value of which varied between Member States. The kits were a great success and the general public bought them with great enthusiasm. Over 150 million kits were sold. Contrary to fears, individuals fully observed the ban on using coins before 1 January 2002. They were only a few isolated cases involving vending machines.

In all, 6 billion notes (40 % of production) and 37.5 billion coins (73.5 % of production) were distributed via frontloading. The success of frontloading made a decisive contribution to the rapid take-up of the euro at the beginning of 2002.

Distribution of notes and coins in January 2002. The new notes and coins were distributed primarily via withdrawals from automated teller machines (ATMs), via withdrawals at financial institutions and via change given in sales outlets. On average, 80 % of ATMs had been converted to the euro by 1 January 2002. By 4 January virtually all ATMs were dispensing only euros. Technically, the operation went smoothly, except for some problems in Italy and Finland. The number of withdrawals was very high during the first week, reflecting the enthusiasm and curiosity of individuals, and then after two weeks started to fall back to normal levels. No serious supply problems were encountered at ATMs.

Exchange od old national currencies. During the first ten days of January, consumers flocked to their bank to withdraw euros or to exchange their old national currency (“legacy currency”), causing queues to form. In some countries the volume of euros supplied to individuals at counters was higher than that supplied via ATMS. In Germany, Spain and Luxembourg banks were even open on 1 January.

Role of traders. In order to give change, traders required a much larger cash float since they were unable to give change using the legacy currency. Generally speaking, sales outlets complied with this rule. The situation regarding the distribution of notes and coins to sales outlets was strained during the first week on account of the large number of consumers using large-denomination notes for their purchases. Longer queues were inevitable. The 7 585 cash-transport vehicles in service in the euro area thus operated at full stretch during that time. Generally speaking, there were only isolated shortages of certain denominations of notes and coins. Member States’ central banks provided mutual assistance when that was needed. For instance, France acquired 100 million 50 cent coins from Spain and the Bank of Portugal received several million notes of different denominations from the Eurosystem.

The assessment is, therefore, a positive one since the combination of these three channels enabled the single currency to be distributed very rapidly to the 300 million inhabitants of the euro area.

Use of the euro for cash payments. In the first few days consumers tended to spend their legacy currencies before using the euro. The legacy currencies swiftly disappeared from circulation as traders and banks, which had a “mopping-up” effect, gave change in euros. The share of the euro in cash payments averaged some 20 % by the end of 2 January, 55 % by the end of 4 January and 95 % by 16 January. The total volume of cash payments was high in the first two weeks of January and then began to return to normal as the legacy currencies were withdrawn from circulation. All the other adaptations such as the conversion of accounts, cards and electronic payment terminals were satisfactory. Ireland and the Netherlands were the countries that were quickest to change over to euro payments and virtually all payments were effected in euros by 8-10 January. Other countries including Belgium, Spain and France only just exceeded the 70 % mark by that time.

Recovery of legacy currencies. Legacy currencies were returned for the most part in a matter of weeks. One third of the notes in circulation were recovered by 31 December 2001 and the 75 % mark was exceeded on 8 February. The actual circulation of legacy currencies was much lower: bottlenecks at temporary storage depots led to delays in counting notes at central banks.

Recovery of coins. The withdrawal of coins was even slower: by 22 February only 27.9 % of national coins (in value terms) had been recovered as a result of coins being held in storage pending counting. With the help of publicity campaigns, central banks withdrew before the end of 2001 around 9 % of coins in circulation. It is now clear that some notes and, in particular, a large number of coins will never be recovered, having been lost or hoarded by collectors. In most Member States the period for recovering legacy currencies is limited (see table below).

Other matters associated with the introduction of euro notes and coins

Price stability. According to consumer surveys, a large proportion of the public (67 %) felt that more often than not prices had been rounded upwards on the occasion of the changeover to the euro, while 28 % felt that price increases and decreases had balanced one another out. Only 1.9 % took the view that prices had been rounded downwards. The inflation figures published by Eurostat show that, although annual inflation rose from 2 % to 2.7 % between December and January, this increase was attributable to several factors not linked to the euro, such as increases in certain taxes, higher oil prices and higher prices for fruit and vegetables. According to Eurostat, the currency changeover accounted for only between 0 % and 0.16 % of the monthly price trend. Voluntary price stability agreements were generally complied with.

Security. Despite an unprecedented number of cash-transport operations and a doubling in the number of notes and coins in circulation, the number of incidents was well below normal. Between September and December only 27 robberies of euro notes and 17 robberies of euro coins were reported. The effectiveness of security measures was very satisfactory.

Production quality. The quality control of the production of euro notes and coins was very effective. Only a few cases of defect were detected and the probability of receiving one of these defective euros is extremely small. The presence of nickel in 1-euro and 2-euro coins had been criticised but the tests carried out showed that there was no allergic reaction.

Counterfeiting. Euro notes and coins are better protected against counterfeiting than any of the old national currencies. Only some fifty or so forgeries of notes were detected in January, an exceptionally low figure, and only two poor-quality forgeries of coins were identified.

Conversion of vending machines. The adaptation of vending machines proceeded less smoothly. Many vending-machine operators underestimated the speed at which the new currency would replace the legacy currencies and suffered from declining turnover because some of their machines had not been converted. The time lost could not be made up rapidly because of shortages of trained staff. There were a few cases where euro coins produced in other participating countries were rejected because equipment had not been properly adjusted.

Introduction of the euro in third countries. In December 2001 26 central banks and financial institutions outside the euro area had frontloaded a total of some 4 billion euros in order to ensure that euro notes would be available in the first days of January. A large number of national notes, in particular German notes, were hoarded or used in central and eastern Europe. They began to be returned in 2001.

Public reactions

The public’s assessment of the effectiveness of preparations was largely positive: on average, three quarters of the public considered themselves to have been well or very well prepared on 1 January 2002. A majority considered that the early changeover of bank accounts to the euro helped them to become acquainted with the new currency. When it came to handling euros, one out of every five people stated at the end of January that the changeover was still posing difficulties (only one out of every 35 people claimed to be experiencing many difficulties). Most people had no problem recognising or handling the different euro coins, with Ireland being the one exception.

Thinking in terms of the euro. The transition to the euro did not alter the purchasing behaviour of 77 % of the public. Many consumers still had difficulty in memorising euro prices. Most of them continued to think in terms of the legacy currency, compared with a minority of 28 % that already think in terms of the euro. However, people used calculators and converters only to a modest degree. A majority felt that dual pricing should cease at the end of the period of dual circulation. The figures do though differ significantly between countries.

General satisfaction. Generally speaking, 60 % of people considered that the changeover to the euro would bring more advantages than disadvantages. This view was even more strongly shared by the under-24s. Moreover, a large majority said they felt more European thanks to the euro. Four out of five individuals felt that the changeover to the euro went well or very well. Lastly, over two thirds of the general public were happy that the euro was their currency and it was only in Germany, Greece and Austria that there was a higher proportion of dissatisfied individuals.

Preparation of small and medium-sized enterprises (SMEs)

Overall, the concerns that SMEs may have been poorly prepared were not justified. Even those that were slow to prepare seemed to have managed to switch to the single currency at the last minute. At the time of the changeover, 95 % of SMEs already kept accounts in euros. Most of them said that they did not encounter any difficulties in switching to the euro. A few problems were encountered with IT systems, the setting or display of prices and invoicing. Overall, there were no unpleasant surprises, with 95 % of SMEs feeling that the changeover went as planned or even better than planned. One enterprise in five expected the euro to have a positive impact on their business.

The changeover in figures: main national provisions

Exchange at banks after legal tender Redemption by central banks after legal tender
Belgium 31/12/2002 Notes: Indefinitely
Coins: 31/12/2004
Germany 28/02/2002 Indefinitely
Greece to be decided by each bank Notes: 01/03/2012
Coins: 01/03/2004
Spain 30/06/2002 Indefinitely
France 30/06/2002 Notes: 17/02/2012
Coins: 17/02/2005
Ireland to be decided Indefinitely
Italy 30/06/2002 01/03/2012
Luxembourg 30/06/2002 13/12/2004
Netherlands 31/12/2002 Notes: 01/01/2032
Coins: 01/07/2007
Austria 28/02/2002 Indefinitely
Portugal 30/06/2002 Notes: 30/12/2022
Coins: 30/12/2002
Finland to be decided by each bank 29/02/2012

Information and communication strategy on the euro and EMU

Information and communication strategy on the euro and EMU

Outline of the Community (European Union) legislation about Information and communication strategy on the euro and EMU


These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Economic and monetary affairs > Practical aspects of introducing the euro

Information and communication strategy on the euro and EMU

Document or Iniciative

Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions on the implementation of an information and communication strategy on the euro and the Economic and Monetary Union [COM(2004) 552 final – not published in the Official Journal].


Long before the introduction of the euro as the single currency on 1 January 2002, the Commission was aware of the importance of an information strategy on the euro. This communication outlines the strategy to be implemented two years after the introduction of the euro, in particular, with a view to:

  • the enlargement of the European Union on 1 May 2004 which will expand the euro area;
  • the need to consolidate the single currency by increasing public acceptance;
  • greater positive perception by third countries of the EU and its economic role.

Information and communication with European citizens

The information strategy on the euro is part of the “Information and Communication Strategy of the European Union” [COM (2002)350 – not published in the Official Journal] and its implementation [COM (2004) 196 – not published in the Official Journal. It is part the overall approach to Member States’ communication policy and it must add a tangible European dimension to the democratic debate in the Member States.

The aim is to increase public knowledge within and outside the EU on the working of EMU and to contribute to a smooth changeover in the Member States which adopt the euro. The Commission feels it will achieve its objectives by:

  • creating public awareness and understanding of the requirements for EMU to function, for example sound public finance and coordination of economic policies;
  • providing neutral and factual information that will enhance the citizens’ understanding of the euro;
  • contributing to a smooth changeover in the Member States which adopt the euro;
  • providing the media, economic agents and policy-makers in third countries with the information they need concerning EMU.

Role of the key players: Member States and European institutions

The Commission bases its communication strategy on decentralised activities involving the sources of information closest to the public. The information activities must reflect the culture, language and concerns of the citizens. The Commission feels that it is mainly for the Member States to define and carry out the activities because they are the best placed to create information tools and products and to encourage the regional and local authorities, public interest services and civil society networks to relay information.

The Commission’s role will consist of:

  • ensuring consistency of the messages;
  • stimulating and coordinating the communication activities of the Member States and civil society organisations;
  • proposing a range of information tools and implementing specific actions;
  • organising and supporting transnational communication initiatives and information activities in third countries;
  • managing its own centralised activities such as conferences, information products and public relations, regular assessments, etc…

The Commission, Member States and the European Central Bank (ECB) will coordinate their communication activities. Partnerships between the Commission and Member States, which are allocated a considerable part of the Community budget, can be concluded in one of three forms:

  • Strategic partnerships: the Member State and the Commission agree on the details of a communication programme and the division of tasks between the two partners. The two partners each pay the cost of the activities they undertake and thus, there is no direct financial link between the Commission and the Member State;
  • Management partnerships: the Member State manages the whole campaign on behalf of the Commission in accordance with the EU’s Financial Regulation;
  • Ad hoc partnerships: the Commission contributes to expenses incurred by the Member State.

Interinstitutional cooperation between the Commission, the Council and the Parliament will be organised by an interinstitutional group on information.

In order to facilitate the setting up of partnerships with the new Member States, the Commission makes provision in this Communication for dividing the latter into groups according to progress made towards EMU as assessed on the basis of the convergence reports. The adoption of the single currency by a country following accession implies that detailed conditions will be met, and the Commission will adapt its communication strategy to the timetable for the future introduction of the euro.

The European institutions and the new Member States must agree on objectives, communication strategies, target groups, messages, media, etc. as well as financial aspects and monitoring. The Commission makes provision for twinning programmes between the old and new Member States, the use of information relays, the organisation of conferences and seminars etc.

Meeting the public’s needs

Since 1 January 2002, the Commission has organised opinion polls on the introduction of euro coins and notes. The following conclusions emerged:

  • the euro area: four years after the introduction of euro coins and notes, European citizens are now largely at ease with their new currency. However, the Commission feels that additional efforts must be made to explain the architecture of EMU, the reasons why certain economic policies are necessary and the benefits deriving from the single currency;
  • Denmark and the United Kingdom: the two countries enjoy an “opt-out”. In these countries, the Commission bases its communication policy on the fact that it is for the national governments to decide whether or not to apply to adopt the euro;
  • Sweden: following the no vote in the referendum on the euro in September 2003, the Swedish Government is not planning any specific information activities. The Commission’s Representation in Sweden will provide brochures and practical information.
  • in the new Member States: the question of participation in the euro and EMU is directly linked to accession, and seen as a consequence. The Commission encourages the implementation of a communication strategy similar to the one adopted previously for the introduction of the euro. During the first phase, the changeover to the euro is placed in the broader context of the history of European integration. In the second phase, governments, banks and large undertakings will be encouraged to start preparing themselves quickly for the introduction of the single currency. In the last phase, information campaigns will become more intensive and larger-scale. They will target the general public and be adapted to the specific needs of different population groups e.g. the elderly, young people, the disabled, the economically disadvantaged, etc. Opinion polls show that citizens have mixed feelings about the introduction of the euro in their countries. However, respondents are aware of the practical advantages of the euro but they wish to be more fully informed on the matter. Extensive information campaigns should overcome hesitations in connection with the euro.
  • Non-member countries: a survey [PDF ] conducted by the Commission via its delegations shows a growing awareness of the euro. The Commission is therefore basing its communication policy on the stability of EMU and the benefits of the euro and the use of the euro internationally, etc.

The Commission is aware that the general public needs up-to-date information. The communication strategy is both a multimedia and multidisciplinary instrument: publications on paper, leaflets, Internet, CD-ROM, local information tools (info-bus, exhibitions, information evenings etc.) conferences, seminars, television, radio, etc.


Five years of Euro banknotes and coins

Five years of Euro banknotes and coins

Outline of the Community (European Union) legislation about Five years of Euro banknotes and coins


These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Economic and monetary affairs > Practical aspects of introducing the euro

Five years of Euro banknotes and coins

Document or Iniciative

Communication of 28 December 2006 from the Commission to the Council, the European Parliament, the European Economic and Social Committee, the Committee of the Regions and the European Central Bank: Five years of euro banknotes and coins [COM(2006) 862 final – Not published in the Official Journal].


The European Commission reviews the introduction on 1 January 2002 of euro banknotes and coins into the daily life of citizens.

Informing citizens about the euro remains crucial

Surveys carried out among citizens show a lack of general information about the advantages of the euro, with insufficient information and even misconceptions remaining very widespread. The European Commission believes that renewed efforts are required to inform the general public about the euro, as the following still remain:

  • lack of awareness of some of the euro’s benefits: only a quarter (23 %) of euro-area citizens know that no extra charges apply when withdrawing money with a bank card in another euro-area country, or when paying with a bank card (27 %) or executing a bank transfer (16 %) within the euro area;
  • firmly-anchored misconceptions: a large majority of respondents in the euro area believe that the euro contributed to an increase in prices. In the ten Member States which joined the European Union in May 2004, 45 % of respondents believe that the euro will lead to higher inflation. This stands at odds with the ECB’s records, which show that annual inflation in the euro area has remained below 2.4 % since the introduction of the euro in 1999;
  • dual display of prices: for day-to-day purchases, a clear majority of citizens (57 %) calculate in euros, while one in five still count in their former national currency. However, for high-value purchases, such as a car or a house, a large proportion of citizens (40 %) calculate using their former national currency. The Commission repeats its recommendation of 2002 that any remaining dual display practice in the euro area – except in Slovenia – should be discontinued as soon as possible. Even if dual price display helps consumers in the early stages of the changeover to the euro, the practice becomes counterproductive if it continues for too long.

Continuous improvement of euro banknotes and coins

Euro banknotes and coins are the subject of continuous improvement in terms of their quality, reliability and user-friendliness. The European Central Bank started preparing the next series of banknotes shortly after the euro was brought into circulation, in order to ensure that the most up-to-date security features were used.

The number of counterfeit banknotes and coins that have been detected is very low compared with the numbers in circulation, and the European Commission emphasises that the number of counterfeit US-dollar banknotes is much higher.

Ensuring the coherence of the euro’s visual aspects

Euro coins have one common side, the same for all Member States in the euro area, and one national side, which differs from one Member State to another.

National side. In 2003 the Council of the European Union imposed a moratorium until the end of 2008 on changes to the national side of euro coins intended for circulation. Exceptions to this are made when a Head of State represented on a coin changes or when commemorative 2-euro coins are issued to celebrate particular events, subject to certain constraints concerning the quantity issued and how often this is done. Commemorative coins are intended for circulation, but have a different national side. To take an example, all Member States in the euro area agreed to issue a 2-euro commemorative coin to celebrate the 50th anniversary of the signing of the Treaty of Rome on 25 March 2007.

Before the moratorium expires at the end of 2008, the Council must make a new decision as to the national sides of euro circulation coins. In 2007 the European Commission will carry out a survey among euro-area citizens in order to collect people’s opinions and preferences in this respect.

As a final point, Member States are authorised to issue collectable euro coins, for example coins minted in precious metals. These coins are only legal tender in the issuing country and are not intended for circulation.

Common side. The common side of euro coins bears a map of Europe depicting the Member States of the former EU-15. Enlargement on 1 May 2004 entailed 10 new Member States joining the EU. The Council therefore decided on 7 June 2005 [PDF ] [FR] that the common sides of the 10, 20 and 50 cent coins and the 1 and 2 euro coins should be changed, so that in the future they depict all EU Member States. The smallest denominations of 1, 2 and 5 cents are not affected by this change, as they show Europe’s position on a globe.

Slovenia was the first country to introduce coins with the new common side on 1 January 2007. The twelve euro-area countries which introduced euro banknotes and coins in January 2002 are currently preparing production of the new coins. Most of them are expected to switch to the current common-side design in 2007, with a few others joining them in 2008 at the latest.

Production and storage of banknotes and coins

Euro banknote production is organised on a decentralised basis with pooling, this means that the European Central Bank (ECB) allocates banknote production on an annual basis to the euro-area national central banks. Each denomination is thus produced by a limited number of printing works and each bank is responsible for providing only one or a few denominations. This increases efficiency by achieving economies of scale.

Logistical stocks and a common strategic stock of euro banknotes, the Eurosystem Strategic Stock, ensure the continuity of banknote supply. These reserves may, for example, be used to provide the initial quantity of euro banknotes necessary for the changeover in Member States joining the euro area, as was the case in Slovenia on 1 January 2007.

The ECB aims to establish a single Eurosystem tendering procedure for the procurement of banknotes, starting at the latest in 2012.

Euro coin production falls within the competence of Member States. Decisions are therefore taken on a decentralised basis, reducing the efficiency which is gained by pooling, in particular with respect to the coordination of production and/or storage of coins. For example, one country may decide to produce extra coins while another has excess stocks of the same denomination.

The Commission suggests that possible improvements should be considered, especially concerning the 1, 2 and 5 cent coins, which represent approximately 80 % of new coin production. These coins generate little monetary income and the production costs and related expenditure (transport, packaging, etc.) are relatively high compared with their face value. Since the different national sides to some extent prevent the exchange and/or transfer of coin stocks between countries, some Member States may be prepared to envisage the possibility of using low denomination coins with a ‘standard’ national side.

Finally, the European Commission suggests that the possibility of creating a specific EU budget line for euro coinage projects and activities of common interest should be considered.

Euro used in scriptural form (1999), introduction of coins and banknotes (2002)

On 1 January 1999, the euro became the single currency of eleven Member States, followed by Greece on 1 January 2001. Between 1999 and 2001, the euro could only be used in scriptural form, for example for cheques and bank transfers. Few initially made use of this possibility and in day-to-day life the introduction of the euro as the single currency passed relatively unnoticed, as consumers in the twelve countries concerned continued to use national banknotes and coins to carry out transactions. Euro coins and banknotes were introduced into circulation in twelve Member States on 1 January 2002. Since 1 January 2007, Slovenia has been a part of the euro area.

Production and issuing of euro banknotes are the exclusive responsibility of the European Central Bank. The Member States are responsible for the production and minting of euro coins. Both euro banknotes and coins are put into circulation by the national central banks in the euro area.


Euro banknotes: denominations, specifications, reproduction, exchange and withdrawal

Euro banknotes: denominations, specifications, reproduction, exchange and withdrawal

Outline of the Community (European Union) legislation about Euro banknotes: denominations, specifications, reproduction, exchange and withdrawal


These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Economic and monetary affairs > Practical aspects of introducing the euro

Euro banknotes: denominations, specifications, reproduction, exchange and withdrawal

Document or Iniciative

Decision of the European Central Bank of 20 March 2003 on the denominations, specifications, reproduction, exchange and withdrawal of euro banknotes (ECB/2003/4).


In its Decision ECB/2003/4, the European Central Bank (ECB) establishes the rules on the technical specifications of euro banknotes. It also specifies the cases in which the reproduction of banknotes is authorised, and also the arrangements under which damaged banknotes can be exchanged.

This Decision only concerns euro banknotes. The rules on the technical specifications of euro coins are governed by Regulation (EC) No 975/98.

Denominations and technical characteristics of euro banknotes

The first series of euro banknotes comprises seven denominations: 5, 10, 20, 50, 100, 200 and 500 euros.

The technical characteristics of these banknotes are as follows:

5 euros

  • dimensions (mm): 120 x 62
  • colour: grey
  • design: classical

10 euros

  • dimensions (mm): 127 x 67
  • colour: red
  • design: romanesque

20 euros

  • dimensions (mm): 133 x 72
  • colour: blue
  • design: gothic

50 euros

  • dimensions (mm): 140 x 77
  • colour: orange
  • design: renaissance

100 euros

  • dimensions (mm): 147 x 82
  • colour: green
  • design: baroque and rococo

200 euros

  • dimensions (mm): 153 x 82
  • colour: yellow-brown
  • design: “iron and glass” architecture

500 euros

  • dimensions (mm): 160 x 82
  • colour: purple
  • design: modern 20th century architecture

The motifs on the reverse side of the banknotes are: the symbol of the EU, the name of the currency in the Roman and Greek alphabets and the initials of the ECB in their official language variants.

Reproduction of euro banknotes without risk of confusion to the public

The Decision authorises all or part of banknotes to be reproduced in certain cases, provided that there is no risk of the public mistaking the reproductions for genuine euro banknotes. The following are deemed lawful:

  • one-sided reproductions whose size is at least 125 % or at most 75 % of that of a genuine banknote;
  • two-sided reproductions whose size is at least 200 % or at most 50 % of that of a genuine banknote;
  • reproductions made of a material clearly different from the paper used for banknotes.

Reproductions which the public might mistake for genuine euro banknotes are prohibited. The Decision lays down strict criteria for intangible reproductions made available on websites, because paper printouts of those reproductions might be mistaken for genuine banknotes.

Exchange of mutilated or damaged euro banknotes

The national central banks (NCBs) exchange mutilated or damaged euro banknotes when more than half of the banknote is presented, or when half or less of the banknote is presented if the applicant can prove that the missing part has been destroyed. The exchange of mutilated or damaged banknotes is also subject to the following conditions:

  • where doubt exists as to the applicant’s legal title to the banknotes or as to their authenticity, the applicant must provide identification;
  • when ink-stained, contaminated or impregnated banknotes are presented, the applicant must provide a written explanation as to the kind of stain, contamination or impregnation;
  • when banknotes have been discoloured by an anti-theft device, they must be presented by a professional banknote-handling entity such as a credit institution or a bureau de change (Article 6(1) of Regulation (EC) No 1338/2001) and the entity must provide a written statement concerning the nature and cause of the invalidation;
  • when banknotes have been mutilated or damaged in bulk by an anti-theft device, they must be presented in sets of 100 euro banknotes, provided that the amount of banknotes presented is sufficient to form such sets.

Where NCBs know or have sufficient reason to believe that the euro banknotes have been intentionally mutilated or damaged, they must refuse to exchange the banknotes and must withhold them in order to avoid their return into circulation and prevent the applicant from presenting them to another NCB for exchange. The same applies where NCBs know or have sufficient reason to believe that a criminal offence has been committed. In that case, NCBs must present the banknotes in question to the competent authorities to initiate a criminal investigation (or to support an ongoing criminal investigation). Unless otherwise decided by the competent authorities, the banknotes will be returned to the applicant at the end of the investigation and can then be exchanged.

However, NCBs may exchange the banknotes if they consider that the applicants are bona fide or if the applicants can prove that they are bona fide. Banknotes which are mutilated or damaged to a minor degree, e.g. by having annotations or numbers placed on them will not be considered intentionally mutilated or damaged.

Withdrawal of euro banknotes

The Decision stipulates that the withdrawal of a euro banknote type or series will be regulated by a decision of the Governing Council published for general information in the Official Journal of the European Union and other media.

Replacement of previous Decisions

Decision ECB/2003/4 repeals the previous Decisions ECB/2001/7 and ECB/2001/14. References to Decisions ECB/1998/6, ECB/1999/2 and ECB/2001/14 are to be construed as references to Decision ECB/2003/4.


Act Entry into force Deadline for transposition in the Member States Official Journal

Decision ECB/2003/4


OJ L 78, 25.3.2003

Related Acts

Guideline ECB/2003/5 of the European Central Bank of 20 March 2003 on the enforcement of measures to counter non-compliant reproductions of euro banknotes and on the exchange and withdrawal of euro banknotes [Official Journal L 78, 25.3.2003].

The Guideline specifies the measures applicable to non-compliant reproductions of euro banknotes and to the exchange and withdrawal of banknotes.

Decision of the European Central Bank of 16 September 2010 on the authenticity and fitness checking and recirculation of euro banknotes ECB/2010/14 [Official Journal L 267 of 9.10.2010].

This Decision species the rules which must be complied with by the professionals responsible for checking the quality of euro banknotes and their circulation. These rules are set by the European Central Bank. In particular, they relate to the machines to be used for the authentication and circulation of banknotes. Furthermore, only banknotes in a good condition may be placed in circulation. Suspect counterfeit banknotes must be returned to the national competent authorities.

Common guidelines: the national sides of euro coins

Common guidelines: the national sides of euro coins

Outline of the Community (European Union) legislation about Common guidelines: the national sides of euro coins


These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Economic and monetary affairs > Practical aspects of introducing the euro

Common guidelines: the national sides of euro coins

As the new Member States gradually introduce the euro, the number of national sides of euro circulation coins will increase. For the national sides of both normal coins and commemorative coins, this Recommendation lays down common guidelines to strengthen the overall coherence of the euro coinage system.

Document or Iniciative

Commission Recommendation 2005/491/EC of 3 June 2005 on common guidelines for the national sides of euro circulation coins [Official Journal L 186 of 18.7.2005].


In this Recommendation, the European Commission lays down common guidelines for the national sides of euro coins. The Ecofin Council of 7 June 2005 [PDF ] welcomed these common guidelines, which were drawn up in close cooperation with the Member States.

Indicating the issuing Member State and specifying the information appearing on the national side

The national sides of all denominations of euro circulation coins must indicate the Member State issuing the coin. This may be done by indicating the name of the Member State or by an abbreviation of it.

Also, the national side should not repeat any indication of the denomination, or any parts thereof. Nor should the name of the single currency or of its subdivision appear on the national side, unless such indication stems from the use of a different alphabet.

On the other hand, the edge lettering of the two-euro coin may bear an indication of the denomination, but only if the figure “2” and/or the term “euro” is used.

Informing the other Member States about new national sides

Under the Recommendation, before the design of a new national side of euro coins is formally approved, the Member States are to inform each other of the design, including the edge letterings.

New designs are to be forwarded by the issuing Member State to the European Commission. The Commission will then inform the other Member States without delay via the relevant subcommittee of the Economic and Financial Committee. All relevant information on new national coin designs will be published in the Official Journal of the European Union.

Applying the Recommendation to normal and commemorative coins

The common guidelines apply to national sides and edge letterings of euro circulation coins. They apply to both normal and commemorative euro coins issued after the adoption of this Recommendation (on 3 June 2005).

The Recommendation is addressed to all the Member States participating in the euro as referred to in Article 1 of Regulation (EC) No 974/98.

The common guidelines also apply to the monetary agreements which the Community has signed with the Principality of Monaco, the Republic of San Marino and the Vatican City State. Under the agreements, those countries are allowed to issue certain quantities of euro coins for circulation.

Extending the euro zone

Following the enlargements of the European Union in May 2004 and in January 2007 (to 27 Member States), several of the new Member States have started to prepare themselves for adoption of the euro. These preparations include the selection of the national sides of their future euro coins.


The successful introduction of the euro in Slovenia

The successful introduction of the euro in Slovenia

Outline of the Community (European Union) legislation about The successful introduction of the euro in Slovenia


These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Economic and monetary affairs > Practical aspects of introducing the euro

The successful introduction of the euro in Slovenia

Document or Iniciative

Communication of 4 May 2007 from the Commission to the Council, the European Parliament, the European Economic and Social Committee, the Committee of the Regions and the European Central Bank – The introduction of the euro in Slovenia [COM(2007) 233 final – not published in the Official Journal].


Following the Council Decision of 11 July 2006, Slovenia introduced the single currency on 1 January 2007. In this Communication, the Commission outlines the main lessons to be learnt by countries adopting the euro in future.

Ensuring a quick changeover: the “big bang” scenario

Slovenia’s “Masterplan” for the euro changeover is based on the so-called “big-bang” scenario, whereby euro banknotes and coins are introduced on the same day as the euro is adopted (1 January 2007 in the case of Slovenia). By contrast, the countries which adopted the euro earlier (eleven countries in 1999, and Greece in 2001) did not introduce banknotes and coins until 1 January 2002. Between 1999 and 2001, the euro could only be used as bank money in these countries (for cheques or bank transfers, for example).

The European Commission favours the “big-bang” approach for new countries joining the euro zone. Given that euro cash has been available since 2002, this approach appears to be the most appealing one because of its simplicity in terms of communication and information.

Both the Slovenian tolar and the euro were in circulation at the same time in the period from 1 January to 14 January 2007. After this period of dual circulation, the euro became the sole legal tender. Those still in possession of tolar banknotes and coins can exchange them for euros at branches of the national central bank.

The backflow of tolar cash started in November and December 2006, and was remarkably fast, especially for tolar banknotes. The return of legacy currency had caused severe bottlenecks during the first-wave transition in 2002.

Supplying banks and retailers with euros

Before the euro changeover date (” Day”), banks and other financial institutions have to be supplied with sufficient quantities of euro banknotes and coins by the central bank, a process called frontloading. In turn, the banks try to ensure that businesses involved in cash-related operations, and retailers in particular, are supplied with euro cash before Day to allow them to give change exclusively in euro, thus avoiding the recycling of legacy currency. As they bring the new euro cash into circulation, banks and retailers at the same time need to cope with the rapid backflow of legacy cash.

The Bank of Slovenia received a total of 94.5 million banknotes with a face value of 2 175 million from the Eurosystem’s logistical stocks. A total of 296.3 million euro coins with a face value of 104 million were supplied by the Mint of Finland. Slovenia does not have its own national mint and selected the Finnish Mint as its coin supplier following a public tender procedure.

The conversion of financial administrative systems

The some 2.3 million bank accounts held by private persons and by businesses, associations and other legal entities were successfully converted into euro.

With regard to the conversion of administrative and financial systems to the euro, the Commission confirms that the “big-bang” scenario is much more demanding than the ” Madrid scenario ” which was applied during the first changeover wave. At the time, public administrations and private businesses benefited from a three-year transitional period extending from 1999 to 2001 (one year in the case of Greece) to convert these systems to the euro. Slovenian administrative bodies and businesses were expected to operate exclusively in tolar up to 31 December 2006 and switch all their systems to the euro as of 1 January 2007. This challenge was met because the administrations and business were able to prepare themselves adequately and in good time. No particular problems were experienced or reported.

Monitoring prices

The dual display of prices started in March 2006 and will continue until mid-2007. The Slovenian Consumers’ Association has been monitoring prices (“PriceWatch”) and has asked consumers to report price rises so that these can be published and possible abuses limited.

In January 2007, the Statistics Office of the Republic of Slovenia (SORS) released its first analysis of the impact of the changeover on prices in December 2006. The impact of unusual price increases in restaurants, bars and coffee shops was estimated to be no more than 0.12 %. The impact on the other expenditure groups was also estimated at 0.12 percentage points. For January 2007, SORS highlighted some other unusual price increases for the same purchases, as well as for recreational and sports services.

Based on the information provided by SORS, Eurostat considers that the likely impact of the changeover on consumer prices during and after the changeover period could be in the order of 0.3 %. The fall in the all-items annual HICP inflation rate in January 2007 to 2.8 %, and the further fall in February 2007 shows that the changeover effects, although noticeable, do not seem to be of such a magnitude as to drive consumer price inflation as measured by the all-items HICP. These observations are very similar to those made during the previous changeover to the euro. Eurostat will update its conclusions concerning the impact of the changeover if necessary, as further information becomes available.

Informing citizens is crucial: perceived inflation and actual price changes

In Slovenia, perceived inflation rose in January and February 2007 despite the fact that prices overall actually decreased during these two months. These observations are very much in line with those made during the first changeover to the euro. In Slovenia’s case, however, there was a slight decrease in perceived prices in March. This decrease may be due to intensified communications efforts by the Slovenian authorities.

If perceived inflation continues to decrease, the situation in Slovenia may be different to the one observed in the euro zone, where perceived inflation continued to climb steeply and consistently for almost a full year after euro banknotes and coins were introduced in 2002. Five years on, this disparity has still not been eliminated entirely.

The Slovenian changeover experience shows once again that perception, expectation and reality with respect to price changes do not necessary go together. It is clear that a change of currency affects people’s value scales and triggers a gradual mental adjustment process. Public perception of prices remains a key concern for future changeovers.


EMU@10: successes and challenges after 10 years of Economic and Monetary Union

EMU@10: successes and challenges after 10 years of Economic and Monetary Union

Outline of the Community (European Union) legislation about EMU@10: successes and challenges after 10 years of Economic and Monetary Union


These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Economic and monetary affairs > Practical aspects of introducing the euro

EMU@10: successes and challenges after 10 years of Economic and Monetary Union

Document or Iniciative

Communication from the Commission of 7 May 2008 to the European Parliament, the Council, the European Economic and Social Committee, the Committee of the Regions and the European Central Bank : EMU@10 – successes and challenges after 10 years of Economic and Monetary Union [COM(2008) 238 final – Non published in the Official Journal].


At the end of its first decade, the euro is a success story and represents the most tangible result of European integration. Low and stable inflation and interest rates over the past ten years have boosted investment in the euro area. Fiscal consolidation has continued and job creation has been at record levels. However, output and productivity growth have been lower than in other developed economies, and concerns about income distribution have grown. In the future, EMU faces challenges linked to ongoing globalisation, an ageing population, rising food and energy costs and the effects of climate change. .

Ten years of monetary and economic stability and integration

EMU has fostered economic and market integration by removing exchange rate risks and lowering cross-border transaction costs, helping to develop the single market and integrate product markets. Establishing itself as the world’s second currency after the US dollar, the euro is a powerful catalyst for financial market integration. The Single Euro Payments Area (SEPA) will eliminate differences between national and cross-border retail payments.

A record 16 million jobs were created during the first decade of EMU, while unemployment fell to around 7 %, the lowest in more than fifteen years. In addition, EMU has brought significant benefits to European Union Member States engaged in a catch-up process, by providing an environment of macroeconomic stability and low interest rates coupled with the support of the Cohesion Policy and Structural Funds.

A single monetary policy, conducted by the European Central Bank (ECB), combined with national yet coordinated fiscal policies ensures macroeconomic stability. Currency fluctuation and exchange rate realignments within the euro area have become a thing of the past. Furthermore, monetary policy has cemented long-run inflation expectations: inflation averaged around 2 % in the first decade of EMU, falling from 3 % in the 1990s and 8 to 10 % in the 1970s and 1980s. This has contributed to improving the euro area’s resilience against adverse external developments.

The Stability and Growth Pact (SGP) improved budgetary discipline and the euro-area economy has pursued a faster track of economic and financial integration than the rest of the EU. Supporting macroeconomic stability, fiscal consolidation has been impressive over the past years and has culminated in a deficit of only 0.6 % of GDP in 2007 compared to an average of around 4 % in both the 1980s and 1990s.

EMU’s remaining challenges, amplified by new global trends

Although the first decade of EMU has been a positive picture overall, there are still unfulfilled expectations and remaining challenges, such as globalisation, rising food and energy prices and the ageing population. At around 2 % per annum; potential growth remains too low and there are still substantial differences across countries in terms of inflation and labour costs. At the international level, a clear strategy is needed so that the euro area can project a strong voice in international economic fora in an increasingly globalised world. Finally, the public image of the euro does not fully reflect EMU’s successful economic performance. In some countries, citizens believe that prices have increased significantly because of the euro. Indeed, even if overall inflation was only marginally affected at the time of the changeover, occasional abusive price increases in specific sectors and countries have tarnished the image of the single currency.

To address the challenges for the next decade, it is necessary to build on existing macroeconomic stability while raising potential growth and furthering the welfare of euro-area citizens, ensuring a smooth adjustment capacity as EMU expands to take on new members and protecting successfully the interests of the euro area in the global economy. To do this, the Commission has outlined a three-pillar agenda:

  • Domestic: deepening and broadening macroeconomic surveillance and better integrating structural policies into the overall policy co-ordination process within EMU;
  • External: enhancing the euro area’s role in global economic governance by developing common positions on international issues and by consolidating representation, with the ultimate objective of a single seat for the euro area in the relevant international financial institutions and fora;
  • Promoting effective governance of EMU: putting into practice both agendas requires a more effective system of economic governance.


In May 1998, the Council took the decision to move to the third and final phase of Economic and Monetary Union (EMU) and to introduce the single currency, the euro. Used since 1 January 1999 as book money, euro banknotes and coins were introduced on 1 January 2002 in 12 Member States. At present, 17 out of 27 are part of the euro area.

The impact on Community policies, institutions and legislation

The impact on Community policies, institutions and legislation

Outline of the Community (European Union) legislation about The impact on Community policies, institutions and legislation


These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Economic and monetary affairs > Practical aspects of introducing the euro

The impact on Community policies, institutions and legislation

Document or Iniciative

Commission Communication of 5 November 1997: The impact of the changeover to the euro on Community policies, institutions and legislation [COM (97) 560 final – Not published in the Official Journal].



At the time the communication was drawn up, the budget was cast in ecus but both revenue (resources) and expenditure are wholly or partly realised on the basis of national currency values.

  • On the revenue side, the contributions are paid by the Member States in national currency;
  • On the expenditure side, the appropriations are generally committed and paid in ecus, with the exception of the payment obligations under the Guarantee Section of the EAGGF and the administrative budget.

Operations carried out in national currency result in the Community budget having to bear the exchange risk, since the exchange value in ecus can fluctuate.

With the introduction of the euro, the participating Member States will have their currency in common with the Community budget. This will have the effect of completely removing the exchange risk for operations still carried out in national currency. However, as far as the “pre-in” countries (Denmark, the United Kingdom and Sweden) are concerned, the exchange risk would persist for this type of operation.


The agri-monetary regime will be affected in different ways by the introduction of the euro:

  • For the participating countries, it will no longer be necessary to convert amounts (the Community will reimburse in euros any expenditure made in euros by the Member State concerned); however, there remains a difference between the rates used in the agri-monetary regime and the fixed and irrevocable conversion rates. This situation will have to be rectified in a manner still to be determined.
  • For the “pre-in” countries, there will still be a need for a conversion rate, but the system could be adjusted.

Adjustments to the agri-monetary regime will also apply to the fisheries sector.


Administrative expenditure represents 3.5% of the total budget (1996 figures), consisting primarily of pensions and salaries, which are paid in national currency (mainly Belgian and Luxembourg francs).

The introduction of the euro will eliminate the exchange risk for the Community budget as regards all salaries and pensions paid to persons resident in participating Member States.

Given the political significance of the remuneration of Community staff, it is proposed that pay slips be expressed in euros and that salaries and pensions be paid in euros in the participating countries as from 1 January 1999.


The most immediate consequence of the transition to the euro for Community legislation is that the ecu will be replaced by the euro (at a rate of 1:1) without any action needing to be taken at either Community or national level.

To cater for cases where the common figure in ecus is accompanied by a clause governing conversion to the respective national currencies, the Commission has drawn up certain guidelines in order to ensure consistency in the interpretation of such clauses.

Certain legal clauses need to be dealt with individually, such as those which refer to specific interest rates (e.g. in the context of penalty clauses) that will no longer be available once the euro has been introduced.

As regards agreements with third countries, references to the ecu will automatically be converted to euros without any specific action having to be taken by any party. It would be advisable to run an information campaign for the benefit of the parties concerned in advance of 1 January 1999.


From the operational point of view, the transition will affect the following:

  • treasury management and financial management: the treasury department of the Commission will no longer have to purchase huge amounts of ecus on the currency markets and the management of accounts and of foreign currency transactions will be greatly simplified;
  • statistics: some of Eurostat’s statistical time series will be rescaled; new statistical aggregates will be produced for the euro area;
  • informatics: the “Euro/Year 2000” working group is dealing with the relevant issues in this field.

The changeover work to be carried out in the Community institutions will largely take place before 1 January 1999, in contrast to the changeover at national, regional and local level, where the adaptation work necessitated by the changeover will be spread over the entire length of the transitional period, and in a few instances will even be concentrated at the end of this period (1 January 2002).