Latest
On 19 January 2021 the European Commission issued a Communication on the launch of a new strategy to stimulate the openness, strength and resilience of the economic and financial system of the European Union (EU). The Communication includes a series of targeted actions to promote the international role of the euro.
Overview
The euro is the currency of 20 EU countries, over 350 million EU citizens and the second most important currency in the world. It was launched on 1 January 1999. Euro notes and coins are tangible, everyday reminders of the freedom, convenience and opportunities that the European Union makes possible.
Learn more on the history of the euro and the European Central bank
![Euro at 20 Euro at 20](/https/finance.ec.europa.eu/sites/default/files/styles/oe_theme_medium_no_crop/public/2018-11/euroroat20.png?itok=qUD62kd-)
An increased international role for the euro is a tool to strengthen Europe’s influence in the world. It will allow the European Union to better protect its citizens and businesses, uphold its values and promote its interests in shaping global affairs according to rule-based multilateralism. It will improve the resilience of the international financial system, providing market operators across the globe with additional choice and making the international economy less vulnerable to shocks linked to the strong reliance of many sectors on a single currency. The euro should continue to facilitate and expand Europe's responsible trade agenda, allowing for European companies to trade all over the world to the benefit of Europe's economy without disruptions, while at the same time safeguarding the European social and regulatory model at home.
The euro and the recovery
The issuance of high-quality euro-denominated bonds under NextGenerationEU will add significant depth and liquidity to the EU's capital markets over the coming years and will make them, and the euro, more attractive for investors. Promoting sustainable finance is also an opportunity to develop EU financial markets into a global ‘green finance' hub, bolstering the euro as the default currency for sustainable financial products. The EU is also reviewing the concept of a digital euro, which could support the international role of euro.
What does the euro mean for Europeans
Public support for the euro remains at very high levels since surveys began in 2002. The latest survey (March 2021) shows that public support for the euro has reached a record high in the euro area. The survey shows the highest overall support for the euro for the fourth consecutive year since the start of these yearly surveys in 2002. When asked whether the euro is a good thing or not for the EU, 80% of those surveyed reply that having the euro is a good thing (an increase of 4 pp compared to October 2019), while just 14% think it is a bad thing.
![euro opinion euro opinion](/https/finance.ec.europa.eu/sites/default/files/styles/oe_theme_medium_no_crop/public/2021-09/euro-comparison.png?itok=0ksY0CjI)
More about the latest data from 2021 is available here. The regular opinion polls contain summary reports and country scorecards: Public opinion on the euro.
Deepening the Economic and Monetary Union
A stronger euro relies on a robust institutional set-up of the Economic and Monetary Union, as well as on a resilient EU banking system and liquid capital markets. Further Deepening the Economic and Monetary Union, (completing the Banking Union and developing deep and liquid capital markets through the Capital Markets Union) are necessary to reinforce the international role of the euro.
Thus, the initiatives to enhance the international role of the euro complement actions that are planned and already being undertaken to deepen Europe’s Economic and Monetary Union.
The current international role of the euro
The euro’s success as a stable and credible currency means that it already plays an important role beyond the borders of the EU and the euro area.
- The European Union’s share of 2020 global gross domestic product amounts to an estimated around 18% (IMF World Economic Outlook). The share of the euro area is estimated to be around 15%
- The euro is the second most widely used currency in terms of its share of global payments. The share of the euro in global payments amounted to around 36.7% in December 2020. The US dollar, by comparison, accounted for about 38.7% of total payments
- The euro is the second most important currency in the international monetary system, after the US dollar. The share of the euro across various indicators of international currency use in 2020 was around 19% (ECB data)
- Sixty other countries and territories around the world, home to some 175 million people, have chosen to use the euro as their currency or to peg their own currency to it
The benefits of an enhanced international role for the euro
A wider global use of the euro can benefit the European economy.
- Lower cost and lower risk of trading internationally for European businesses. Trading in euro rather than in a foreign currency will remove the exchange risk and other currency related costs especially for small and medium-sized European businesses
- Additional choice for market operators across the globe
- Lower interest rates paid by European households, businesses and Member States. A more attractive euro as a safe store of value reduces the interest rate (or return) demanded by investors
- More reliable access to finance for European businesses and governments, even in periods of external financial instability, as European financial markets could become deeper, more liquid and integrated
- Stronger autonomy of European consumers and businesses, allowing them to pay or receive payments for their international trade, and finance themselves with reduced exposure to legal actions taken by third country jurisdictions, like extraterritorial sanctions
- Improved resilience of the international financial system and economy, making them less vulnerable to exchange rate shocks
The benefits attached to a wider use of an international currency come with increased global responsibilities, in line with central banks' respective mandates. Although the benefits of a stronger international role of the euro outweigh the possible challenges, its consequences would have to be carefully calibrated, for example in the area of balance of payments for the euro area vis-à-vis the rest of the world.
A deep and autonomous European financial sector
European financial markets are crucial for Europe’s economy. These markets are where European businesses and citizens find financing from banks and investors. Financial markets include simple products like a bank loan or equity capital for start-ups to sophisticated derivative products used by banks and businesses to manage their financial risks.
The Commission will implement additional measures to foster a deep European financial sector in order to build a virtuous spiral: intensify the attractiveness of the euro will increase its use, which will in turn make it even more attractive.
- Strengthening the liquidity and resilience of European market infrastructure
- Ensuring a reliable framework for trustworthy interest rate benchmarks
- Supporting a fully integrated instant payment system in the EU
International financial sector
In the past 20 years, the euro has become the second most important international currency. Initiatives linked to the international financial sector include
- supporting Central Banks collaboration to safeguard global financial stability
- increasing the share of euro denominated debt by European bodies
- fostering economic diplomacy to promote the use of euro in payments and as a reserve currency
- technical support to improve access of developing countries to euro payment system
To encourage the international role of the euro, Europe needs to engage more with international actors. Supported by the EU's strong Economic and Monetary Union, there is scope for the euro to develop further its international role and achieve its full potential. Various initiatives will be launched towards the international financial sector: ongoing central banks’ collaboration to safeguard financial stability; increasing the share of euro denominated debt by European entities; fostering economic diplomacy to promote the euro and providing technical assistance to improve access to the euro payment system by foreign entities. This will require some additional measures (besides deepening the EMU, CMU and completion of a Banking Union).
Euro in energy and commodity markets
Commodity markets constitute one of the key aspects of global trading. Since the adoption of the Commission Recommendation on the international role of the euro, in the field of energy there has been significant progress in the use of the euro in the EU gas markets. The share of natural gas contracts signed in euros increased from 38% in 2018 to 64% in 2020. Euro-denominated benchmarks are also increasingly recognised and used worldwide. To further increase the use of the euro in commodity trades, the Commission will continue to discuss with the main players in key strategic sectors, including commodity, aircraft, healthcare, and critical raw materials for renewable energy.
The Commission will continue engaging with market operators and review relevant regulations to facilitate the emergence of euro-denominated indices covering core sectors of the economy, including nascent energy markets, such as hydrogen.
![Visual trade Visual trade](/https/finance.ec.europa.eu/sites/default/files/styles/oe_theme_medium_no_crop/public/2018-11/visu_trade03c.jpg?itok=-B0C8iSS)
Factsheets
Find out more about the different initiatives for strengthening the international role of the euro.
Documents
Staff Working Document “Strengthening the International Role of the Euro”
Communication “Towards a stronger international role of the euro”
Recommendation on the international role of the euro in the field of energy
Past consultations
Consultation on the role of the euro on liquidity in foreign exchange markets
Consultation period: 25 January - 31 March 2019
The Commission launched a targeted consultation with financial market actors to identify potential obstacles and incentives to enhance the role of the euro in the foreign exchange market.
Consultation on the role of the euro in the field of energy
Consultation period: 14 February - 31 March 2019
The Commission has launched a consultation inviting stakeholders to express their views on the market potential for a broader use of euro-denominated transactions in the areas of oil, refined products and gas. In particular, the consultation aims at gathering feedback on the need to set-up euro-denominated crude oil reference contracts and reinforce the refined product ones.
Consultation period: 23 January - 22 March 2019
In the sector of non-energy non-agricultural raw materials (metals and minerals), the Commission was engaged in a broad consultation with stakeholders in order to identify ways to increase trading in euro, especially in the context of transactions at exchanges located in Europe and direct transactions between European companies.
Consultation on the role of the euro in international trade of agriculture and food commodities
Consultation period: 23 January - 22 March 2019
The Commission launched a consultation with stakeholders to identify ways to increase trading in euro, especially in transactions in Europe and direct transactions between European companies.
Consultation on the role of the euro in transport means
Consultation period: 23 January - 22 March 2019
- Aircraft
- Maritime and railway transport
The Commission will has started two consultations with stakeholders to investigate possible actions to promote the use of the euro by transport sector manufacturers (aircraft, maritime and railways). The consultation will explore in a more detail the reasons why the euro is not used for many of the most relevant international transactions and will help identifying conditions that would enable the promotion of the euro in transactions with european businesses.