The European Union (EU) encompasses all its Member States within the Economic and Monetary Union (EMU), fostering economic policy coordination to achieve the EU’s economic objectives. Within this broader framework, a significant number of Member States have adopted a further step towards economic integration by replacing their national currencies with a unified single currency – the euro. These countries collectively constitute what is known as the euro area.
When the euro was initially launched in 1999 as electronic currency, the euro area comprised 11 out of the then 15 EU Member States. This area has progressively expanded over the years. Greece joined in 2001, preceding the physical introduction of euro coins and banknotes. Subsequent enlargements saw Slovenia adopt the euro in 2007, followed by Cyprus and Malta in 2008, Slovakia in 2009, Estonia in 2011, Latvia in 2014, and Lithuania in 2015. Most recently, Croatia became the 20th EU Member State to enter the euro area in 2023.
However, not all EU Member States are part of the euro area. Denmark, for instance, has secured a formal ‘opt-out’ from euro adoption, a provision outlined in a Protocol attached to the EU Treaty. This allows Denmark to remain outside the euro area unless it chooses to join in the future. Sweden, while not having an opt-out, currently does not meet all the necessary economic criteria to qualify for euro area membership.
The remaining EU Member States that are not in the euro area primarily joined the Union in the 2004, 2007, and 2013 expansions, after the euro’s inception. At the time of their accession, these nations had not yet fulfilled the economic conditions required for euro adoption. They are committed to joining the euro area once they satisfy these criteria and are classified as Member States with a ‘derogation’, a status also shared by Sweden.
Interestingly, the euro’s reach extends beyond the EU’s borders. Andorra, Monaco, San Marino, and the Vatican City, although not EU Member States, have adopted the euro as their official currency through specific monetary agreements with the EU. These states are also permitted to issue their own euro coins within defined limits. Despite their euro adoption, they are officially not considered part of the euro area, which is strictly defined as comprising EU Member States that have adopted the euro.
