Euro

The euro (sign: ; code: EUR) is the official currency of 19 of the 28 member states of the European Union. This group of states is known as the eurozone or euro area, and counts about 343 million citizens as of 2019.[8][9] The euro is the second largest and second most traded currency in the foreign exchange market after the United States dollar.[10] The euro is divided into 100 cents.

The currency is also used officially by the institutions of the European Union, by four European microstates that are not EU members,[9] as well as unilaterally by Montenegro and Kosovo. Outside Europe, a number of special territories of EU members also use the euro as their currency. Additionally, 240 million people worldwide as of 2018 use currencies pegged to the euro.

The euro is the second largest reserve currency as well as the second most traded currency in the world after the United States dollar.[11][12][13] As of August 2018, with more than €1.2 trillion in circulation, the euro has one of the highest combined values of banknotes and coins in circulation in the world, having surpassed the U.S. dollar.[14][note 14]

The name euro was officially adopted on 16 December 1995 in Madrid.[15] The euro was introduced to world financial markets as an accounting currency on 1 January 1999, replacing the former European Currency Unit (ECU) at a ratio of 1:1 (US$1.1743). Physical euro coins and banknotes entered into circulation on 1 January 2002, making it the day-to-day operating currency of its original members, and by March 2002 it had completely replaced the former currencies.[16] While the euro dropped subsequently to US$0.83 within two years (26 October 2000), it has traded above the U.S. dollar since the end of 2002, peaking at US$1.60 on 18 July 2008.[17] In late 2009, the euro became immersed in the European sovereign-debt crisis, which led to the creation of the European Financial Stability Facility as well as other reforms aimed at stabilising and strengthening the currency.

Euro
евро (Bulgarian), ευρώ (Greek), euró (Hungarian), eoró (Irish), eiro (Latvian), euras (Lithuanian), ewro (Maltese), evro (Slovene)
Euro Series Banknotes Common face of one euro coin
Euro banknotes[note 1]€1 coin
ISO 4217
CodeEUR
Number978
Exponent2
Denominations
Subunit
 1/100cent
Actual usage varies depending on language
PluralSee Euro linguistic issues
centSee article
Symbol
centc
NicknameThe single currency[1], Fiber[2] and others
Banknotes
 Freq. used€5, €10, €20, €50, €100[3]
 Rarely used€200, €500[3]
Coins
 Freq. used1c, 2c, 5c, 10c, 20c, 50c, €1, €2
 Rarely used1c, 2c (Finland, Italy, Ireland and The Netherlands)
Demographics
Official user(s)
Unofficial user(s)
Issuance
Central bankEuropean Central Bank
 Websitewww.ecb.europa.eu
Printer
 Website
Mint
 Website
Valuation
Inflation1.9% (November 2018)
 Sourceecb.europa.eu
 MethodHICP
Pegged by

Administration

European Central Bank - building under construction - Frankfurt - Germany - 13
The European Central Bank has its seat in Frankfurt (Germany) and is in charge of the monetary policy of the eurozone.

The euro is managed and administered by the Frankfurt-based European Central Bank (ECB) and the Eurosystem (composed of the central banks of the eurozone countries). As an independent central bank, the ECB has sole authority to set monetary policy. The Eurosystem participates in the printing, minting and distribution of notes and coins in all member states, and the operation of the eurozone payment systems.

The 1992 Maastricht Treaty obliges most EU member states to adopt the euro upon meeting certain monetary and budgetary convergence criteria, although not all states have done so. The United Kingdom and Denmark negotiated exemptions,[18] while Sweden (which joined the EU in 1995, after the Maastricht Treaty was signed) turned down the euro in a 2003 referendum, and has circumvented the obligation to adopt the euro by not meeting the monetary and budgetary requirements. All nations that have joined the EU since 1993 have pledged to adopt the euro in due course.

Issuing modalities for banknotes

Since 1 January 2002, the national central banks (NCBs) and the ECB have issued euro banknotes on a joint basis.[19] Euro banknotes do not show which central bank issued them. Eurosystem NCBs are required to accept euro banknotes put into circulation by other Eurosystem members and these banknotes are not repatriated. The ECB issues 8% of the total value of banknotes issued by the Eurosystem.[19] In practice, the ECB's banknotes are put into circulation by the NCBs, thereby incurring matching liabilities vis-à-vis the ECB. These liabilities carry interest at the main refinancing rate of the ECB. The other 92% of euro banknotes are issued by the NCBs in proportion to their respective shares of the ECB capital key,[19] calculated using national share of European Union (EU) population and national share of EU GDP, equally weighted.[20]

Characteristics

Coins and banknotes

Euro coins and banknotes
Euro coins and banknotes of various denominations
Second serie 5, 10, 20, 50 Euro banknotes
Euro banknotes from the Europa series (€100 & €200 notes not yet in circulation)

The euro is divided into 100 cents (also referred to as euro cents, especially when distinguishing them from other currencies, and referred to as such on the common side of all cent coins). In Community legislative acts the plural forms of euro and cent are spelled without the s, notwithstanding normal English usage.[21][22] Otherwise, normal English plurals are used,[23] with many local variations such as centime in France.

All circulating coins have a common side showing the denomination or value, and a map in the background. Due to the linguistic plurality in the European Union, the Latin alphabet version of euro is used (as opposed to the less common Greek or Cyrillic) and Arabic numerals (other text is used on national sides in national languages, but other text on the common side is avoided). For the denominations except the 1-, 2- and 5-cent coins, the map only showed the 15 member states which were members when the euro was introduced. Beginning in 2007 or 2008 (depending on the country) the old map is being replaced by a map of Europe also showing countries outside the Union like Norway, Ukraine, Belarus, Russia or Turkey. The 1-, 2- and 5-cent coins, however, keep their old design, showing a geographical map of Europe with the 15 member states of 2002 raised somewhat above the rest of the map. All common sides were designed by Luc Luycx. The coins also have a national side showing an image specifically chosen by the country that issued the coin. Euro coins from any member state may be freely used in any nation that has adopted the euro.

New finnish 2013 5 euro
The new banknotes were introduced in the beginning of 2013. The top half of the image shows the front side of the 5 euro note and the bottom half shows the back side.
EUR 10 obverse (2014 issue)
10 euro note from the new Europa series written in Latin (EURO) and Greek (ΕΥΡΩ) alphabets, but also in the Cyrillic (ЕВРО) alphabet, as a result of Bulgaria joining the European Union in 2007.
The Europa series 100 € obverse side
The design for the new Europa series 100 euro note (and for new 50 and 200 notes) features the acronyms of the name of the European Central Bank in ten linguistic variants, covering all official languages of the EU28.

The coins are issued in denominations of €2, €1, 50c, 20c, 10c, 5c, 2c, and 1c. To avoid the use of the two smallest coins, some cash transactions are rounded to the nearest five cents in the Netherlands and Ireland[24][25] (by voluntary agreement) and in Finland (by law).[26] This practice is discouraged by the Commission, as is the practice of certain shops of refusing to accept high-value euro notes.[27]

Commemorative coins with €2 face value have been issued with changes to the design of the national side of the coin. These include both commonly issued coins, such as the €2 commemorative coin for the fiftieth anniversary of the signing of the Treaty of Rome, and nationally issued coins, such as the coin to commemorate the 2004 Summer Olympics issued by Greece. These coins are legal tender throughout the eurozone. Collector coins with various other denominations have been issued as well, but these are not intended for general circulation, and they are legal tender only in the member state that issued them.[28]

The design for the euro banknotes has common designs on both sides. The design was created by the Austrian designer Robert Kalina.[29] Notes are issued in €500, €200, €100, €50, €20, €10, €5. Each banknote has its own colour and is dedicated to an artistic period of European architecture. The front of the note features windows or gateways while the back has bridges, symbolising links between countries and with the future. While the designs are supposed to be devoid of any identifiable characteristics, the initial designs by Robert Kalina were of specific bridges, including the Rialto and the Pont de Neuilly, and were subsequently rendered more generic; the final designs still bear very close similarities to their specific prototypes; thus they are not truly generic. The monuments looked similar enough to different national monuments to please everyone.[30]

Payments clearing, electronic funds transfer

Capital within the EU may be transferred in any amount from one country to another. All intra-EU transfers in euro are treated as domestic transactions and bear the corresponding domestic transfer costs.[31] This includes all member states of the EU, even those outside the eurozone providing the transactions are carried out in euro.[32] Credit/debit card charging and ATM withdrawals within the eurozone are also treated as domestic transactions; however paper-based payment orders, like cheques, have not been standardised so these are still domestic-based. The ECB has also set up a clearing system, TARGET, for large euro transactions.[33]

Currency sign

Euro logo plus character
The euro sign; logotype and handwritten

A special euro currency sign (€) was designed after a public survey had narrowed the original ten proposals down to two. The European Commission then chose the design created by the Belgian Alain Billiet. Of the symbol, the EC stated[21]

Inspiration for the € symbol itself came from the Greek epsilon (Є)[note 15] – a reference to the cradle of European civilisation – and the first letter of the word Europe, crossed by two parallel lines to 'certify' the stability of the euro.

The European Commission also specified a euro logo with exact proportions and foreground and background colour tones.[34] While the Commission intended the logo to be a prescribed glyph shape, font designers made it clear that they intended to design their own variants instead.[35] Typewriters lacking the euro sign can create it by typing a capital "C", backspacing, and overstriking it with the equal ("=") sign. Placement of the currency sign relative to the numeric amount varies from nation to nation, but for texts in English the symbol (or the ISO-standard "EUR") should precede the amount.[36]

History

Introduction

Preceding national currencies of the Eurozone
Country Currency Code
(ISO 4217)
Rate[37] Fixed on Yielded
Austria Austrian schilling ATS 13.7603 1998-12-31 1999-01-01
Belgium Belgian franc BEF 40.3399 1998-12-31 1999-01-01
Cyprus Cypriot pound CYP 0.585274 2007-07-10 2008-01-01
Netherlands Dutch guilder NLG 2.20371 1998-12-31 1999-01-01
Estonia Estonian kroon EEK 15.6466 2010-07-13 2011-01-01
Finland Finnish markka FIM 5.94573 1998-12-31 1999-01-01
France French franc FRF 6.55957 1998-12-31 1999-01-01
Germany German mark DEM 1.95583 1998-12-31 1999-01-01
Greece Greek drachma GRD 340.75 2000-06-19 2001-01-01
Ireland Irish pound IEP 0.787564 1998-12-31 1999-01-01
Italy Italian lira ITL 1,936.27 1998-12-31 1999-01-01
Latvia Latvian lats LVL 0.702804 2013-07-09 2014-01-01
Lithuania Lithuanian litas LTL 3.4528 2014-07-23 2015-01-01
Luxembourg Luxembourgish franc LUF 40.3399 1998-12-31 1999-01-01
Malta Maltese lira MTL 0.4293 2007-07-10 2008-01-01
Monaco Monégasque franc MCF 6.55957 1998-12-31 1999-01-01
Portugal Portuguese escudo PTE 200.482 1998-12-31 1999-01-01
San Marino Sammarinese lira SML 1,936.27 1998-12-31 1999-01-01
Slovakia Slovak koruna SKK 30.126 2008-07-08 2009-01-01
Slovenia Slovenian tolar SIT 239.64 2006-07-11 2007-01-01
Spain Spanish peseta ESP 166.386 1998-12-31 1999-01-01
Vatican City Vatican lira VAL 1,936.27 1998-12-31 1999-01-01

The euro was established by the provisions in the 1992 Maastricht Treaty. To participate in the currency, member states are meant to meet strict criteria, such as a budget deficit of less than 3% of their GDP, a debt ratio of less than 60% of GDP (both of which were ultimately widely flouted after introduction), low inflation, and interest rates close to the EU average. In the Maastricht Treaty, the United Kingdom and Denmark were granted exemptions per their request from moving to the stage of monetary union which resulted in the introduction of the euro. (For macroeconomic theory, see below.)

The name "euro" was officially adopted in Madrid on 16 December 1995.[15] Belgian Esperantist Germain Pirlot, a former teacher of French and history is credited with naming the new currency by sending a letter to then President of the European Commission, Jacques Santer, suggesting the name "euro" on 4 August 1995.[38]

Due to differences in national conventions for rounding and significant digits, all conversion between the national currencies had to be carried out using the process of triangulation via the euro. The definitive values of one euro in terms of the exchange rates at which the currency entered the euro are shown on the right.

The rates were determined by the Council of the European Union,[note 16] based on a recommendation from the European Commission based on the market rates on 31 December 1998. They were set so that one European Currency Unit (ECU) would equal one euro. The European Currency Unit was an accounting unit used by the EU, based on the currencies of the member states; it was not a currency in its own right. They could not be set earlier, because the ECU depended on the closing exchange rate of the non-euro currencies (principally the pound sterling) that day.

The procedure used to fix the conversion rate between the Greek drachma and the euro was different, since the euro by then was already two years old. While the conversion rates for the initial eleven currencies were determined only hours before the euro was introduced, the conversion rate for the Greek drachma was fixed several months beforehand.[note 17]

The currency was introduced in non-physical form (traveller's cheques, electronic transfers, banking, etc.) at midnight on 1 January 1999, when the national currencies of participating countries (the eurozone) ceased to exist independently. Their exchange rates were locked at fixed rates against each other. The euro thus became the successor to the European Currency Unit (ECU). The notes and coins for the old currencies, however, continued to be used as legal tender until new euro notes and coins were introduced on 1 January 2002.

The changeover period during which the former currencies' notes and coins were exchanged for those of the euro lasted about two months, until 28 February 2002. The official date on which the national currencies ceased to be legal tender varied from member state to member state. The earliest date was in Germany, where the mark officially ceased to be legal tender on 31 December 2001, though the exchange period lasted for two months more. Even after the old currencies ceased to be legal tender, they continued to be accepted by national central banks for periods ranging from several years to indefinitely (the latter for Austria, Germany, Ireland, Estonia and Latvia in banknotes and coins, and for Belgium, Luxembourg, Slovenia and Slovakia in banknotes only). The earliest coins to become non-convertible were the Portuguese escudos, which ceased to have monetary value after 31 December 2002, although banknotes remain exchangeable until 2022.

Eurozone crisis

Government surplus or deficit (EU-USA-UK)
Budget deficit of the eurozone compared to the United States and the UK.

Following the U.S. financial crisis in 2008, fears of a sovereign debt crisis developed in 2009 among investors concerning some European states, with the situation becoming particularly tense in early 2010.[39][40] Greece was most acutely affected, but fellow Eurozone members Cyprus, Ireland, Italy, Portugal, and Spain were also significantly affected.[41][42] All these countries utilized EU funds except Italy, which is a major donor to the EFSF.[43] To be included in the eurozone, countries had to fulfil certain convergence criteria, but the meaningfulness of such criteria was diminished by the fact it was not enforced with the same level of strictness among countries.[44]

According to the Economist Intelligence Unit in 2011, "[I]f the [euro area] is treated as a single entity, its [economic and fiscal] position looks no worse and in some respects, rather better than that of the US or the UK" and the budget deficit for the euro area as a whole is much lower and the euro area's government debt/GDP ratio of 86% in 2010 was about the same level as that of the United States. "Moreover", they write, "private-sector indebtedness across the euro area as a whole is markedly lower than in the highly leveraged Anglo-Saxon economies". The authors conclude that the crisis "is as much political as economic" and the result of the fact that the euro area lacks the support of "institutional paraphernalia (and mutual bonds of solidarity) of a state".[45]

The crisis continued with S&P downgrading the credit rating of nine euro-area countries, including France, then downgrading the entire European Financial Stability Facility (EFSF) fund.[46]

A historical parallel – to 1931 when Germany was burdened with debt, unemployment and austerity while France and the United States were relatively strong creditors – gained attention in summer 2012[47] even as Germany received a debt-rating warning of its own.[48][49] In the enduring of this scenario the Euro serves as a mean of quantitative primitive accumulation.

Direct and indirect usage

Direct usage

The euro is the sole currency of 19 EU member states: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain. These countries constitute the "eurozone", some 343 million people in total as of 2018.[50]

With all but two of the remaining EU members obliged to join, together with future members of the EU, the enlargement of the eurozone is set to continue. Outside the EU, the euro is also the sole currency of Montenegro and Kosovo and several European microstates (Andorra, Monaco, San Marino and the Vatican City) as well as in five overseas territories of EU members that are not themselves part of the EU (Saint Barthélemy, Saint Martin, Saint Pierre and Miquelon, the French Southern and Antarctic Lands and Akrotiri and Dhekelia). Together this direct usage of the euro outside the EU affects nearly 3 million people.

The euro has been used as a trading currency in Cuba since 1998,[51] and Syria since 2006.[52] There are also various currencies pegged to the euro (see below). In 2009, Zimbabwe abandoned its local currency and used major currencies instead, including the euro and the United States dollar.[53]

Use as reserve currency

Since its introduction, the euro has been the second most widely held international reserve currency after the U.S. dollar. The share of the euro as a reserve currency increased from 18% in 1999 to 27% in 2008. Over this period, the share held in U.S. dollar fell from 71% to 64% and that held in RMB fell from 6.4% to 3.3%. The euro inherited and built on the status of the Deutsche Mark as the second most important reserve currency. The euro remains underweight as a reserve currency in advanced economies while overweight in emerging and developing economies: according to the International Monetary Fund[54] the total of euro held as a reserve in the world at the end of 2008 was equal to $1.1 trillion or €850 billion, with a share of 22% of all currency reserves in advanced economies, but a total of 31% of all currency reserves in emerging and developing economies.

The possibility of the euro becoming the first international reserve currency has been debated among economists.[55] Former US Federal Reserve Chairman Alan Greenspan gave his opinion in September 2007 that it was "absolutely conceivable that the euro will replace the US dollar as reserve currency, or will be traded as an equally important reserve currency".[56] In contrast to Greenspan's 2007 assessment, the euro's increase in the share of the worldwide currency reserve basket has slowed considerably since 2007 and since the beginning of the worldwide credit crunch related recession and European sovereign-debt crisis.[54]

Currencies pegged to the euro

DOLLAR AND EURO IN THE WORLD
Worldwide use of the euro and the US dollar:
  External adopters of the euro
  Currencies pegged to the euro
  Currencies pegged to the euro within narrow band
  United States
  External adopters of the US dollar
  Currencies pegged to the US dollar
  Currencies pegged to the US dollar within narrow band

Note: The Belarusian ruble is pegged to the euro, Russian ruble and US$ in a currency basket.

Outside the eurozone, a total of 22 countries and territories that do not belong to the EU have currencies that are directly pegged to the euro including 14 countries in mainland Africa (CFA franc), two African island countries (Comorian franc and Cape Verdean escudo), three French Pacific territories (CFP franc) and three Balkan countries, Bosnia and Herzegovina (Bosnia and Herzegovina convertible mark), Bulgaria (Bulgarian lev) and North Macedonia (Macedonian denar).[7] On 28 July 2009, São Tomé and Príncipe signed an agreement with Portugal which will eventually tie its currency to the euro.[57] Additionally, the Moroccan dirham is tied to a basket of currencies, including the euro and the US dollar, with the euro given the highest weighting.

With the exception of Bosnia, Bulgaria, North Macedonia (which had pegged their currencies against the Deutsche Mark) and Cape Verde (formerly pegged to the Portuguese escudo), all of these non-EU countries had a currency peg to the French Franc before pegging their currencies to the euro. Pegging a country's currency to a major currency is regarded as a safety measure, especially for currencies of areas with weak economies, as the euro is seen as a stable currency, prevents runaway inflation and encourages foreign investment due to its stability.

Within the EU several currencies are pegged to the euro, mostly as a precondition to joining the eurozone. The Bulgarian lev was formerly pegged to the Deutsche Mark; one other EU currency with a direct peg due to ERM II is the Danish krone.

In total, as of 2013, 182 million people in Africa use a currency pegged to the euro, 27 million people outside the eurozone in Europe, and another 545,000 people on Pacific islands.[50]

Since 2005, stamps issued by the Sovereign Military Order of Malta have been denominated in euros, although the Order's official currency remains the Maltese scudo.[58] The Maltese scudo itself is pegged to the euro and is only recognised as legal tender within the Order.

Economics

Optimal currency area

In economics, an optimum currency area, or region (OCA or OCR), is a geographical region in which it would maximise economic efficiency to have the entire region share a single currency. There are two models, both proposed by Robert Mundell: the stationary expectations model and the international risk sharing model. Mundell himself advocates the international risk sharing model and thus concludes in favour of the euro.[59] However, even before the creation of the single currency, there were concerns over diverging economies. Before the late-2000s recession it was considered unlikely that a state would leave the euro or the whole zone would collapse.[60] However the Greek government-debt crisis led to former British Foreign Secretary Jack Straw claiming the eurozone could not last in its current form.[61] Part of the problem seems to be the rules that were created when the euro was set up. John Lanchester, writing for The New Yorker, explains it:

The guiding principle of the currency, which opened for business in 1999, were supposed to be a set of rules to limit a country's annual deficit to three per cent of gross domestic product, and the total accumulated debt to sixty per cent of G.D.P. It was a nice idea, but by 2004 the two biggest economies in the euro zone, Germany and France, had broken the rules for three years in a row.[62]

Transaction costs and risks

Most traded currencies by value
Currency distribution of global foreign exchange market turnover[63]
Rank Currency ISO 4217 code
(symbol)
% of daily trades
(bought or sold)
(April 2016)
1
United States dollar
USD (US$)
87.6%
2
 Euro
EUR (€)
31.4%
3
Japanese yen
JPY (¥)
21.6%
4
Pound sterling
GBP (£)
12.8%
5
Australian dollar
AUD (A$)
6.9%
6
Canadian dollar
CAD (C$)
5.1%
7
Swiss franc
CHF (Fr)
4.8%
8
Renminbi
CNY (元)
4.0%
9
Swedish krona
SEK (kr)
2.2%
10
New Zealand dollar
NZD (NZ$)
2.1%
11
Mexican peso
MXN ($)
1.9%
12
Singapore dollar
SGD (S$)
1.8%
13
Hong Kong dollar
HKD (HK$)
1.7%
14
Norwegian krone
NOK (kr)
1.7%
15
South Korean won
KRW (₩)
1.7%
16
Turkish lira
TRY (₺)
1.4%
17
Russian ruble
RUB (₽)
1.1%
18
Indian rupee
INR (₹)
1.1%
19
Brazilian real
BRL (R$)
1.0%
20
South African rand
ZAR (R)
1.0%
21
Danish krone
DKK (kr)
0.8%
22
Polish złoty
PLN (zł)
0.7%
23
New Taiwan dollar
TWD (NT$)
0.6%
24
Thai baht
THB (฿)
0.4%
25
Malaysian ringgit
MYR (RM)
0.4%
26
Hungarian forint
HUF (Ft)
0.3%
27
Saudi riyal
SAR (﷼)
0.3%
28
Czech koruna
CZK (Kč)
0.3%
29
Israeli shekel
ILS (₪)
0.3%
30
Chilean peso
CLP (CLP$)
0.2%
31
Indonesian rupiah
IDR (Rp)
0.2%
32
Colombian peso
COP (COL$)
0.2%
33
Philippine peso
PHP (₱)
0.1%
34
Romanian leu
RON (L)
0.1%
35
Peruvian sol
PEN (S/)
0.1%
Other 2.1%
Total[note 18] 200.0%

The most obvious benefit of adopting a single currency is to remove the cost of exchanging currency, theoretically allowing businesses and individuals to consummate previously unprofitable trades. For consumers, banks in the eurozone must charge the same for intra-member cross-border transactions as purely domestic transactions for electronic payments (e.g., credit cards, debit cards and cash machine withdrawals).

Financial markets on the continent are expected to be far more liquid and flexible than they were in the past. The reduction in cross-border transaction costs will allow larger banking firms to provide a wider array of banking services that can compete across and beyond the eurozone. However, although transaction costs were reduced, some studies have shown that risk aversion has increased during the last 40 years in the Eurozone.[64]

Price parity

Another effect of the common European currency is that differences in prices—in particular in price levels—should decrease because of the law of one price. Differences in prices can trigger arbitrage, i.e., speculative trade in a commodity across borders purely to exploit the price differential. Therefore, prices on commonly traded goods are likely to converge, causing inflation in some regions and deflation in others during the transition. Some evidence of this has been observed in specific eurozone markets.[65]

Macroeconomic stability

Before the introduction of the euro, some countries had successfully contained inflation, which was then seen as a major economic problem, by establishing largely independent central banks. One such bank was the Bundesbank in Germany; the European Central Bank was modelled on the Bundesbank.[66]

The euro has come under criticism due to its imperialistic style regulation, lack of flexibility and rigidity towards sharing member States on issues such as nominal interest rates.[67] Many national and corporate bonds denominated in euro are significantly more liquid and have lower interest rates than was historically the case when denominated in national currencies. While increased liquidity may lower the nominal interest rate on the bond, denominating the bond in a currency with low levels of inflation arguably plays a much larger role. A credible commitment to low levels of inflation and a stable debt reduces the risk that the value of the debt will be eroded by higher levels of inflation or default in the future, allowing debt to be issued at a lower nominal interest rate.

Unfortunately, there is also a cost in structurally keeping inflation lower than in the United States, UK, and China. The result is that seen from those countries, the euro has become expensive, making European products increasingly expensive for its largest importers. Hence export from the euro zone becomes more difficult.

In general, those in Europe who own large amounts of euros are served by high stability and low inflation.

A monetary union means countries lose the main mechanism of recovery of their international competitiveness by weakening (depreciating) their currency. When wages become too high compared to productivity in exports sector then these exports become more expensive and they are crowded out from the market within a country and abroad. This drive fall of employment and output in exports sector and fall of trade and current account balances. Fall of output and employment in tradable goods sector may be offset by growth of non-exports sectors, especially in construction and services. Increased purchases abroad and negative current account balance can be financed without a problem as long as credit is cheap.[68] The need to finance trade deficit weakens currency making exports automatically more attractive in a country and abroad. A country in a monetary union cannot use weakening of currency to recover its international competitiveness. To achieve this a country has to reduce prices, including wages (deflation). This means years of high unemployment and lower incomes as it was during European sovereign-debt crisis. [69]

Trade

A 2009 consensus from the studies of the introduction of the euro concluded that it has increased trade within the eurozone by 5% to 10%,[70] although one study suggested an increase of only 3%[71] while another estimated 9 to 14%.[72] However, a meta-analysis of all available studies suggests that the prevalence of positive estimates is caused by publication bias and that the underlying effect may be negligible.[73] Although a more recent meta-analysis shows that publication bias decreases over time and that there are positive trade effects from the introduction of the euro, as long as results from before 2010 are taken into account. This may be because of the inclusion of the Financial crisis of 2007–2008 and ongoing integration within the EU.[74] Furthermore, older studies accounting for time trend reflecting general cohesion policies in Europe that started before, and continue after implementing the common currency find no effect on trade.[75][76] These results suggest that other policies aimed at European integration might be the source of observed increase in trade.

Investment

Physical investment seems to have increased by 5% in the eurozone due to the introduction.[77] Regarding foreign direct investment, a study found that the intra-eurozone FDI stocks have increased by about 20% during the first four years of the EMU.[78] Concerning the effect on corporate investment, there is evidence that the introduction of the euro has resulted in an increase in investment rates and that it has made it easier for firms to access financing in Europe. The euro has most specifically stimulated investment in companies that come from countries that previously had weak currencies. A study found that the introduction of the euro accounts for 22% of the investment rate after 1998 in countries that previously had a weak currency.[79]

Inflation

The introduction of the euro has led to extensive discussion about its possible effect on inflation. In the short term, there was a widespread impression in the population of the eurozone that the introduction of the euro had led to an increase in prices, but this impression was not confirmed by general indices of inflation and other studies.[80][81] A study of this paradox found that this was due to an asymmetric effect of the introduction of the euro on prices: while it had no effect on most goods, it had an effect on cheap goods which have seen their price round up after the introduction of the euro. The study found that consumers based their beliefs on inflation of those cheap goods which are frequently purchased.[82] It has also been suggested that the jump in small prices may be because prior to the introduction, retailers made fewer upward adjustments and waited for the introduction of the euro to do so.[83]

Exchange rate risk

One of the advantages of the adoption of a common currency is the reduction of the risk associated with changes in currency exchange rates. It has been found that the introduction of the euro created "significant reductions in market risk exposures for nonfinancial firms both in and outside Europe".[84] These reductions in market risk "were concentrated in firms domiciled in the eurozone and in non-euro firms with a high fraction of foreign sales or assets in Europe".

Financial integration

The introduction of the euro seems to have had a strong effect on European financial integration. According to a study on this question, it has "significantly reshaped the European financial system, especially with respect to the securities markets [...] However, the real and policy barriers to integration in the retail and corporate banking sectors remain significant, even if the wholesale end of banking has been largely integrated."[85] Specifically, the euro has significantly decreased the cost of trade in bonds, equity, and banking assets within the eurozone.[86] On a global level, there is evidence that the introduction of the euro has led to an integration in terms of investment in bond portfolios, with eurozone countries lending and borrowing more between each other than with other countries.[87]

Effect on interest rates

Long-term interest rates of eurozone countries since 1993
Secondary market yields of government bonds with maturities of close to 10 years

As of January 2014, and since the introduction of the euro, interest rates of most member countries (particularly those with a weak currency) have decreased. Some of these countries had the most serious sovereign financing problems.

The effect of declining interest rates, combined with excess liquidity continually provided by the ECB, made it easier for banks within the countries in which interest rates fell the most, and their linked sovereigns, to borrow significant amounts (above the 3% of GDP budget deficit imposed on the eurozone initially) and significantly inflate their public and private debt levels.[88] Following the financial crisis of 2007–2008, governments in these countries found it necessary to bail out or nationalise their privately held banks to prevent systemic failure of the banking system when underlying hard or financial asset values were found to be grossly inflated and sometimes so near worthless there was no liquid market for them.[89] This further increased the already high levels of public debt to a level the markets began to consider unsustainable, via increasing government bond interest rates, producing the ongoing European sovereign-debt crisis.

Price convergence

The evidence on the convergence of prices in the eurozone with the introduction of the euro is mixed. Several studies failed to find any evidence of convergence following the introduction of the euro after a phase of convergence in the early 1990s.[90][91] Other studies have found evidence of price convergence,[92][93] in particular for cars.[94] A possible reason for the divergence between the different studies is that the processes of convergence may not have been linear, slowing down substantially between 2000 and 2003, and resurfacing after 2003 as suggested by a recent study (2009).[95]

Tourism

A study suggests that the introduction of the euro has had a positive effect on the amount of tourist travel within the EMU, with an increase of 6.5%.[96]

Exchange rates

Flexible exchange rates

The ECB targets interest rates rather than exchange rates and in general does not intervene on the foreign exchange rate markets. This is because of the implications of the Mundell–Fleming model, which implies a central bank cannot (without capital controls) maintain interest rate and exchange rate targets simultaneously, because increasing the money supply results in a depreciation of the currency. In the years following the Single European Act, the EU has liberalised its capital markets and, as the ECB has inflation targeting as its monetary policy, the exchange-rate regime of the euro is floating.

Against other major currencies

The euro is the second-most widely held reserve currency after the U.S. dollar. After its introduction on 4 January 1999 its exchange rate against the other major currencies fell reaching its lowest exchange rates in 2000 (3 May vs Pound sterling, 25 October vs the U.S. dollar, 26 October vs Japanese yen). Afterwards it regained and its exchange rate reached its historical highest point in 2008 (15 July vs U.S. dollar, 23 July vs Japanese yen, 29 December vs Pound sterling). With the advent of the global financial crisis the euro initially fell, to regain later. Despite pressure due to the European sovereign-debt crisis the euro remained stable.[97] In November 2011 the euro's exchange rate index – measured against currencies of the bloc's major trading partners – was trading almost two percent higher on the year, approximately at the same level as it was before the crisis kicked off in 2007.[98]

Euro exchange rate against U.S. dollar (USD), Pound sterling (GBP) and Japanese yen (JPY), starting from 1999.

Euro exchange rate to USD
Euro exchange rate to GBP
Euro exchange rate to JPY
  • Current and historical exchange rates against 32 other currencies (European Central Bank): link
Current EUR exchange rates
From Google Finance: AUD CAD CHF GBP HKD JPY USD RUB INR CNY
From Yahoo! Finance: AUD CAD CHF GBP HKD JPY USD RUB INR CNY
From XE: AUD CAD CHF GBP HKD JPY USD RUB INR CNY
From OANDA: AUD CAD CHF GBP HKD JPY USD RUB INR CNY
From fxtop.com: AUD CAD CHF GBP HKD JPY USD RUB INR CNY

Linguistic issues

EUR 5 obverse (2013 issue)
5 euro note from the new Europa series written in Latin (EURO) and Greek (ΕΥΡΩ) alphabets, but also in the Cyrillic (ЕВРО) alphabet, as a result of Bulgaria joining the European Union in 2007.

The formal titles of the currency are euro for the major unit and cent for the minor (one-hundredth) unit and for official use in most eurozone languages; according to the ECB, all languages should use the same spelling for the nominative singular.[99] This may contradict normal rules for word formation in some languages, e.g., those in which there is no eu diphthong. Bulgaria has negotiated an exception; euro in the Bulgarian Cyrillic alphabet is spelled as eвро (evro) and not eуро (euro) in all official documents.[100] In the Greek script the term ευρώ (evró) is used; the Greek "cent" coins are denominated in λεπτό/ά (leptó/á). Official practice for English-language EU legislation is to use the words euro and cent as both singular and plural,[101] although the European Commission's Directorate-General for Translation states that the plural forms euros and cents should be used in English.[102]

See also

Notes

  1. ^ €100 and €200 notes from the Europa series will start circulating on 28 May 2019, €500 note is discontinued
  2. ^ Except Northern Cyprus that uses Turkish lira
  3. ^ Including overseas departments (French Guiana, Guadeloupe, Martinique, Mayotte and Réunion)
  4. ^ Except the Italian exclave of Campione d'Italia in Switzerland that uses the Swiss franc.
  5. ^ Only the European part of the country is part of the European Union and uses the euro. The Caribbean Netherlands introduced the United States dollar in 2011. Curaçao, Sint Maarten and Aruba have their own currencies, which are pegged to the dollar.
  6. ^ "Monetary Agreement between the European Union and the Principality of Andorra". Official Journal of the European Union. 17 December 2011. Retrieved 8 September 2012.
  7. ^ "By monetary agreement between France (acting for the EC) and Monaco". Retrieved 30 May 2010.
  8. ^ "By monetary agreement between Italy (acting for the EC) and San Marino". Retrieved 30 May 2010.
  9. ^ "By monetary agreement between Italy (acting for the EC) and Vatican City". Retrieved 30 May 2010.
  10. ^ "By the third protocol to the Cyprus adhesion Treaty to EU and British local ordinance" (PDF). Retrieved 17 July 2011.
  11. ^ "By agreement of the EU Council". Retrieved 30 May 2010.
  12. ^ "By UNMIK administration direction 1999/2". Unmikonline.org. Archived from the original on 7 June 2011. Retrieved 30 May 2010.
  13. ^ See Montenegro and the euro
  14. ^ As of 26 April 2013:
    Total EUR currency (coins and banknotes) in circulation 771.5 (banknotes) + 21.032 (coins) =792.53 billion EUR * 1.48 (exchange rate) = 1,080 billion USD
    Total USD currency (coins and banknotes) in circulation 859 billion USD
  15. ^ In the quotation, the epsilon is actually represented with the Cyrillic capital letter Ukrainian ye (Є, U+0404) instead of the technically more appropriate Greek lunate epsilon symbol (ϵ, U+03F5).
  16. ^ by means of Council Regulation 2866/98 (EC) of 31 December 1998.
  17. ^ by Council Regulation 1478/2000 (EC) of 19 June 2000
  18. ^ The total sum is 200% because each currency trade always involves a currency pair; one currency is sold (e.g. US$) and another bought (€). Therefore each trade is counted twice, once under the sold currency ($) and once under the bought currency (€). The percentages above are the percent of trades involving that currency regardless of whether it is bought or sold, e.g. the U.S. Dollar is bought or sold in 87% of all trades, whereas the Euro is bought or sold 31% of the time.

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    This term is sometimes adopted by the media (Google hits for the phrase)
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Further reading

  • Bartram, Söhnke M.; Taylor, Stephen J.; Wang, Yaw-Huei (May 2007). "The Euro and European Financial Market Dependence". Journal of Banking and Finance. 51 (5): 1461–1481. SSRN 924333.
  • Bartram, Söhnke M.; Karolyi, G. Andrew (October 2006). "The Impact of the Introduction of the Euro on Foreign Exchange Rate Risk Exposures". Journal of Empirical Finance. 13 (4–5): 519–549. doi:10.1016/j.jempfin.2006.01.002. SSRN 299641.
  • Baldwin, Richard; Wyplosz, Charles (2004). The Economics of European Integration. New York: McGraw Hill. ISBN 978-0-07-710394-1.
  • Buti, Marco; Deroose, Servaas; Gaspar, Vitor; Nogueira Martins, João (2010). The Euro. Cambridge: Cambridge University Press. ISBN 978-92-79-09842-0.
  • Jordan, Helmuth (2010). "Fehlschlag Euro". Dorrance Publishing. Archived from the original on 16 September 2010. Retrieved 28 January 2011.
  • Simonazzi, A.; Vianello, F. (2001). "Financial Liberalization, the European Single Currency and the Problem of Unemployment". In Franzini, R.; Pizzuti, R.F. (eds.). Globalization, Institutions and Social Cohesion. Springer. ISBN 978-3-540-67741-3.

External links

Daniele De Rossi

Daniele De Rossi (Italian pronunciation: [daˈnjɛːle de ˈrossi]; born 24 July 1983) is an Italian professional footballer who plays as a defensive midfielder for Roma and formerly the Italy national team. De Rossi inherited the captaincy of Roma at the start of the 2017–18 season following the retirement of Francesco Totti.

De Rossi made his professional debut with Roma during the 2001–02 season, and made his Serie A debut the following year; he has remained with the side ever since. With the club, he has won the Coppa Italia twice and the 2007 Supercoppa Italiana. He was named Serie A Young Footballer of the Year in 2006, and the Serie A Italian Footballer of the Year in 2009.

De Rossi represented Italy at under-19, under-20, under-21 and senior levels, winning the 2004 UEFA European Under-21 Football Championship, and also represented Italy at the 2004 Olympics, winning a bronze medal. From his senior international debut in 2004, until his retirement from the national team in 2017, he earned 117 caps, and is Italy's fourth-highest capped player of all time. With 21 goals, he is the highest scoring midfielder for Italy post-World War II, and Italy's all-time second most prolific midfielder behind Adolfo Baloncieri. He was part of the 2006 FIFA World Cup-winning squad and has also participated at UEFA Euro 2008, the 2009 FIFA Confederations Cup, the 2010 FIFA World Cup, UEFA Euro 2012 (finishing in second place), the 2013 FIFA Confederations Cup (finishing in third place), the 2014 FIFA World Cup, and UEFA Euro 2016. De Rossi was named in the Euro 2012 Team of the Tournament for his performances. Along with Mario Balotelli and Giuseppe Rossi, De Rossi is Italy's top scorer in the Confederations Cup, with two goals. In 2009, the French sports magazine L'Équipe named De Rossi as the eighth-best midfielder in the world.

David Silva

David Josué Jiménez Silva (Spanish pronunciation: [daˈβið ˈsilβa]; born 8 January 1986) is a Spanish professional footballer who plays and captains English club Manchester City. Silva plays mainly as a central or an attacking midfielder but can also play as a winger or second striker. He is predominantly a left-footed player and his passing ability and possession-retaining qualities have earned him the nicknames "Merlin" and "El Mago" from his teammates and fans and he is considered by many to be one of the best midfielders in Europe.Silva spent six years of his professional career with Valencia CF, appearing in more than 150 games and winning one Copa del Rey in 2008, before moving in the summer of 2010 to Manchester City. Since joining City, Silva has appeared in over 300 matches and is in his eighth season at the club. He has won two FA Cups, four League Cups and four Premier League titles. He is regarded as one of Manchester City's greatest ever players alongside Billy Meredith, Bert Trautmann, Colin Bell and Sergio Agüero.Silva also represented Spain, from his debut for the senior team in 2006 until his international retirement in 2018. He started his international career at the age of 20. He is one of 13 Spanish players to have amassed 100 caps, he scored 35 goals in his international career, making him the 4th highest goalscorer in Spain's history, and also provided 28 assists, making him 2nd highest assist provider in Spain's history. He was an integral member of the squads that won three consecutive international tournaments – UEFA Euro 2008, 2010 FIFA World Cup, and UEFA Euro 2012.

Disneyland Paris

Disneyland Paris, originally Euro Disney Resort, is an entertainment resort in Marne-la-Vallée, France, a new town located 32 km (20 mi) east of the centre of Paris. It encompasses two theme parks, many resort hotels, Disney Nature Resorts, a shopping, dining, and entertainment complex, and a golf course, in addition to several additional recreational and entertainment venues. Disneyland Park is the original theme park of the complex, opening with the resort on 12 April 1992. A second theme park, Walt Disney Studios Park, opened in 2002. Disneyland Paris celebrated its 25th anniversary in 2017. In 25 years, 320 million people visited Disneyland Paris making it the most visited theme park in Europe. The resort is the second Disney park to open outside the United States following the opening of the Tokyo Disney Resort in 1983 and is the largest Disney resort to open outside of the United States

EuroLeague

The EuroLeague, known as the Turkish Airlines EuroLeague for sponsorship reasons, is the top-tier European professional basketball club competition, organized by Euroleague Basketball since 2000.

Introduced in 2000, the competition replaced the FIBA EuroLeague (which was previously called the FIBA European Champions Cup, or simply the European Cup), which had been run by FIBA since 1958. The FIBA European Champions Cup and the EuroLeague are considered to be the same competition, with the change of name being simply a re-branding.

The EuroLeague is one of the most popular indoor sports leagues in the world, with an average attendance of 8,780 for league matches in the 2017–18 season. That was the fifth-highest of any professional indoor sports league in the world (the highest outside the United States), and the second-highest of any professional basketball league in the world, only behind the National Basketball Association (NBA).

The EuroLeague title has been won by 21 different clubs, 13 of which have won the title more than once. The most successful club in the competition is Real Madrid, with ten titles. The current champions are CSKA Moscow, who defeated Anadolu Efes in the 2019 final, winning the club's eighth title.

Euro sign

The euro sign (€) is the currency sign used for the euro, the official currency of the European Union (EU) and some non-EU countries (Kosovo and Montenegro). The design was presented to the public by the European Commission on 12 December 1996. It consists of a stylized letter E (or epsilon), crossed by two lines instead of one. The character is encoded in Unicode at U+20AC € EURO SIGN (HTML € · €). In English, the sign precedes the value (for instance, €10, not 10 €, unlike most other European languages). In some style guides, the euro sign is not spaced (10€).

Eurodance

Eurodance (sometimes known as Euro-NRG or Euro) is a genre of electronic dance music that originated in the late 1980s in Europe. It combines many elements of techno, Hi-NRG, house music and Euro disco.This genre of music is heavily influenced by the use of rich melodic vocals, either exclusively by itself or inclusively with rapped verses. This, combined with cutting-edge synthesizer, strong bass rhythm and melodic hooks, establishes the core foundation of Eurodance music. Eurodance production continues to evolve with a more modernized style.

European emission standards

European emission standards define the acceptable limits for exhaust emissions of new vehicles sold in the European Union and EEA member states. The emission standards are defined in a series of European Union directives staging the progressive introduction of increasingly stringent standards.

Eurozone

The eurozone, officially called the euro area, is a monetary union of 19 of the 28 European Union (EU) member states which have adopted the euro (€) as their common currency and sole legal tender. The monetary authority of the eurozone is the Eurosystem. The other nine members of the European Union continue to use their own national currencies, although most of them are obliged to adopt the euro in the future.

The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain. Other EU states (except for Denmark and the United Kingdom) are obliged to join once they meet the criteria to do so. No state has left, and there are no provisions to do so or to be expelled. Andorra, Monaco, San Marino, and Vatican City have formal agreements with the EU to use the euro as their official currency and issue their own coins. Kosovo and Montenegro have adopted the euro unilaterally, but these countries do not officially form part of the eurozone and do not have representation in the European Central Bank (ECB) or in the Eurogroup.The ECB, which is governed by a president and a board of the heads of national central banks, sets the monetary policy of the zone. The principal task of the ECB is to keep inflation under control. Though there is no common representation, governance or fiscal policy for the currency union, some co-operation does take place through the Eurogroup, which makes political decisions regarding the eurozone and the euro. The Eurogroup is composed of the finance ministers of eurozone states, but in emergencies, national leaders also form the Eurogroup.

Since the financial crisis of 2007–08, the eurozone has established and used provisions for granting emergency loans to member states in return for enacting economic reforms. The eurozone has also enacted some limited fiscal integration: for example, in peer review of each other's national budgets. The issue is political and in a state of flux in terms of what further provisions will be agreed for eurozone change.

France national football team

The France national football team (French: Équipe de France de football) represents France in international football and is controlled by the French Football Federation, also known as FFF, or in French: Fédération française de football. The team's colours are blue, white and red, and the coq gaulois its symbol. France are colloquially known as Les Bleus (The Blues). The French side are the reigning World Cup holders, having won the 2018 FIFA World Cup on 15 July 2018.

France play home matches at the Stade de France in Saint-Denis, Paris, and their manager is Didier Deschamps. They have won two FIFA World Cups, two UEFA European Championships, two FIFA Confederations Cups and one Olympic tournament. France experienced much of its success in four major eras: in the 1950s, 1980s, late 1990s/early 2000s, and mid/late 2010s, respectively, which resulted in numerous major honours. France was one of the four European teams that participated in the inaugural World Cup in 1930 and, although having been eliminated in the qualification stage six times, is one of only three teams that have entered every World Cup qualifying cycle.In 1958, the team, led by Raymond Kopa and Just Fontaine, finished in third place at the FIFA World Cup. In 1984, France, led by Ballon d'Or winner Michel Platini, won UEFA Euro 1984 and Football at the 1984 Summer Olympics.

Under the captaincy of Didier Deschamps and three-time FIFA World Player of the Year Zinedine Zidane, France won the FIFA World Cup in 1998. Two years later, the team triumphed at UEFA Euro 2000. France won the FIFA Confederations Cup in 2001 and 2003, and reached the 2006 FIFA World Cup final, which it lost 5–3 on penalties to Italy. The team also reached the final of UEFA Euro 2016, where they lost 1–0 to Portugal in extra time. France won the 2018 FIFA World Cup, defeating Croatia 4–2 in the final match on 15 July 2018. This was the second time they had won the tournament after winning it on home soil in 1998.

France was the first national team that has won the three most important men's titles recognized by FIFA: the World Cup, the Confederations Cup, and the Olympic tournament after victory in the Confederations Cup in 2001. Since 2001, Argentina (after the 2004 Olympics) and Brazil (after the 2016 Olympics) are the other two national teams that have won these three titles. They have also won their respective continental championship (Copa América for Argentina and Brazil, and UEFA European Championship for France).

Iker Casillas

Iker Casillas Fernández (Spanish pronunciation: [ˈikeɾ kaˈsiʎas feɾˈnandeθ]; born 20 May 1981) is a Spanish professional footballer who plays as a goalkeeper for Portuguese club Porto and the Spain national team. Popularly dubbed "San Iker" ("Saint Iker") for his ability to produce spectacular saves, Casillas is widely considered to be one of the greatest goalkeepers of all time, known for his athleticism, quick reactions and outstanding shot-stopping ability.Casillas began his youth career with Real Madrid in 1990. After gaining promotion to the senior team in 1999, he remained with the club for 16 seasons, later serving as club captain. During his highly successful time in Madrid, he won five La Liga titles, two Copa del Rey titles, four Supercopa de España titles, three UEFA Champions League titles, two UEFA Super Cups, one Intercontinental Cup and the FIFA Club World Cup. He also amassed 725 appearances for Real Madrid, the second most in club history, before departing in 2015 to join Porto on a free transfer. In Portugal, Casillas captured a Primeira Liga and Supertaça Cândido de Oliveira title.

Casillas has played for the Spanish national team a record 167 times, and has been an international since June 2000, making him the joint sixth-most capped male footballer in history, and the joint second-most capped European player of all time. He became the nation's first-choice goalkeeper at the 2002 FIFA World Cup, and went on to play at UEFA Euro 2004 and the 2006 World Cup. In 2008, he was made captain, and led the team to that year's European Championship. He also led Spain to their first World Cup in 2010, and retained the European Championship in 2012. In 2014, Casillas also became one of four players to represent Spain at four World Cups.Casillas was nominated for the Ballon d'Or award in 2008, ranking fourth overall. In 2012, he was voted into the UEFA Team of the Year for a record sixth consecutive time. Casillas also holds the record for most appearances by a goalkeeper in the FIFPro World XI, and is the record appearances holder in the UEFA Champions League. He has also played over 1,000 professional matches, and won all major club and international championship titles for which he was eligible with Real Madrid and Spain.

Spain national football team

The Spain national football team (Spanish: Selección Española de Fútbol) represents Spain in international men's association football since 1920, and is controlled by the Royal Spanish Football Federation, the governing body for football in Spain.

Spain is one of the eight national teams to have been crowned worldwide champions, having participated in a total of 15 of 21 FIFA World Cups and qualifying consistently since 1978. Spain also has won three continental titles, having appeared at 10 of 15 UEFA European Championships.

Spain became the first European team to win a FIFA World Cup outside Europe, having won the 2010 tournament in South Africa, as well as having won back-to-back European titles in Euro 2008 and Euro 2012, defeating Germany and Italy in the respective finals, making them the only national team with three major titles in a row. According to this, from 2008 to 2013, the national team won the FIFA Team of the Year, the second-most of any nation, behind only Brazil. Also between November 2006 and June 2009, Spain went undefeated for a record-equalling 35 consecutive matches, a record shared with Brazil. Their achievements have led many experts and commentators to consider the 2008–2012 Spanish squads, among the best ever international sides in world football.

UEFA Euro 2008

The 2008 UEFA European Football Championship, commonly referred to as UEFA Euro 2008 or simply Euro 2008, was the 13th UEFA European Football Championship, a quadrennial football tournament contested by European nations. It took place in Austria and Switzerland (both hosting the tournament for the first time) from 7 to 29 June 2008.

The tournament was won by Spain, who defeated Germany 1–0 in the final. Spain were only the second nation to win all their group stage fixtures and then the European Championship itself - an accomplishment matched by France in 1984. Spain were also the first team since Germany in 1996 to win the tournament undefeated.

Greece were the defending champions going into the tournament, having won UEFA Euro 2004. They recorded the worst finish in Euro 2008, losing their three group fixtures and collecting the least amount of prize money. Throughout 31 matches, the participating nations totalled 77 goals, the same as the previous tournament.

Austria and Switzerland automatically qualified as hosts; the remaining 14 teams were determined through qualifying matches, which began in August 2006. As European champions, Spain earned the right to compete for the 2009 FIFA Confederations Cup in South Africa.

UEFA Euro 2012

The 2012 UEFA European Championship, commonly referred to as UEFA Euro 2012 or simply Euro 2012, was the 14th European Championship for men's national football teams organised by UEFA. The final tournament, held between 8 June and 1 July 2012, was co-hosted for the first time by Poland and Ukraine, and was won by Spain, who beat Italy 4–0 in the final at the Olympic Stadium, Kiev, Ukraine.Poland and Ukraine's bid was chosen by UEFA's Executive Committee on 18 April 2007. The two host teams qualified automatically while the remaining 14 finalists were decided through a qualifying competition, featuring 51 teams, from August 2010 to November 2011. This was the last European Championship to employ the 16-team finals format in use since 1996; from Euro 2016 onward, it was expanded to 24 finalists.

Euro 2012 was played at eight venues, four in each host country. Five new stadiums were built for the tournament, and the hosts invested heavily in improving infrastructure such as railways and roads at UEFA's request. Euro 2012 set attendance records for the 16-team format, for the highest aggregate attendance (1,440,896) and average per game (46,481).

Spain became the first team to win two consecutive European Championships, and also three straight major tournaments (Euro 2008, 2010 World Cup and Euro 2012). Spain had already gained entry to the 2013 Confederations Cup by winning the 2010 World Cup, so runners-up Italy qualified instead. As at Euro 2008 in Austria and Switzerland, both 2012 host nations were eliminated in the group stage.

UEFA Euro 2016

The 2016 UEFA European Championship, commonly referred to as UEFA Euro 2016 or simply Euro 2016, was the 15th UEFA European Championship, the quadrennial international men's football championship of Europe organised by UEFA. It was held in France from 10 June to 10 July 2016. Spain were the two-time defending champions, having won the 2008 and 2012 tournaments, but were eliminated in the round of 16 by Italy. Portugal won the tournament for the first time, following a 1–0 victory after extra time over the host team, France, in the final played at the Stade de France.

For the first time, the European Championship final tournament was contested by 24 teams, having been expanded from the 16-team format used since 1996. Under the new format, the finalists contested a group stage consisting of six groups of four teams, followed by a knockout phase including three rounds and the final. Nineteen teams – the top two from each of the nine qualifying groups and the best third-placed team – joined France in the final tournament, who qualified automatically as host; a series of two-legged play-off ties between the remaining third-placed teams in November 2015 decided the last four finalist spots.

France was chosen as the host nation on 28 May 2010, after a bidding process in which they beat Italy and Turkey for the right to host the 2016 finals. The matches were played in ten stadiums in ten cities: Bordeaux, Lens, Lille Métropole, Décines-Charpieu, Marseille, Nice, Paris, Saint-Denis, Saint-Étienne, and Toulouse. It was the third time that France hosted the finals, after the inaugural tournament in 1960 and the 1984 finals.

As the winners, Portugal earned the right to compete at the 2017 FIFA Confederations Cup in Russia.

UEFA Euro 2020

The 2020 UEFA European Football Championship, commonly referred to as UEFA Euro 2020 or simply Euro 2020, is scheduled to be the 16th UEFA European Championship, the quadrennial international men's football championship of Europe organised by UEFA.It is scheduled to be held in 12 cities in 12 European countries from 12 June to 12 July 2020. Portugal are the defending champions, winning the 2016 edition. For the first time, the video assistant referee (VAR) system will be used at the UEFA European Championship.Former UEFA President Michel Platini said the tournament being hosted in several nations is a "romantic" one-off event to celebrate the 60th "birthday" of the European Championship competition. Wembley Stadium in London is planned to host the semi-finals and final for the second time, having done so before at the 1996 tournament.

UEFA Euro 2020 qualifying

The UEFA Euro 2020 qualifying tournament is a football competition that is being played from March 2019 to March 2020 to determine the 24 UEFA member men's national teams that will advance to the UEFA Euro 2020 final tournament. The competition is linked with the 2018–19 edition of the UEFA Nations League, giving countries a secondary route to qualify for the final tournament. For the first time since 1976, no team will automatically qualify for the UEFA European Championship as the host country.There are 55 national teams participating in the qualifying process, with Kosovo taking part for the first time. The draw took place at the Convention Centre Dublin, Republic of Ireland, on 2 December 2018.

UEFA European Championship

The UEFA European Championship (known informally as the Euros) is the primary association football competition contested by the senior men's national teams of the members of the Union of European Football Associations (UEFA), determining the continental champion of Europe. Held every four years since 1960, in the even-numbered year between World Cup tournaments, it was originally called the UEFA European Nations' Cup, changing to the current name in 1968. Starting with the 1996 tournament, specific championships are often referred to in the form "UEFA Euro [year]"; this format has since been retroactively applied to earlier tournaments.

Prior to entering the tournament all teams other than the host nations (which qualify automatically) compete in a qualifying process. The championship winners earn the opportunity to compete in the following FIFA Confederations Cup, but are not obliged to do so.The 15 European Championship tournaments have been won by ten national teams: Germany and Spain each have won three titles, France has two titles, and Soviet Union, Italy, Czechoslovakia, Netherlands, Denmark, Greece and Portugal have won one title each. To date, Spain is the only team in history to have won consecutive titles, doing so in 2008 and 2012. It is the second most watched football tournament in the world after the FIFA World Cup. The Euro 2012 final was watched by a global audience of around 300 million.The most recent championship, hosted by France in 2016, was won by Portugal, who beat France 1–0 in the final at the Stade de France in Saint-Denis after extra time. The final also attracted 284 million viewers which is the second most viewed game in European tournament history.

Xavi

Xavier Hernández Creus (Catalan: [ˈʃaβi əɾˈnandəs ˈkɾɛws], Spanish: [ˈtʃaβj eɾˈnandeθ ˈkɾeus]; born 25 January 1980) is a retired Spanish professional footballer who played as a midfielder. He is known for his long spells playing for Barcelona (17 years) and internationally for Spain (133 caps).

Xavi joined La Masia, the Barcelona youth academy, at age 11, and made his first-team debut against Mallorca in August 1998. In all, he played over 700 matches, a club record, and scored 85 goals. Xavi is the first player in the club's history to play 150 European and Club World Cup matches. Highly regarded for his humble persona and team ethos, Xavi is viewed as being the embodiment of the tiki-taka passing style of play, and is widely considered to be one of the greatest central midfielders of all time. He is also considered by many to be the greatest Spanish player ever.With Spain, Xavi won the FIFA World Youth Championship in 1999, and the Olympic silver medal at the 2000 Olympics. After making his senior team debut in 2000, he was capped 133 times for the Spain national team, and was an influential figure in the team's successes. He played an integral role in Spain's victory at the 2010 World Cup, as well as their wins at both Euro 2008 and Euro 2012. He was named Player of the Tournament by UEFA at Euro 2008, and was named in the UEFA Euro Team of the Tournament in 2008 and 2012. At Euro 2012, with his two assists in the final, Xavi became the first player to register assists in two separate Euro finals, having set up the only goal in the final four years earlier. He had a 91% passing success rate at the 2010 World Cup and was named in the World Cup All-Star Team. After the 2014 World Cup, Xavi announced his retirement from international football.With Barcelona, Xavi won eight La Liga titles and four UEFA Champions League titles. He has won 31 trophies for Barcelona and Spain, a total only surpassed by Andrés Iniesta as the most decorated Spanish player in history. He came third in the 2009 FIFA World Player of the Year, followed by third place for its successor award, the FIFA Ballon d'Or, in 2010 and 2011. In 2011, he was runner up to Lionel Messi for the UEFA Best Player in Europe Award. He has been awarded the IFFHS World's Best Playmaker award for four years: 2008, 2009, 2010, 2011. Xavi has been included in the UEFA Team of the Year for five years (2008, 2009, 2010, 2011, 2012), and has been voted into the FIFA World XI on six occasions: 2008, 2009, 2010, 2011, 2012, 2013. He was awarded the Prince of Asturias Award for Sports in 2012.

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