The Euro (€) is the common currency of 15 member countries of the European Union (EU.) The Euro has been introduced as a transaction currency in 1999 and the cash appeared in January 2002 in order to facilitate business transactions within the 15 member states. It has become the second biggest reserve currency since.
The euro area is one of the largest economies in the world, with a population of 318 million in 2006. The European Union as a whole has 27 Member States and a population of 493 million. By comparison, the United States and Japan have 299 and 128 million inhabitants respectively.
In terms of gross domestic product (GDP) expressed in purchasing power parities , the United States was the largest economy in 2006, with 19. 7% of world GDP, followed by the euro area with 14.3%.
The monetary policy of the € is governed by the European Central Bank (ECB) whose single mandate is to keep inflation below a ceiling of 2% and money supply M3 growth below a target rate of 4.5%.
While the ECB has failed to keep M3 growth below the target since the inception of the € it had succeeded in keeping official Eurozone inflation below the 2% target until August 2007.
After reaching a record of 4% inflation - double the target - in July 2008 strongly falling oil prices brought some relief as inflation receded to 3.8% in August 2008.
M3 growth is still racing at an annual rate of 9.5% or more than double the reference rate of 4.5%.
More than 50 countries have pegged their currency to the Euro as of September 2008.
The Euro was originally established by 11 member states that form the so called Eurozone and has expanded to 15 countries as of September 2008
Current Euro members are listed here in alphabetical order. Find the year of initial membership in brackets.