At the beginning of 1999, most of the largest European countries locked their currency against a new common one called the euro. It existed only as an accounting currency for 3 years, and then in 2002 the banknotes and coins were introduced, and all the marks, francs, pesedas and liras etc. were traded in for the new common currency in the area called the Eurozone.
The Eurozone today
There are currently 15 countries where the euro is the only currency, as well as several small countries where it is accepted as a part of a formal agreement, even though they aren’t officially Eurozone members with voting rights.
15 Eurozone countries
Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovenia, and Spain
It’s also the main currency in:
Monaco, San Marino, and Vatican City
Countries in Europe that have their own currencies (Non-euro countries)
Bulgaria, Czech Republic, Denmark, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, Sweden, and the United Kingdom
Banknotes and coins
The coin denominations are: €2, €1, 50 cent, 20 cent, 10 cent, 5 cent, 2 cent and 1 cent
Notes are issued in: €500, €200, €100, €50, €20, €10, €5
The notes are identical throughout the Eurozone, but the coins have one side dedicated to the country where it was issued, so this can be a bit confusing at first, though they are all accepted everywhere.
(Americans should pay attention to the fact that the smallest banknote is €5, and the €1 and €2 are coins. This takes some getting used to, as it becomes easy to accumulate over €10 in coins if you don’t remember to spend them as you go.)
What this means for travelers
While prices in several Eurozone countries appear to have risen directly as a result of the new currency, it’s had a very positive affect on travelers who are stringing several countries together. Since the simple act of exchanging currency would often cost up to 5% of the amount exchanged, it’s not only easier but also cheaper going from one Eurozone country to another, at least compared to pre-2002. Another hidden benefit is that travelers no longer have to manage their last bits of money as they approach the border to prevent having to change currency yet again, costing up to another 5%.
The cheapest ways to exchange money into euros
Many travelers who are new to border crossings feel better buying foreign currency at home before they even leave, but this isn’t really necessary and it’s also possibly the most expensive way to exchange. When exchange banknotes for different banknotes you can expect to pay anywhere from 2% up to even well over 5% if you do it at a hotel or a place other than a financial business.
Automatic Teller Machines
These are now common all over the world (or at least all over Europe) and you’ll find them waiting for you in every airport and train station you might arrive in. Most experienced travelers don’t even bother getting any currency until they touch down at a European airport, and then they pull as much as they can out of an ATM machine once there. You’ll probably pay a fee of between US$3 and US$5 for this withdrawal, but if you take as much as you can out (usually €300 to €400) that will work out to about one percent, which is your cheapest option for obtaining cash. The machines in Europe all use a 4-digit code, and most don’t have letters alongside the numbers, so make sure you arrive with 4 numbers memorized, even if it means having your bank issue you a new code.
The other best strategy is to use your credit card as often as is possible. In some parts of Europe many restaurants and even smaller hotels won’t take them, but generally you can make most or all larger purchases on credit. Your bank will compute the exchange rate on that day and will add no commission, though many will add a small percentage fee for a foreign transaction. Again, this will give you the best rates available, and also carries far less risk than carrying around cash.