Currency The euro (€) is the currency in Belgium, Holland, and Luxembourg. There are euro cents to each euro. Eight euro coins are in circulation: €, €, €, €, €, € (1, 2, 5, 10, 20, and 50 euro cents, respectively), 1€, and 2€. Franc (s): 1, 5, 20, On January 1, , the European Monetary Union introduced the euro as a common currency to be used by the financial institutions of member countries; Three years later, on 1 January , the euro became the sole currency for everyday transactions with the member countries. Founded in , Luxembourg became a grand duchy in and an independent state under the .
Admittedly, the three Benelux countries are by no means inexpensive. Clearly, whether you ij with this statement will depend on how much you can bring to bear -- or bear to bring -- in the way of financial resources. If you're used to the prices in New York and London, those in Amsterdam, Brussels, and Luxembourg City likely won't seem too out of whack. But opportunities for scoring genuine bargains run a thin gamut from few and far between to nonexistent.
In your favor is that the natives themselves display a reluctance to part unnecessarily with a euro. A sound rule of thumb is that if you lodge, dine, and entertain yourself in the same places where "ordinary" locals do, you can limit the financial damage. There are euro os to each euro. Eight euro coins are in circulation: 0.
Exchange rates at currency-exchange offices at each country's national airport are lousy. Other currency-exchange what currency is used in luxembourg throughout the Benelux countries, which are open regular hours plus evenings and weekends, may charge a low commission, or none at all, but give a how to create an xsd rate of exchange. Hotels should be avoided as a currency-exchange resource unless there's no alternative.
ATMs are widespread in Benelux cities and towns, and you can even find them in some villages. They accept bank cards and credit cards linked to the Cirrus tel.
Be sure you know your personal identification number PIN and daily withdrawal limit before you depart. If you have a five- or luxembourb PIN, also be sure to obtain a four-digit number from your bank to use in the Benelux. Some cards with five- or six-digit PINs might work, but it depends on what bank you use. The best advice is to get a four-digit number from your bank.
In addition, the bank from which you withdraw cash may charge its own fee. For international withdrawal fees, ask your bank. American Express is often accepted, mostly in the middle- and upper-bracket category.
Diners Club is not as commonly accepted as American Express. Credit cards are not as commonly accepted as they are in the United States and Britain. They are almost universally accepted by gas stations, and for travel by plane, train, and even taxi not all taxis. The smaller the business, the less likely it is to accept credit cards. These days, traveler's checks are less necessary because the Benelux countries have plenty of hour ATMs.
However, you will be charged an ATM withdrawal fee if the bank is not your own, so if you're going to withdraw money every day, you might be better off with traveler's checks, which will be replaced if lost or stolen. Euro traveler's checks are accepted at locations where dollar and pound traveler's checks may not be, but you'll have to convert any unused ones or keep them for a future trip to a luxemboueg country.
You can buy traveler's checks at most banks. The most popular traveler's checks are offered by American Express tel. American ExpressThomas UlxembourgVisaand MasterCard offer foreign currency traveler's checkswhich are useful if you're traveling to one country, or to the euro zone; they're accepted at locations where dollar checks may not be.
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Feb 24, · The Currency of Luxembourg is the Euro Luxembourg has the euro as its official and national currency just like the other countries within the eurozone that use the common European money. One euro is subdivided into cents. The euro is denoted with the symbol € . The euro is the official currency of Luxembourg, which is a member of the European Union. The Euro Area refers to a currency union among the European Union member states that have adopted the euro as their sole official currency. In Luxembourg, interest rate decisions are taken by the Governing Council of the European Central Bank. The conquest of most of western Europe by Revolutionary and Napoleonic France led to the French franc's wide circulation, including in Luxembourg. However, incorporation into the Netherlands in resulted in the Dutch gulden becoming Luxembourg's currency.
Estonia is due to join the eurozone on 1 January The currency is also used in a further five European countries, with and without formal agreements, and is consequently used daily by some million Europeans. Over million people worldwide use currencies which are pegged to the euro, including more than million people in Africa. The euro is the second largest reserve currency a status it inherited from the German mark as well as the second most traded currency in the world after the U.
Based on IMF estimates of GDP and purchasing power parity among the various currencies, the eurozone is the second largest economy in the world. The name euro was officially adopted on 16 December The euro was introduced to world financial markets as an accounting currency on 1 January , replacing the former European Currency Unit ECU at a ratio of Euro coins and banknotes entered circulation on 1 January Administration 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 Maastricht Treaty obliges most EU Member States to adopt the euro upon meeting certain monetary and budgetary requirements, although not all states have done so. The United Kingdom and Denmark negotiated exemptions,while Sweden turned down the euro in a 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 have pledged to adopt the euro in due course. In Community legislative acts the plural forms of euro and cent are spelled without the s, notwithstanding normal English usage.
Otherwise, normal English plurals are recommended and used;with many local variations such as for example 'centime' in France. All circulating coins have a common side showing the denomination or value, and a map in the background.
For the denominations except the 1-, 2- and 5-cent coins that map only showed the 15 Member States which were members when the euro was introduced.
Beginning in or depending on the country the old map is being replaced by a map of Europe also showing countries outside the Union like Norway.
The 1-, 2- and 5-cent coins, however, keep their old design, showing a geographical map of Europe with the 15 Member States of 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 which has adopted the euro. In order to avoid the use of the two smallest coins, some cash transactions are rounded to the nearest five cents in the Netherlands by voluntary agreement and in Finland by law.
This practice is discouraged by the Commission, as is the habit of certain shops to refuse to accept high value euro notes. These coins are legal tender throughout the eurozone. Collector's 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. The design for the euro banknotes have common designs on both sides.
The design was created by the Austrian designer Robert Kalina. 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. 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.
Capital within the EU may be transferred in any amount from one country to another. All intra-EU transfers in euro are considered as domestic payments and bear the corresponding domestic transfer costs. This includes all Member States of the EU, even those outside the eurozone providing the transactions are carried out in euro. The official story of the design history of the euro sign is disputed by Arthur Eisenmenger, a former chief graphic designer for the EEC, who claims to have created it as a generic symbol of Europe.
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. Placement of the currency sign relative to the numeric amount varies from nation to nation, but for texts in English the symbol and the ISO-standard "EUR" should precede the amount.
The euro was established by the provisions in the Maastricht Treaty. In order to participate in the currency, Member States are meant to meet strict criteria such as a budget deficit of less than three per cent of their GDP, a debt ratio of less than sixty per cent of GDP, 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 would result in the introduction of the euro. The name euro was devised on 4 August by Germain Pirlot, a Belgian Esperantist and ex-teacher of French and history,and officially adopted in Madrid on 16 December 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 in euro of these subdivisions which represent the exchange rates at which the currency entered the euro are shown at right.
The rates were determined by the Council of the European Union,based on a recommendation from the European Commission based on the market rates on 31 December 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 irrevocable conversion rate between the 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. The currency was introduced in non-physical form traveller's cheques, electronic transfers, banking, etc.
Their exchange rates were locked at fixed rates against each other, effectively making them mere non-decimal subdivisions of the euro. 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 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 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 , 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 forever the latter in Austria, Germany, Ireland and Spain.
The earliest coins to become non-convertible were the Portuguese escudos, which ceased to have monetary value after 31 December , although banknotes remain exchangeable until These countries comprise the "eurozone", some million people in total. Estonia will join in 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 further. Together this direct usage of the euro outside the EU affects over 3 million people.
It is also gaining increasing international usage as a trading currency, in Cuba,North Korea and Syria. There are also various currencies pegged to the euro see below.
In Zimbabwe abandoned its local currency and used major currencies instead, including the euro and the United States dollar. Use as reserve currency Since its introduction, the euro has been the second most widely held international reserve currency after the U. The share of the euro as a reserve currency has increased from The euro inherited and built on the status of the second most important reserve currency from the German mark.
The euro remains underweight as a reserve currency in advanced economies while overweight in emerging and developing economies: according to the IMF the total of euros held as a reserve in the world at the end of was equal to USD 1.
The possibility of the euro becoming the first international reserve currency is now widely debated among economists. Former Federal Reserve Chairman Alan Greenspan gave his opinion in September that it is "absolutely conceivable that the euro will replace the dollar as reserve currency, or will be traded as an equally important reserve currency. Currencies pegged to the euro Outside the eurozone, a total of 23 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 and Moroccan dirham , two African island countries Comorian franc and Cape Verdean escudo , three French Pacific territories CFP franc and another Balkan country, Bosnia and Herzegovina Bosnia and Herzegovina convertible mark.
On 28 July , Sao Tome and Principe signed an agreement with Portugal which will eventually tie its currency to the euro. With the exception of Bosnia which pegged its currency against the German 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 have a peg to the euro, in most instances as a precondition to joining the eurozone. In total, over million people in Africa use a currency pegged to the euro, 25 million people outside the eurozone in Europe and another , people on Pacific islands.
There are two models, both proposed by Robert A. Mundell: the stationary expectations model and the international risk sharing model. Mundell himself advocates the international risk sharing model and thus concludes in favor of the euro. However, even before the creation of the single currency, there were concerns over diverging economies.
Yet the chances of a state leaving the euro, or the chances that the whole zone would collapse, are extremely slim. Transaction costs and risks 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. The absence of distinct currencies also removes exchange rate risks.
The risk of unanticipated exchange rate movement has always added an additional risk or uncertainty for companies or individuals that invest or trade outside their own currency zones. Companies that hedge against this risk will no longer need to shoulder this additional cost.
This is particularly important for countries whose currencies had traditionally fluctuated a great deal, particularly the Mediterranean nations. 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.
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. 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 markets. Macroeconomic stability Low levels of inflation are the hallmark of stable and modern economies. Because a high level of inflation acts as a tax seigniorage and theoretically discourages investment, it is generally viewed as undesirable. In spite of the downside, many countries have been unable or unwilling to deal with serious inflationary pressures. Some countries have successfully contained them by establishing largely independent central banks.
One such bank was the Bundesbank in Germany; as the European Central Bank is modeled on the Bundesbank,it is independent of the pressures of national governments and has a mandate to keep inflationary pressures low.
Member countries that join the bank commit to lower inflation, hoping to enjoy the macroeconomic stability associated with low levels of expected inflation.