Many countries in Southern Europe have adopted the euro as their official currency, making travel, trade, and business much easier across the region. The euro is widely used in major economies like Spain, Italy, and France, as well as in smaller nations such as Malta and Cyprus. Additionally, several microstates, including Monaco, San Marino, Andorra, and Vatican City, also use the euro through special agreements with the European Union. This shared currency strengthens economic ties between these countries and simplifies financial transactions for both locals and visitors.Â
Many countries in Southern Europe use the euro: Which and the impact
Spain – A Leading Eurozone Economy
Spain adopted the euro (€) in 2002, replacing the peseta. As one of Europe’s largest economies, Spain benefits from a stable currency, strong tourism industry, and international trade. Cities like Madrid, Barcelona, and Seville attract millions of tourists each year, and using the euro makes transactions easier for visitors from other European countries.
The euro has also helped Spain’s businesses, as it removes exchange rate risks when trading with other Eurozone countries. However, Spain has faced economic challenges, including the financial crisis of 2008, but it continues to recover and grow.
Portugal – A Country Thriving with the Euro
Portugal also switched from the escudo to the euro in 2002. Since then, the country has improved its economy, boosted tourism, and attracted foreign investment. Cities like Lisbon and Porto have become popular among digital nomads, retirees, and tourists, partly because the euro makes banking and travel more convenient.
Using the euro has helped Portugal develop a stronger financial system. Though it experienced a debt crisis in the early 2010s, it recovered with economic reforms and EU support. Today, Portugal benefits from a stable economy and a growing real estate market.
France – A European Economic Powerhouse
France, one of Europe’s largest economies, adopted the euro in 2002, replacing the franc. Even though France is not entirely in Southern Europe, its Mediterranean region, including cities like Nice and Marseille, plays a big role in Southern European trade and tourism.
The euro has made France a stronger global competitor. Businesses benefit from easier exports, international investments, and financial stability. French Riviera cities, such as Cannes and Monaco, attract wealthy visitors who enjoy the convenience of using the same currency across multiple countries.
Italy – A Country of Culture and Commerce
Italy’s adoption of the euro in 2002 replaced the lira. The change helped improve trade with European partners, as businesses no longer had to deal with currency exchanges. Cities like Rome, Florence, and Venice benefit from using the euro because it simplifies travel for millions of tourists.
However, Italy has also faced economic difficulties. Some argue that having the euro limits its ability to control inflation and national debt. Despite this, Italy remains one of Europe’s strongest economies, especially in fashion, design, and food exports.
Greece – A Unique Eurozone Member
Greece adopted the euro in 2002, replacing the drachma. The country benefits from easier trade, tourism, and international investment. However, Greece faced a severe financial crisis in 2009, which led to bailouts from the EU.
Even with economic challenges, Greece’s economy relies heavily on tourism and shipping, and using the euro helps in both sectors. Cities like Athens, Thessaloniki, and the Greek islands attract millions of visitors who appreciate the convenience of using the euro.
Cyprus – A Divided Nation with a Unified Currency
The Republic of Cyprus adopted the euro in 2008, replacing the Cypriot pound. This change helped strengthen the country’s ties with the European Union and global markets. Cyprus is known for its tourism, banking, and real estate sectors, all of which benefit from the stability of the euro. Cities like Nicosia, Limassol, and Larnaca attract investors, entrepreneurs, and tourists who enjoy the ease of a strong and widely accepted currency.
Malta – A Small Island with a Strong Economy
Malta adopted the euro (€) in 2008, replacing the Maltese lira. Since then, the country has benefited from increased foreign investment, stronger trade partnerships, and a growing tourism industry. As a small island nation in the Mediterranean, Malta relies heavily on international business and tourism, both of which have become easier thanks to the shared currency.
Valletta, the capital, is a historic and financial hub, attracting expats, entrepreneurs, and digital nomads. The euro has also helped stabilize Malta’s economy, making it more attractive for companies in sectors like iGaming, finance, and shipping. Despite its small size, Malta has a strong economy that continues to grow, partly due to its integration with the Eurozone.
Countries in Southern Europe with Euro as Currency Through Agreements
Some microstates in Southern Europe use the euro even though they are not part of the Eurozone.
Monaco – This tiny city-state on the French Riviera uses the euro through an agreement with the EU. It benefits from having a strong currency since it attracts wealthy investors and tourists.
San Marino – This small republic inside Italy also uses the euro. It has a unique banking system and produces limited edition euro coins that are popular among collectors.
Vatican City – The world’s smallest country uses the euro because of an agreement with the EU. It even issues its own Vatican euro coins, which are highly valued by collectors.
Andorra – This small country in the Pyrenees Mountains also uses the euro, but it is not officially in the Eurozone. Andorra benefits from duty-free shopping and banking services, making it an attractive destination for visitors.
Conclusion
The countries in Southern Europe with euro as currency enjoy economic stability, easier trade, and smoother travel experiences. While some, like Spain and Italy, are full members of the Eurozone, others, like Monaco and Andorra, use the euro through agreements. Despite economic challenges, the euro remains a key part of Southern Europe’s financial and tourism success.