• Euro notes and coins are protected by law.euro coins on top of euro banknotes image by Stefan Ataman from Fotolia.com
  
  The Euro -- the official currency of the European Union -- came into existence in electronic form in 1999, and became legal tender in 12 countries on January 1, 2002, while other national currencies were phased out. As of October 2010, a total of 16 countries use the Euro, although several others, including the United Kingdom, remain outside the Eurozone. Like most currencies, the Euro enjoys legal protection from both the European Union and its member states.
  
  

Protection Against Counterfeiting

• Safeguarding the Euro was an important part of establishing the currency on the world stage, says the European Anti-Fraud Office. The European Council adopted two resolutions in 2001 that aimed to protect the new currency against counterfeiting: Regulation 1338/2001 and 1339/2001. These resolutions provided guidelines and procedures for identifying counterfeit notes and coins, removing them from circulation, and applied to the member states of the E.U., the European Commission and the European Central Bank. The resolutions also obliged member states to withdraw suspect notes and coins from circulation. They compelled the different responsible authorities, whether at E.U. level or in the different member states, to work together against counterfeiting.
  
  

Protection By Criminal Sanctions

• The European Council also passed a Framework Decision in 2000 setting out criminal penalties and other sanctions intended to deter counterfeiting. According to the European Anti-Fraud Office, the Council does not have the power to punish counterfeiters directly, but the Decision compels E.U. member states to punish the export and transport of counterfeit currency and its possession, in addition to the act of counterfeiting itself. The Decision urges that sanctions must be proportionate, but allows for both custodial sentences and deportation.
  
  

Protection in E.U. Member States

• In addition, the Euro is protected by existing legislation in E.U. member states, including states such as the United Kingdom where the Euro is not the national currency. The precise nature of what constitutes an offence varies between countries, but the act of producing false currency and putting it into circulation is an offence in all member states, as is the possession or transportation of counterfeit currency. The sanctions imposed by the different member states also vary and include fines and imprisonment. In Sweden, for example, the maximum penalty is eight years in prison, while in Ireland the highest sanction is penal servitude for life.