This paper examines the impact of the accession of new members to the Economic and Monetary Union (EMU) on foreign direct investment (FDI). An extant body of literature has studied the EMU on trade with mixed results. However, the analysis of the effect of the EMU effect on FDI, and specifically on new EU members is scant. The paper sheds light on the effect of currency unions in transition economies. The paper uses a dataset of bilateral Greenfield foreign investment flows on 190 territories over the years 2003-2016. During this period, several European countries joined the Eurozone: Slovenia (2007), Cyprus (2008), Malta (2008), Slovakia (2009), Estonia (2011), Latvia (2014) and Lithuania (2015). The empirical analysis uses the latest developments in the econometric analysis of the gravity equation, which corrects simultaneously for known biases. Structural gravity is founded on a solid theoretical ground and controls for unobserved bilateral heterogeneity, endogeneity, multilateral resistance terms, the existence of zeros in the dependent variable, heteroscedastic residuals, and a common stochastic trend. Our analysis shows that previous statistical methods underestimated the euro effect, delivering non-significant results. Our estimates suggest that the euro had a positive and significant effect on the bilateral FDI flows in these countries. We examine the “euro effect” both at the extensive margin (number of new FDI projects) and intensive margin (volume of FDI flows). The results show that the adoption of the euro has an effect on both margins of FDI, creating new investment partners with higher volume of foreign capital. Finally, the paper offers several policy implications, which focus on the joint currency and investment attraction strategies of transition East European economies.