Why is the compensation paid out in Euros not Pounds?

Regulation (EC) 261/2004 regarding flight delays, cancellations & overbookings specifies the amount passengers are entitled to. In this document, the sums are mentioned in euros. Once the airline has agreed to pay you your compensation, the final sum shall be stated in Euros. However, should your compensation be transferred to your UK bank account, you shall receive your compensation in pounds. The final sum you receive will be converted according to the current exchange rate.