“This represents a genuine European triumph—a dependable, robust, and energetic currency,” declared Charles Michel, President of the European Council, on January 1st, 2022.
Envisioned in the 1970s as an integration tool, aiming to simplify trade and rival the dollar, the euro entered everyday transactions on January 1st, 2002. This necessitated residents of the twelve founding member nations to relinquish their national currencies.
Germans traded their cherished deutschemark for a currency with a straightforward 2:1 exchange rate. Meanwhile, French and Italian citizens—some utilizing now-obsolete plastic card converters—adapted to more intricate conversions.
Familiar figures adorning franc, deutschemark, and peseta banknotes vanished. The shared currency’s seven notes feature Romanesque, Gothic, and modern architectural motifs, symbolizing European history’s various phases; a redesign is underway.
Since 2002, seven additional European nations—Cyprus, Estonia, Latvia, Lithuania, Slovenia, Slovakia, and Malta—have embraced the euro. Bulgaria, Croatia, and Romania, existing EU members, are anticipated to join in the years ahead.
This transition wasn’t universally embraced, with concerns about price increases prevalent. This apprehension stemmed from the persistent feeling within the 19-nation zone of reduced purchasing power, despite statistics indicating the euro stabilized inflation.
Some frequently purchased, inexpensive items experienced notable price hikes due to rounding up. However, more costly goods remained static or even decreased in price. inflation remained moderate.
The euro has ascended to become the second-most secure currency globally, trailing only the dollar. It currently accounts for 20% of global foreign exchange reserves (compared to the dollar’s 60%). Consequently, politicians such as Marine Le Pen and Matteo Salvini, who previously advocated for euro exit, have since abandoned that stance.
These two decades haven’t been devoid of challenges. Less than a decade after its debut, the euro faced a severe financial crisis, with Greece at its epicenter.
National banks retreated within their national boundaries. The European Central Bank (ECB) stumbled but ultimately recovered. In Greece, banks temporarily closed, withdrawals were restricted, and austerity measures were implemented. Even zoo animals in Greece experienced dietary restrictions.
Member states and institutions subsequently recognized that the euro’s structure wasn’t initially equipped to handle the seismic shock of the global financial crisis, as noted by numerous finance ministers and European Commission members in a recent statement.
However, these setbacks and early crises fostered the euro’s maturity and enhanced its global role, offering valuable insights proven useful during the recent pandemic.
