August 7, 2022

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Reflections on Twenty Years for the Euro, by Redacción

Reflections on Twenty Years for the Euro, by Redacción

Twenty years ago, about three hundred million Europeans had in their hands a new currency, the euro. From Lisbon to Helsinki via Athens, citizens were able to withdraw euro banknotes from their ATMs, make purchases with euro coins and travel abroad without exchanging currency.

The switch from twelve national currencies to the euro was a process unique in history: the European Central Bank (ECB) printed more than 15,000 million euros in banknotes and minted about 52,000 million coins before January 1, 2002.

Now is the time to strengthen the banking union and tap into the next generation’s money

Building on the expansion of the single market, the euro has become one of the most tangible achievements of European integration, along with the free movement of people, the Erasmus student exchange program or the abolition of roaming charges. Cell phones within the European Union.

On a deeper level, the euro reflects a common European identity and the strength of economic integration to ensure Europe’s stability and prosperity.

The Eurogroup Commemorating 20 Years of the Euro

Oliver HOSLET / EFE

As finance ministers and members of the European Commission responsible for the economic policy of the eurozone, we look back together over the past 20 years and set some priorities for the future of our common currency.

It is fair to say that the first two decades of the Euro were intense and eventful.

From the great enthusiasm of its beginnings, the euro has grown to become the second most used currency in the world. Our common currency is still widely accepted – about 80% of citizens consider the euro useful to the European Union – and the eurozone has continued to expand, from the first eleven members to the current nineteen, and those that are currently. To join in the next few years.

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These developments have occurred in the context of significant challenges. Some were already skeptical of the project from its inception.

As it enters its adolescence, member states and institutions are becoming more aware that the euro’s architecture was not originally designed to respond to the earthquake caused by the global financial crisis and the subsequent sovereign debt crisis. This led to the reform of the eurozone’s governance framework, the creation of a common assistance mechanism for countries in financial difficulty, a common system of supervision and the dissolution of European banks within the banking union: it was recognition that the solution lay in greater coordination and integration.

These early crises allowed the euro to mature and strengthen its international role. We have also learned lessons valuable to serve us well in the current pandemic: Its transnational nature has revealed how deeply we are interconnected and how strong our unity is.

In contrast to previous shocks, when the scale of the COVID crisis became apparent, they reacted with rapid, decisive and coordinated strategic actions. Existing social protection and tax systems mitigate the economic impacts, and EU governments and institutions, along with the European Central Bank, have taken unprecedented decisions to continue to protect lives and livelihoods. Besides accommodative monetary policy, the collective response included the Sure Financial Assistance Program, which has helped protect some 31 million jobs, as well as the European Union’s Next Generation, Europe’s leading recovery tool.

Our coordinated policy response, along with the distribution of coronavirus vaccines, has helped the eurozone recover quickly from the economic effects of the pandemic. In addition, fiscal support and liquidity measures have been demonstrated to remove the risk of long-term damage, so that our economies can quickly recover lost gains.

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We have achieved a lot in the first 20 years of using the euro, but there is still a lot to be done.

We must continue to innovate and strengthen the international role of the euro. The euro itself must adapt to the digital age. Therefore, we support and contribute to the ongoing work of the European Central Bank on a digital format for our currency.

At the same time, the eurozone needs further strengthening. While we have laid a solid foundation for our European banking system, we must continue to make progress to strengthen our banking union and open up new opportunities for economic recovery and growth. The same is true of our capital markets: we need to take decisive action to improve the flow of investments and savings across the single market in order to provide businesses, including our SMEs, with much-needed financing and, instead, create new jobs .

Investment levels have been too low for a long time: we have to invest massively and sustainably in our citizens, infrastructure, and institutions. Together with responsible budget policies and the contribution of the private sector, the Next Generation EU will be instrumental in bringing about many necessary reforms and investments. This is the best way for us to unleash our growth potential, improve our standard of living, and address the great challenges facing humanity.

We must also ensure fiscal sustainability given our aging population. In the context of reviewing our common fiscal rules, we must ensure that budgetary and economic policies in the euro area are adapted to the new environment and able to adapt to future challenges.

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Our common currency is an unprecedented team effort and a testament to the unity upon which our union is based.

As the world recovers from the pandemic, it is time to unite our efforts and resources to reap the benefits of a rapidly digitizing world and address the climate emergency. No country can address any of these issues alone. The euro is a testament to what we can achieve when we work together. Let’s take a look at the next 20 years and make it a symbol of our commitment to ensuring a prosperous, sustainable and inclusive future for generations to come.