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There were those who thought it would never happen, those who thought it would be a disaster and those who thought it would blow Europe asunder...
And, of course, there were those who hoped (or feared?) it would MAKE a European nation and pave the way to a UNITED STATES OF EUROPE.
What am I talking about?
Well, the introduction of a currency for Europe, the EURO.
Can you believe it? It's already been ten years since the single currency was launched into anxious financial markets amid fears of failure and forex massacre (notes and coins were only introduced two years later to replace respective national currencies). So, what's the verdict after the first decade? Thumbs up or thumbs down?
Well, for starters, we all know it DID happen. So it WAS possible. No questions about that.
And then ... the Euro did NOT get slaughtered in the markets. Not even on its first day. In fact, over the course of these first ten years, there have been far more collective laments about the strength of the Euro than about its weakness. Because for forex traders, day ONE of the Euro was very simple and very unsentimental: they simply replaced deutschmark with Euro and Bundesbank with European Central Bank and moved on. All they had to get used to was new exchange rates.
You see, the Euro and its brand new central bank, the ECB, might have been without a track record; but for the financial community they were simply the heirs of the German deutschmark and ITS central bank, the Bundesbank.
And, so far at least, the currency union has NOT fallen apart. And so far, all the prophets of doom have been proven wrong. So far.... But let's not be too optimistic here: multi-nation currency unions of the past have always fallen apart ... the latest in that line - the Scandinavian monetary union tying Norway, Sweden and Denmark together with one currency in 1875 - lasted for a respectable 39 years and only fell apart with the outbreak of WWI in 1914. So, it's early days for this young European currency.
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And yet, after only ten years it has racked up some impressive statistics:
For starters, everybody has long taken the existence of the euro for granted as well as the fact that it has long become world reserve currency number TWO and a serious contender for the dollar in the number one spot. Now the euro is the official currency for 16 countries. Another 11 countries use it with or without formal agreement. So it is the single currency for more than 320 million people. Ten more countries have pegged THEIR currencies to the euro, so that this single currency for Europe directly impacts more than half a billion people worldwide.
Economically, financially, the euro IS a success story. But politically? Has it brought Europe closer together? - Well, may be not. Constitution, taxes, defense.... Europe seems as divided as ever.
And yet.... when the financial crisis reached panic level last autumn, France's Nicolas Sarkozy called the members of the Eurogroup (ok, plus Britain, which is NOT inside the eurozone!) for a crisis meeting and only THEN the leaders of the European Union as a whole for a summit. And there can be little doubt that the euro AND its central bank are seen a buffer of stability against pressures OUTSIDE the eurozone. And many who were skeptical and cynical about this currency for Europe are now banging at the gates of the Euroclub to join.
And let's not forget one thing: We might be talking about economic instabilities, about the "one size fit all" that DOESN´T fit all .... about conceptual flaws. But that's economist talk ... that has nothing to do with visions and perceptions.
For us EUROZONIES, for us eurozone consumers, the single currency has changed a lot. We might not have welcomed it at the time (I certainly didn't!), but moving from Calais to Capri or from Lübeck to Lisbon without having to change currencies HAS brought us closer together ... in more ways than many of us might think. Traveling across continental Europe now often FEELS like staying in one country ... and that in itself has given us a new feeling of European-ness ...
Questions? Comments? Send an email!
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