Reflections on the 20 years of the euro: common article of the members of the Eurogroup
Twenty years ago tomorrow, around 300 million Europeans had a brand new currency in their hands, the euro. From Lisbon to Helsinki to Athens, citizens were able to withdraw euro banknotes from their local vending machines, shop with euro coins and travel abroad without exchanging currencies.
The change from 12 national currencies to the euro was a unique operation in history: the European Central Bank printed more than 15 billion euro banknotes and some 52 billion coins were minted before January 1, 2002.
Building on the expansion of the single market, the euro has become one of the most tangible achievements of European integration, with the free movement of people, the Erasmus student exchange program or the abolition of roaming charges within the EU.
At a deeper level, the euro reflects a common European identity, symbolic of integration as a guarantor of stability and prosperity in Europe.
As finance ministers and members of the European Commission who direct the economic policy of the euro area, we take a collective look at the past 20 years and identify some priorities for the future of our common currency.
The last 20 years – coming of age
It is fair to say that the euro has had an eventful first decade.
Since the great enthusiasm of its beginnings, the euro has become the second most used currency in the world. Our common currency remains very popular – around 80% of citizens think the euro is good for the EU – and the euro area has continued to expand from the original 11 members to 19 countries today, and more on the road to membership in the coming years.
This progress has been made in the face of serious challenges. Some were skeptical of the project, which was already in its infancy.
When it reached its teens, member states and institutions became more aware that the architecture of the euro was not originally designed to respond to the seismic shock of the global financial crisis and the crisis. sovereign debt that followed. This led to the reform of the governance framework of the euro area, to the establishment of a common support mechanism for countries in financial difficulty and a common supervisory system for European banks: a recognition that the solution had to be found in greater coordination and further integration.
These first crises allowed the euro to mature and strengthen its international role. We also learned valuable lessons that have served us well in the current pandemic: its borderless nature has revealed both the depth of our interdependence and the strength of our unity.
When the scale of the COVID-19 crisis became evident, it was accompanied by much faster, more decisive and better coordinated political action, unlike previous shocks. While existing tax and social systems have helped cushion the economic impact, the EU has taken unprecedented decisions to further protect lives and livelihoods, complementing the ECB’s supportive monetary policies. Our collective response included the SURE financial aid program which has helped protect around 31 million jobs, as well as the revolutionary recovery plan for Europe – Next Generation EU.
Our coordinated political response, coupled with the deployment of COVID-19 vaccines, has helped the euro area quickly recover from the economic effects of the pandemic. In addition, the financial and liquidity support provided aimed to limit the risk of long-term damage so that our economies can quickly regain the lost ground.
The next 20 years
We have accomplished a lot in the first 20 years of the euro, but there is still a lot to do.
We must keep pace with innovation and promote the international role of the euro. The euro itself must be adapted to the digital age. This is why we support and contribute to the ongoing work of the European Central Bank on a digital form of our currency.
At the same time, the euro area needs to be further strengthened. Although we have established a solid foundation for our European banking system, we still have work to do to strengthen our banking union and open up new opportunities for economic recovery and growth. The same goes for our capital markets: we need to take decisive action to improve the way private investment and savings flow through the Single Market in order to provide much needed finance to businesses, including our SMEs, and thus create new employment opportunities.
Investment levels have been too low for too long: we need to invest heavily and sustainably in our employees, our infrastructure and our institutions. Together with responsible fiscal policies and the contribution of the private sector, Next Generation EU will play a key role in implementing many of the necessary reforms and investments. It is the best way we have to stimulate our growth potential, improve our standard of living and address the critical challenges facing humanity.
We also need to ensure fiscal sustainability as our population ages. In the context of the review of our common fiscal rules, we must ensure that the fiscal and economic policies of the euro area are fit for purpose in a changed environment and responsive to future challenges.
Our common currency is an unprecedented collective endeavor and a testament to the unity that underpins our Union.
As the world recovers from the pandemic, we must now combine our efforts and resources to reap the rewards of a rapidly digitalizing world and tackle the climate emergency. None of these problems can be solved by countries acting alone. The euro is proof of what we can achieve when we work together – looking forward to the next 20 years, let us make it a symbol of our commitment to securing a prosperous, sustainable and inclusive future for future generations.
This article was published in several European media. It was co-signed by Magnus Brunner, Minister of Finance of Austria, Nadia CalviÃ±o, First Vice-President and Minister of Economy and Digitization of Spain, Clyde Caruana, Minister of Finance and Employment of Malta, Valdis Dombrovskis, Executive Vice-President of the European Commission for an Economy that Works for People, Paschal Donohoe, President of the Eurogroup and Minister of Finance of Ireland, Daniele Franco, Minister of Economy and Finance of Italy, Paolo Gentiloni, European Commissioner for the Economy, Pierre Gramegna, Minister of Finance of Luxembourg, Wopke Hoekstra, Minister of Finance of the Netherlands, JoÃ£o LeÃ£o, Minister of State for Finance of Portugal, Bruno Le Maire, Minister of the Economy , Finance and Recovery of France, Christian Lindner, Minister of Finance of Germany, Mairead McGuinness, European Commissioner for Financial Services, Financial Stability and Capital Markets Union, Igor MatoviÄ, Minister of F inances and Deputy Prime Minister of Slovakia, Keit Pentus- Rosimmannus, Minister of Finance of Estonia, Constantinos Petrides, Minister of Finance of Cyprus, JÄnis Reirs, Minister of Finance of Latvia, Annika Saarikko, Minister of Finance of Finland, Andrej Å ircelj , Minister of Finance of Slovenia, GintarÄ SkaistÄ, Minister of Finance of Lithuania, Christos Staikouras, Minister of Finance of Greece, Vincent Van Peteghem, Minister of Finance of Belgium.