Commission approves 2022-2027 regional aid map for Greece
Twenty years ago, on January 1, 2002, twelve EU countries changed their national currency notes and coins to the euro in the biggest currency change in history. During these two decades, the euro has contributed to the stability, competitiveness and prosperity of European economies. Most importantly, it has improved the lives of citizens and made it easier to do business in Europe and beyond. With the euro in your pocket, saving, investing, traveling and doing business just got a whole lot easier.
The euro is a symbol of the integration and identity of the EU. Today, more than 340 million people use it in 19 EU countries, with 27.6 billion euro banknotes in circulation worth around 1.5 trillion euros. The euro is currently the second most used currency in the world behind the US dollar.
As he celebrates this 20e anniversary, the EU is continuing work to strengthen the international role of the euro and adapt it to new challenges, including the rapid digitization of the economy and the development of virtual currencies. Along with cash, a digital euro would support a well-integrated payments industry and provide greater choice for consumers and businesses.
Ursula von der Leyen, President of the European Commission, said: âIt has been twenty years now that we, European citizens, have been able to carry Europe in our pockets. The euro is not only one of the most powerful currencies in the world. It is above all a symbol of European unity. Euro banknotes have bridges on one side and a gate on the other, because that is what the euro stands for. The euro is also the currency of the future, and in the years to come it will also become a digital currency. The euro also reflects our values. The world we want to live in. It is the global currency for sustainable investments. We can all be proud of it. “
David Sassoli, President of the European Parliament, said: âThe euro is the embodiment of an ambitious political project to promote peace and integration within the European Union. But the euro is also a condition for protecting and relaunching the European economic, social and political model in the face of the transformations of our time. The euro is a symbol, the realization of a historical political vision, an old vision of a united continent with a single currency for a single market.
Charles Michel, President of the European Council, said: âThe euro has come a long way, it is a real European success. I would even say that the euro is now part of who we are. And how we see ourselves as Europeans. Part of our state of mind. And part of our European spirit. The euro belongs to all of us, European citizens. But it is not only a success within our European borders. It has also established itself on the international scene. Despite the crises, the euro has proven to be resilient, a symbol of European unity and stability. And that has never been truer than during COVID-19. The euro has served as a basis for stability. A stable asset for the Union. The euro is also fueling our recovery. Unlock the full potential of sustainable development, quality jobs and innovation.
Christine Lagarde, President of the European Central Bank, said: âThe euros we have in our hands have become a beacon of stability and solidity in the world. Hundreds of millions of Europeans trust him and do business with him every day. It is the second most international currency in the world. As President of the European Central Bank, I pledge to continue to work hard to ensure price stability. And I am also committed to renewing the face of these banknotes and also giving them a digital dimension. “
Paschal Donohoe, President of the Eurogroup, said: âThe euro has proven itself in the face of major economic challenges. In particular, our response to the COVID 19 pandemic has demonstrated that by sharing the euro we can achieve more collectively than we can individually. The euro has strengthened its foundations over the past 20 years. Now we must build on these foundations to make the euro the global currency for the transition to a lower carbon future. “
A long trip
The euro has come a long way since the first discussions on Economic and Monetary Union in the late 1960s. Specific steps towards a single currency were first discussed in 1988 by the Delors Committee. In 1992, the Maastricht Treaty marked a decisive moment in the transition to the euro, as political leaders signed off on the criteria that member states had to meet to adopt the single currency. Two years later, the European Monetary Institute (EMI) began in Frankfurt its preparatory work for the European Central Bank (ECB) to assume its responsibility for monetary policy in the euro area. As a result, on June 1, 1998, the ECB became operational.
In 1999, the euro was launched in 11 Member States as an accounting currency in financial markets and used for electronic payments. It was finally on January 1, 2002 that Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain exchanged their national banknotes and coins for euros. Slovenia joined the euro area in 2007, followed by Cyprus and Malta (2008), Slovakia (2009), Estonia (2011), Latvia (2014) and Lithuania (2015). Croatia is currently taking the preparatory steps to join the euro area, which it plans to do on January 1, 2023, provided it meets all the convergence criteria.
Twenty years of benefits for citizens and businesses
The euro has brought many benefits to Europe, in particular to its citizens and businesses. The single currency has helped keep prices stable and protect euro area economies from exchange rate volatility. This made it easier for home buyers, businesses and governments to borrow money and encouraged trade in Europe and beyond. The euro has also eliminated the need for currency swaps and reduced the costs of transferring money, making it easier to travel and travel to another country to work, study, or retire.
A large majority of Europeans support the single currency. According to the latest Eurobarometer, 78% of citizens in the euro area think the euro is good for the EU.
A strengthened international role
The euro is the second most important currency in the international monetary system. Its stability and credibility have made it an international invoicing currency, a store of value and a reserve currency, representing around 20% of foreign exchange reserves. Sixty other countries and territories around the world, home to some 175 million people, have chosen to use the euro as their currency or to peg their own currency there. Today, the euro is used for almost 40% of global cross-border payments and for more than half of EU exports.
Since the global financial crisis of 2008 and the sovereign debt crisis that followed, the EU has continued to strengthen and deepen the Economic and Monetary Union. The EU’s unprecedented NextGenerationEU stimulus package will further improve the economic resilience of the euro area and strengthen economic convergence. The issuance of high quality denominated bonds under NextGenerationEU will add considerable depth and liquidity to EU capital markets and make them and the euro more attractive to investors. The euro is also now the leading green investment currency: half of the world’s green bonds are denominated in euros, and this figure is increasing thanks to new green bonds issued to finance NextGenerationEU.
In order to further develop the international role of the euro, the Commission has launched awareness-raising initiatives to promote euro-denominated investments, facilitate the use of the euro as an invoicing and denomination currency and foster a better understanding of the obstacles to its wider use. This awareness will take the form of dialogues, workshops and surveys with the public and private sectors, financial regulatory agencies and institutional investors in EU regional and global partner countries.