In this section of the Real Economy ’, we ask: What has the single currency meant for European economies and businesses for two decades?
Euro banknotes and coins were first introduced on January 1, 2002 in ’, replacing national currencies in 12 European countries.
The euro existed three years ago, although only in electronic form. Twenty years later, 19 countries and more than 340 million Europeans use euro.
The aim of the euro was to make life easier by using the same currency for business and trade across the eurozone and for travel and living abroad. The euro's strong international role also aims to protect the EU economy and financial system from currency shocks, reduce dependence on other currencies and provide lower costs for EU businesses.
The Euro is currently the second most important currency in the world after the US dollar, and 60 countries and territories outside the EU also use Euro’ or link their currencies to Euro’.
Over the next few years, Croatia, Romania and Bulgaria are set to use the euro. Looking to the future, the idea of the digital euro is being discussed.
The Irish experience
Ireland was one of the first 12 countries to adopt the euro in 2002 and was replaced by the Irish pound, euro coins and banknotes.
The country's growth rate has since become one of the strongest in Europe’. University College Dublin’den economist Oana Peia says that the single currency plays an important role in this success story.
Peia, the adoption of “Euro’, IrelandIt has been important in consolidating ’'s place in the single market, currently %It attracted a large number of foreign direct investments, which make up the 20’, and is currently exporting to Ireland. Intra-EU trade, which makes up ’, has increased, says ”.
Peia explains that the Irish example is also a cautionary story about eurozone membership, as access to cheaper credit and a poorly regulated market eventually led to the 2008 financial crisis.
The exit from this crisis has been painful, “ says. “Since then IrelandThe recovery of ’ is equally impressive; economy 2012’den average until just before the pandemic %It grew at a rate of 5.”
A built-in trading environment
Ireland's economy, Ireland's exports It has grown in technological sectors such as pharmaceuticals and medical products that make up ’ini.
Founded 20 years ago near Galway, Aerogen is a leader in the distribution of high-performance aerosol drugs. For CEO John Power, the move to Euro’ has been a positive benefit.
“Our currency is pounds, EuropeIt would be a small currency in ’, and obviously the variability and exchange rate would have a big impact on Irish businesses, ” says. So the Euro took care of all of this, “.
Today, the company employs 400 people and its products used in intensive care units are exported to more than 75’ countries.
Power, “Our domestic market is quite small, ” explains. Therefore, the European market is as attractive to us as it is to the United States. About five years ago our business ’u euro and %It was trading in $70’i, now in the last two years this rate has risen to 50-50’.
Brexit’e adapt
Aerogen, whose markets are international, was not affected in the same way by the effects of Brexit’.
For other sectors, such as agriculture, which depended heavily on the UK market, the story was different. Peia says she is optimistic that Irish businesses will need to adapt to the new situation.
Although “ has caused a major disruption to the Irish economy, ’ says. “This has created a lot of opportunities and I think there is still a lot of room to increase trade with the European Union.”
According to Eurobarometer’, Ireland has the second highest level of confidence in Europe’; This is a sign that the Irish continue to believe in the Union and its single currency.
Tests for durability
Eurogroup President and Irish Finance Minister Paschal Donohoe believes the euro has proven its resilience when tested first by the financial crisis and then by the economic consequences of the pandemic. The Eurogroup is the forum where the finance ministers of the eurozone countries meet.
“You can't always claim that we did everything right immediately when responding to them, ” admits, but these are tests that show that the euro has passed, and now if you look at the speed at which the eurozone is recovering from the COVID 19 crisis, the pace of recovery is about four times faster than the global financial crisis.“
He adds that Euro’ has eliminated a layer of complications for both consumers and governments.
Donohoe, “, says ”, perhaps I think the most tangible are the daily practical benefits. “Disturbance, even difficulties during currency exchange. And it's easy to forget that now, but for a significant part of the history of the pre-euro part of the European Union, serious volatility in the exchange rate was a test faced by previous governments and previous businesses.’
What's going to happen now?
The next step could be the digital euro.
Donohoe, “, says the European Central Bank is currently moving forward with what I would describe as exploratory design work. “ My prediction is that if you and I were sitting here again in 20 years, we'd probably be thinking about the digital euro at that point.
Donohoe says the goal should now be to ensure that the euro's economic benefits have a positive social impact.
One thing that is challenging for the “ Eurozone, and therefore really important for the Euro, is how we can achieve a recovery that benefits young people, for example, that does more to ensure that this is an inclusive and fairer recovery as women return to the workforce and new working models begin to settle.”
The head of the Eurogroup sets out his vision for the future of the euro.
I want the “Euro’ to be a long-term signal and symbol of a European ’ that is important, resilient, always better than its recent past, and always drawing a better future.”
