20 years of the euro in your pocket
Twenty years ago, on 1 January 2002, twelve EU countries changed their national currency banknotes and coins for the euro in the largest currency changeover in history. In 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 across Europe and beyond. With the euro in your pocket, saving, investing, travelling and doing business became much easier.
The euro is a symbol of EU integration and identity. Today, more than 340 million people use it across 19 EU countries, with 27.6 billion euro banknotes in circulation for a value of about €1.5 trillion. The euro is currently the second most widely used currency in the world behind the US dollar.
As it celebrates this 20th anniversary, the EU continues the work to strengthen the international role of the euro and adapt it to new challenges, including the rapid digitalisation of the economy and the development of virtual currencies. As a complement to cash, a digital euro would support a well-integrated payments sector and would offer greater choice to consumers and businesses.
Ursula von der Leyen, President of the European Commission, said: “It is now twenty years that we, European people, can carry Europe in our pockets. The euro is not just one of the most powerful currencies in the world. It is, first and foremost, a symbol of European unity. Euro banknotes have bridges on one side and a door on the other – because this is what the euro stands for. The euro is also the currency of the future, and in the coming years it will become a digital currency too. 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 that.”
David Sassoli, President of the European Parliament, said: “The 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 coming to fruition of a historic political vision, an ancient vision of a united continent with a single currency for a single market.”
Charles Michel, President of the European Council, said: “The euro has come a long way — it’s a true European achievement. I would even say the euro has become part of who we are. And how we see ourselves as Europeans. Part of our mind-set. And part of our European spirit. The euro belongs to all of us all European citizens. But it isn’t just a success within our EU borders. It has also anchored itself on the international stage. Despite the crises, the euro has proven to be resilient — a symbol of European unity and stability. And never has that been truer than during COVID-19. The euro has served as a bedrock of stability. A stable asset for the Union. The euro also fuels our recovery. Unlocking the full potential of sustainable development, quality jobs, and innovation.”
Christine Lagarde, President of the European Central Bank, said: “The euros we hold in our hands have become a beacon of stability and solidity around the world. Hundreds of millions of Europeans trust it and transact with it every day. It is the second most international currency in the world. As European Central Bank President, I commit we will continue to work hard to make sure that we maintain price stability. And I also pledge that we will renew the face of those banknotes and that we will give them the digital dimension as well.”
Paschal Donohoe, President of the Eurogroup, said: “The euro has proven its mettle in dealing with great economic challenges. In particular, our response to the COVID 19 pandemic demonstrated that by sharing the euro we can achieve more collectively than we can individually. The euro has strengthened its foundations over the last 20 years. Now, we need to build on those foundations to make the euro the global currency for transitioning to a lower carbon future.”
A long journey
The euro has come a long way from the early discussions on an Economic and Monetary Union in the late 1960s. Specific steps towards a single currency were first approached in 1988 by the Delors Committee. In 1992, the Maastricht Treaty marked a decisive moment in the move towards the euro, as political leaders signed on the criteria that Member States had to meet to adopt the single currency. Two years later, the European Monetary Institute (EMI) started its preparatory work in Frankfurt for the European Central Bank (ECB) to assume its responsibility for monetary policy in the euro area. As a result, on 1 June 1998, the ECB became operational.
In 1999, the euro was launched in 11 Member States as an accounting currency on financial markets and used for electronic payments. It was finally on 1 January 2002 when Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain swapped their national notes 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). Currently, Croatia is taking the preparatory steps to join the euro area, which it plans to do on 1 January 2023, provided it fulfils all the convergence criteria.
Twenty years of benefits for citizens and businesses
The euro has brought many benefits to Europe, especially to its citizens and businesses. The single currency has helped to keep prices stable and protected the euro area economies from exchange rate volatility. This has made it easier for European home buyers, businesses and governments to borrow money and has encouraged trade within Europe and beyond. The euro has also eliminated the need for currency exchange and has lowered the costs of transferring money, making travelling and moving to another country to work, study or retire simpler.
A large majority of Europeans support the single currency. According to the latest Eurobarometer, 78% of citizens across the euro area believe 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 has made it an international invoicing currency, a store of value and a reserve currency, accounting for 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 to it. Today, the euro is used for almost 40% of global cross-border payments and for more than half the EU’s exports.
Since the global financial crisis of 2008 and the subsequent sovereign debt crisis, the EU has continued to strengthen and deepen the Economic and Monetary Union. The EU’s unprecedented recovery plan NextGenerationEU will further improve the euro-area’s economic resilience and enhance economic convergence. The issuance of high-quality-denominated bonds under NextGenerationEU will add significant depth and liquidity to the EU’s capital markets and make them and the euro more attractive for investors. The euro is also now the leading currency for green investment: half of the world’s green bonds are denominated in euros, and this figure is rising thanks to the new green bonds issued to finance NextGenerationEU.
To further develop the international role of the euro, the Commission has launched outreach 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 for its wider use. This outreach will take the form of dialogues, workshops and surveys with the public and private sector, financial regulatory agencies, and institutional investors in regional and global partner countries of the EU.
TIME: Will China create a better world?
China is everywhere in global politics. China is “ubiquitous,” a retired Senior Colonel Zhou Bo of China’s PLA told in a conversation with TIME magazine. On March 10, in an agreement brokered by Beijing, Iran and Saudi Arabia agreed to normalize relations, after seven years of bitter rivalry in a deal that sidelined the U.S. Earlier, on February 24, China put forward a 12-point proposal for peace in Ukraine. On March 20, President Xi Jinping arrived in Moscow, where he discussed the situation in Ukraine with Vladimir Putin.
Senior Colonel Zhou Bo spoke about what the “watershed moment” means for China and the world. He said:
– For Beijing, the war in Ukraine is a trigger for new security arrangements in Europe that will have to be made before peace returns. China’s proposal on peace in Ukraine is a big step forward. The success on mediation between Iran and Saudi Arabia will encourage China to make more proposals, but the challenge is always to find road maps. With reform and opening up, as Deng Xiaoping said, China was trying to get across the river by feeling the stones on the riverbed, but now China is entering the ocean.
– We are talking about Global China. When Boris Johnson talked about Global Britain, it was probably more rhetorical. But Global China is definitely real. China is ubiquitous. China’s influence is everywhere. The PLA’s operations overseas are carefully chosen to be humanitarian in nature, but as your strength grows, people have higher expectations for you. We are talking about the world. This is the ocean we are wading in.
– China does have some sympathy with Russia on how this war came about because of NATO expansion, despite NATO’s promises on no expansion from time to time. China understands why Russia is resentful. When China stresses sovereignty must be respected, it also tries to look at it from a more comprehensive perspective. Countries like South Africa, Brazil, or India are taking similar positions like China on this.
– There is no doubt that China wants to see a ceasefire because China’s interests were damaged in Europe. Because of China’s neutrality, China’s relations with Western capitals have soured. This is ludicrous because China has nothing to do with this war.
– It does not make any sense that China, which has not provided weapons to Russia since the outbreak of the war, would change its mind, especially at a time when they have actually announced a peace plan. Why would Antony Blinken say that? By saying it, Blinken was actually giving a pre-emptive warning because China providing military support would be the worst fear of the U.S. But it’s totally impossible.
– The American presence in the region is not as strong as before, but the U.S. will not go away. But on this issue China is doing what the U.S. cannot do. Why? Because the U.S. doesn’t even have diplomatic relations with Iran. It cannot become a mediator between the two sides. The U.S. has allies in the region. It has to adopt double standards. Therefore, China can do a better job, but this is not an attempt to replace the U.S.
– If there were a war between Saudi and Iran, this would damage China’s interests, both economic interests and energy security, profoundly. So China needs to prevent a war and that may explain its new role.
– China depends on energy imports from the Middle East, which make up 40-50% of Chinese energy imports. We are trying to diversify, but that is the situation for now… At the same time, China’s activity in the Middle East now comprises almost everything, from building infrastructure to launching satellites to energy imports, therefore its stake on peace and stability in the Middle East has become higher.
– This is the first time China becomes directly involved in regional security. The biggest question of the 21st century is, if China’s rise is inevitable, will China create a better world? My answer is, at least it can make a safer world. At least it will make much less harm than the U.S.
War in Ukraine: Congress adopts a declaration of condemnation
The Congress of Local and Regional Authorities of the Council of Europe unanimously adopted on 21 March 2023 a Declaration to mark the one-year anniversary of Russia’s war against Ukraine, presented by the Congress President and Rapporteur on The Russian Federation’s war against Ukraine, Leendert Verbeek (Netherlands, SOC/G/PD).
President Verbeek said that the Congress declaration is a clear message of condemnation of this brutal war and a strong reaffirmation of the Congress’ unwavering solidarity with Ukraine, its people and communities : “we must continue to show our Ukrainian friends, colleagues and peers – the elected leaders that are engaged in a battle for their lives, their citizens, their towns and their futures – that they are NOT forgotten and that we will do everything in our power now, and in the future, to support them.” President Verbeek also stressed that the declaration reiterated the Congress’ resolute support for Ukraine’s sovereignty, political independence and territorial integrity within its internationally recognised borders.
The debate was preceded by a video message from the Ukrainian Commissioner for Human Rights, Dmytro Lubinets. “The solidarity of our partners strengthens the stability of our resistance to the aggressor and our strong confidence in victory”, he underlined while speaking about the difficult humanitarian situation in Ukraine. He also stressed the importance of mechanisms for the protection of citizens’ rights on the local level for everybody. He described how his office was implementing this approach by opening representative offices of the Commissioner in each region.
In his speech, the Congress President praised the “extraordinary courage and resilience of the Ukrainians and their leadership as they relentlessly defend their country at the frontline and the home front. “The Congress commends the solidarity and unity of Europeans, their cities and regions. We call on all to continue to mobilise and provide large-scale financial, security and humanitarian assistance to their Ukrainian counterparts”, he highlighted.
During the debate, Congress members supported the creation of a special international tribunal for the crime of aggression against Ukraine and the setting up of an international compensation mechanism for the injury, damage and loss incurred by the State of Ukraine as well as natural and legal persons in Ukraine. “It is imperative to hold Russia accountable for all crimes and justice must be done for all the victims.”, stressed President Verbeek.
“The Congress stands by the Ukrainian people at this historically decisive time for Ukraine and the world and believes in a common, democratic future based on respect for international law and a just peace.”, he concluded.
The strategic situation in the Persian Gulf region has dramatically changed
The China-brokered Saudi-Iranian normalisation of diplomatic relations. What has happened is an epochal event, writes M.K. Bhadrakumar, Indian Ambassador and prominent international observer.
Henry Kissinger drew the analogy of his own accomplishment in an extraordinary diplomatic career when, as Secretary of State in the Richard Nixon administration, he helped achieve rapprochement with Beijing amidst its tensions with Moscow.
One aspect of the Saudi-Iranian deal that has implications for India’s immediate external environment is that the strategic situation in the Persian Gulf region, India’s extended neighbourhood, has dramatically changed.
This can only be seen as the culmination of a series of repositioning on the part of the regional states that have been underway in the regional politics, as they increasingly took to diversifying their foreign policies away from the preponderant dependency on the West historically, and steadily and unmistakably began asserting their strategic autonomy with a newfound self-assuredness — be it Saudi Arabia, the UAE, Egypt or Turkey.
Today, Israel stares at strategic isolation in its region and America, its mentor-cum-benefactor-cum-guardian-cum-protector, stands diminished.
Kissinger noted that ‘China has in recent years declared that it needs to be a participant in the creation of the world order. It has now made a significant move in that direction.’
Of course, Chinese President Xi Jinping himself stated last week that Beijing should ‘actively participate in the reform and construction of the global governance system’ and promote ‘global security initiatives’.
India cannot but be wary that the Biden administration’s main thrust is military deterrence fuelling an Asian arms race, with which India can identify only at the risk of grave consequences.
NATO’s defeat in Ukraine will seriously damage the transatlantic system and the US’ hopes that casting China as enemy might rally Europe are unrealistic. Besides, the China-Russia quasi-alliance will resist. Should India get sucked into the maelstrom?
The US strategies seriously impact peace and stability in the Indo-Pacific, as they are anchored on bloc politics and confrontation, and their self-serving geopolitical agenda is to create a NATO-replica in the Asian continent.
The Anglo-Saxon clique known as AUKUS — comprising the US, Britain and Australia—opens a Pandora’s box as other countries will likely follow suit, which will seriously impact the international nuclear non-proliferation regime and even lead to its collapse. Will that serve Indian interests?
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