EU celebrates 10th anniversary

5th January 2009, Comments 0 comments

The Eurozone came into existence with the official launch of the euro on 1 January 1999.

The euro is celebrating its 10th birthday. In 1998 eleven EU member states had met the convergence criteria to join the single currency.

The Eurozone came into existence with the official launch of the euro on 1 January 1999.

The 31st of December 1998: the Finance ministers set the currency rates definitively. The Belgian franc was set at 40.3399 to 1 euro.  Jean-Luc Dehaene was Belgian PM and Jacques Santer was the president of the European Commission.

Leading up to New Year's Eve 1997 to 1 January 1998 banks and IT specialists were hard at work: the book-keeping and accounts were to be in euro from then on. The shares on the stock exchanges in the member countries were quoted in euros as well.

Greece qualified in 2000 and was admitted on 1 January 2001. Physical coins and banknotes were introduced on 1 January 2002. Slovenia was admitted on 1 January 2007.

Cyprus and Malta joined on 1 January 2008, and Slovakia on 1 January 2009.

Currently  there are 16 member states with over 325 million people in the Eurozone.

Great expectations

Expectations were grand but the euro had yet to prove itself.

Economics professor at Leuven University Paul De Grauwe recalls," There were a lot of sceptics, including me. A lot of people were quite negative about the euro. They said - it will never work - and if it does, it won't last... Well, look at the facts: 10 years later the euro is still here - and it's a success!"

The euro has provided for lower interest rates. For every single Belgian this has meant savings of €1345, according to VRT sources.

The euro has kept inflation low.  The average increase in prices the euro can be held responsible for is only 0.3%. Nevertheless, most Europeans think that the euro has made everything a lot more expensive.

Professor Paul De Grauwe has an explanation: "It probably has to do with the fact that when the euro banknotes were introduced, a lot of stores rounded their prices off upwards. The consequence was that there was a considerable price increase at that moment - and this is what people remember."

Through the economic crisis the euro has stood its ground admirably, while the British pound lost 16% of its value in three months, and the Swedish crown 14%.

Still, economic experts say that for the euro to remain firm in 2009 closer cooperation between the Eurozone countries will be essential.

Members of the Eurozone

Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia, Spain

The population in the Eurozone is 325,714,137


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