On new year’s day 2002 euro notes and coins hit the streets for the first time. They were introduced with much enthusiasm and optimism as a currency that people could actually spend in the shops.
Previously — from the start of 1999 — it had been used by the world’s financial markets as an accounting currency.
The idea was to lower borrowing costs and make trade and tourism easier, boosting growth and Europe’s clout in the world.
The currency is now used by more than 330 million people and — despite recent events — many maintain faith in its future such as Philipp Roeckner speaking in a German shopping centre who said: “I have a lot of trust in the euro. I am not worried in the least.”
But others do not see it as the promised stabiliser and shelter from global economic crises. Another shopper Ralf Schmidt said: “I have no trust in the euro whatsoever. Because, if you look at the economy, the promises have not been kept.”
The problem — ignored at the beginning and now all too apparent — was that the euro was not a one-size-fits-all currency.
The 17 different countries using it had different needs, particularly after the economic crisis hit, as Hans-Werner Sinn, President of the Ifo Institute, an economic research group, explained: “Unfortunately, things didn’t go as well with the euro as we had thought. The euro is in an existential crisis at the moment. Some countries have over-extended themselves, and their inflation, through using inexpensive credit before the crisis and before the euro. They are now left with wages and prices that are much too high, they’ve lost their competitiveness and have to finance huge foreign trade deficits.”
As the euro were launched — overseen by the Frankfurt-based European Central Bank — many economists were sceptical.
They were told that it would work because governments were required to cut their debt before being allowed to join and would have to make much needed fiscal and labour market reforms.
Ten years later, the crisis has revealed how little of that reform and debt cutting was actually done.