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From a political project to the second most important currency

The euro was introduced 25 years ago – initially as a book currency, later also as cash. For many it is seen as a symbol of shared ideals and stability. Criticism of the currency continues to this day.

Claudia Wehrle

It was not a foregone conclusion that there would one day be a common European currency. The reservations were too great. Critical voices kept coming, especially from Germany. The national currency at the time, the D-Mark, was considered a stable, hard currency. And give it all up? Many German citizens couldn’t or didn’t want to imagine that.

But the advantages of a common European currency were obvious: no more exchange of money, no currency conversions – not even when traveling to other European countries. Prices for goods and services became more comparable through a common currency. Above all, trade between the individual states of the economic and monetary community should become easier. That was a competitive advantage.

Helmut Kohl’s political project

The introduction of the euro was a political project, according to then-Chancellor Helmut Kohl. “The future of our country, especially at this time, can only be won with courage, loyalty to principles and foresight,” he said.

The realization of the economic and monetary union is the consistent further development of European unification.

Heated debates about common currency

The first plans to introduce a common European currency existed as early as the 1970s. In 1979 the European Monetary System was established. This was intended to prevent national currencies from fluctuating beyond a certain range. The “ECU” was created. It wasn’t cash, but at least it was a unit of account. It would still be years before a “real” European currency was introduced.

There were heated debates. A currency? In different states? With different economic power? And different political leadership styles? Numerous economists had warned against this and preferred to keep the Deutsche Mark – at least as far as Germany was concerned. As a guarantee of stability against high inflation rates. But the supporters of the community project ultimately had the upper hand.

Political discourse

The former Federal Foreign Minister Hans-Dietrich Genscher resisted speaking of “hasty” or “premature birth”. “It’s about creating trust, because this trust is justified,” he said in the Bundestag debate on April 23, 1998, when it came to the introduction of the euro as the new European common currency.

According to Joschka Fischer, then parliamentary group leader of the Green Party, it was about “that we understand that the integration of Germany, this large country located in the middle of Europe, into European interests, that our national interests are only ever defined by European interests.” . Monetary value stability is one thing, said Bundestag President Rita Süssmuth at the time. “Our political future, the future of our people, is what matters.”

challenges and meaning of the euro

The euro – a synonym for Europe, an opportunity for peaceful integration of many European states. On January 1, 1999, the euro was introduced, initially as a book currency, and three years later, on January 1, 2002, also as cash. Today, the European common currency has become an indispensable part of world trade, even if it is difficult to reconcile the different interests of the individual member states of the monetary union, even if there were repeated tests or even if there were moments when the monetary union threatened to fall apart.

For Chris-Oliver Schickentanz from Capitall AG, the introduction of the euro came too early. It came “before a uniform financial and economic policy, before a clear framework. And we never really corrected this birth defect.”

But despite all the challenges: What was a political project has become, next to the US dollar, the second most important reserve currency in the world. Reserve currencies are currencies that are considered particularly stable in the world and are easy to exchange. The importance of the dollar is currently decreasing. This is a good prospect for Europe’s currency.

Claudia Wehrle, HR, tagesschau, January 1st, 2024 11:44 a.m

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