20 years with EURO

Happy anniversary!

2022 is an anniversary year for the EUR, which celebrates its 20th anniversary. It should be remembered that many people have decried this currency for many years, claiming that it would never work, that it was an illusion to try to adopt a common currency for so many economically different countries, and that it was just an artificial currency with no future. Economic history seems to have proven them wrong. Today the EUR is a currency that covers a huge, if not the largest, population in the world. It has established itself as the world's second largest currency, no matter what anyone says. Yet the EUR has already been through many crises, including the one in 2011, and recently it demonstrated its cohesive role in the COVID crisis. The detractors are making less noise today. It is true that Europe has had to demonstrate a certain monetary orthodoxy.

“It will never work!”, they said…

The EUR has faced deflation and negative interest rates for a few years (and arguably for a few more). However, the currency has withstood and survived, even though it has fluctuated, been criticized (by Pythias or bad omens), and even gone toe-to-toe with more economically and fiscally lax countries. Despite all the criticism, the EUR has succeeded in its challenge, demonstrating that it is a currency that can stimulate economic activity. It was probably a crazy, ambitious, and undoubtedly complicated objective, which made the critics say that it would never work. There have been some breaches of the treaties, notably Maastricht. But the important thing, in my opinion, was not the economic orthodoxy. The main thing was to give credibility to this new currency and to harmonize.

And next, a virtual EURO

Tomorrow, we are told that there will be a digital EUR, the CBDC's, demonstrating the will to continue to adapt the European currency to technological and social changes. It seems to me that time and history will prove those who once had the crazy idea of having the same currency between different countries right. For those of us who knew the pre-euro era, the fluctuation between the currencies of this zone was sometimes so great that we had to cover the Mark-Franc, the Lire-Florin etc... Telling this to our children is not easy, because they do not understand that we had to change currency when we left Brussels by train to Paris, or when we crossed the Pyrenees.

“Take the long way home” (Supertramp)

The EUR is only a stage in European integration and the generous and ambitious idea of making the Union a common area with its diversities but also its common values, an area of competition and equality for citizens. Of course, there is still a long way to go, and we are still a long way from fiscal integration, for example, but we are moving towards it. I think that today we can congratulate ourselves on this project and those who have supported it must be congratulated. The EUR has changed our lives, especially that of European treasurers. It proves that the European idea, which has been called into question by some recently, remains a great idea and a beautiful project. To have succeeded in imposing this currency was a major challenge and today no one would dare say that the EUR was a mistake or that it will disappear.

History will prove it right

History and the crises have made it possible to shift the policy of monetary and fiscal orthodoxy more towards supporting the economy. Then, let's note that the recent idea of changing the illustrations on our banknotes, from monuments or bridges to European characters and historical celebrities, will allow even more ownership of this currency. Time passes and people naturally forget the difficulties and what was there before. An anniversary is always an opportunity to remember and congratulate the ones celebrating their birthday or anniversaries on what they have achieved.

Fran?ois Masquelier, CEO Simply Treasury – Luxembourg

Disclaimer: This article was prepared by Fran?ois Masquelier in his personal capacity. The opinion expressed in this article are the author’s own and do not necessarily reflect the view of the European Association of Corporate Treasurers (i.e., EACT).

?