20th Jan 2022

Euro marks 10th birthday amid financial crisis

  • Slovakia became the euro zone's 16th member on 1 January (Photo: European Commission)

The financial crisis that started in the US, but progressively spread well beyond its borders, is going to present the eurozone economy with new challenges in the months to come, EU monetary chiefs warned on Tuesday (13 January) at a European Parliament event marking the 10th anniversary of the common currency.

"It is no time for complacency. Current challenges are pressing, and new challenges will arise," European Central Bank (ECB) president Jean-Claude Trichet told MEPs in Strasbourg.

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"The crisis has revealed fundamental weaknesses in the global financial system. We are playing an active part in the global efforts to address these weaknesses and redesign the regulatory and institutional framework. A lot of work remains to be done," he added.

For his part, Jean-Claude Juncker, Luxembourg's prime minister and the acting president of the group of countries using the euro, stressed that the current year would be particularly difficult for the eurozone, as well as a test for its cohesion.

"The real test for the cohesion of the eurozone is still facing us ...2009 is going to be an extremely difficult year for the eurozone and its citizens," and there will both internal and external challenges to face, the eurogroup chairman said.

Internally, EU governments will have to increase their co-operation to limit the effects of the crisis and "build a bridge to the after-crisis."

Externally, "we will have to learn the political lessons of the international political and economic crisis" and work on an "in-depth reform of the financial system," he added.

The eurozone was launched on 1 January 1999 and initially covered 11 countries: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. Greece met the convergence criteria in 2000 and joined in January 2001.

After Slovenia entered the euro club in 2007 and Malta and Cyprus followed suit a year later, Slovakia on 1 January became the 16th state - and the first one from central Europe - to adopt the euro.

Some 330 million Europeans are today using the common currency.

Bastion of stability

The EU monetary chiefs called the euro "one of the greatest success stories of European integration" saying that it had allowed the countries using it to react effectively to the global crisis.

Mr Juncker called the euro an "anchor of stability" and an "unquestionable success," while Mr Trichet told EU parliamentarians: "If we had not had a common currency, then we would not have been able to act as quickly and as effectively."

"We can be proud of the prompt response of Europe [to the crisis]," he added.

Joaquin Almunia, the EU's economic and monetary affairs commissioner, also underlined the European currency's merits and highlighted its "deserved reputation for strength and stability."

However, Mr Juncker reiterated his complaint about eurozone countries lacking common international representation and always looking to their national interests first.

"Despite significant progress, the international representation of the euro is still often too fragmentary and national interests too often take precedence over the common interest that we have," he said.

"The Economic and Monetary Union (EMU) is an economic project, but a political project as well. Consequently, we will need to [efficiently] use the second decade of the euro to perfect the EMU" by strengthening it politically, he concluded.

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