On Jan 1st 1999 a new currency was officially born: the Euro. It was the result of the efforts of most members of the European Union aiming to create a single currency to foster growth in the area, be strong against market storms and cut down on banking costs. That day the exchange rate with respect to the 11 initial participating currencies was set in stone and the European Central Bank took control. For three years the Euro remained something untangible, but on Jan 1st 2002 actual coins and notes were circulated and the now obsolete national money retired.
I remember that day when we started to convert our money. Paying in Lira and getting back change in Euro was a little mess but also fun. Luckily enough the confusion only lasted for one month and then almost everybody was quickly up to speed doing math with the new coins. Due to the roundings and the psychological effect there’s been a period of hidden inflation, with prices rounded up but then our economy became stronger and the inflation was kept very low. People was able to get loans as low as 2.5% interest rate, something unheard of in this part of the world.
Initially the Euro was weak, declining from $1.16 down to $0.82, but soon after that it started a slow but steady recovery that this year culminated in a peak at $1,60. Even during the current credit crunch crisis, our currency is stable. Nations like Sweden, Denmark and The United Kingdom chose to stay out of the game to maintain control over their own monetary policy but now they are changing their minds, as they see their currency plunge. The British Pound in particular is sinking quickly and almost down to parity. More countries, especially in the Eastern Europe are now trying to join the club and don’t forget the Euro is now popular even in New York. All in all we can certainly say the Euro delivered.
I’ve never been so happy to live in the Eurozone!
