A decade of the euro

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new years day 2002 and euro notes and coins hit the streets 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 cost make trade and tourism easier while boosting growth and Europe’s clout in the world The currency’s now used by more than three hundred and thirty million people and despite recent events many maintain faith in its future Investors have a lot of trust in the euro I’m not worried in the least But others don’t see it as the promised stabilizer and shelter from global economic crises 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 seventeen different countries using it had different needs particularly after the economic crisis hit As the head of this economist research group explains unfortunately things didn’t go as well with the Euro as we thought the Euro is in an existential crisis at the moment Some countries have overextended 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 was launched overseen by the frankfurt based European Central bank many economists were skeptical They were told that it would work because governments were required to cut their debt before joining and would have to make much needed fiscal and labor market reforms ten years on the crisis has revealed how little of that reform and debt cutting was actually done