It’s been 20 years since the euro hit the streets of Catalonia. On January 1, 2022, ATMs began supplying single-currency banknotes, which in the southern countries promised economic growth and equated with those in the north. By the President of the Commission of International Economy and European Union of the College of Economists of Catalonia, Xavier Ferrer, the euro meant a “substantial change” that “has proven to be better” than having continued with the peseta. “It has more power to present itself to the world as a strong economic area,” he said. “The euro area has contributed in a very clear way to the stability of prices in Catalonia”, agrees the professor of Economics ofESADE Pedro Aznar.
The twentieth anniversary of the euro coincides with a time when inflation is at record levels, but Aznar points out that the single currency has made it possible to keep inflation rates “very low” in recent decades. “It is very important for companies not to lose competitiveness and they lose it if they have more inflation,” says the professor, who adds that in no other way would inflation have been kept so low. For Ferrer, the main disadvantages of the euro focus on the loss of the ability of states to manage monetary policy. However, he says it is better to be part of the eurozone than to maintain that power. “We would have been much worse off if we had not been part of the euro,” said the president of the Commission on International Economics and the European Union of the College of Economists of Catalonia, who added that “the numbers support” the common currency. . “If theState Spanish, despite being in the European Union, would not have entered the euro, it would have devalued the currency with the crises and the economic difference with the other states would be greater “, says Ferrer, who also defends that the single currency has not increased both prices as expected.
Both economists, however, admit that the transfer of monetary policy management to the European Central Bank it has led to some “control” over the state’s fiscal and fiscal policy and, as a result, has had to accept austerity policies during the financial crisis. “It has allowed us, with occasional suffering, to continue in the European economic framework, which is where we need to be,” says the president of the Commission on International Economics and the European Union of the College of Economists of Catalonia. The austerity response to the crisis, Ferrer argues, was also due to the lack of mechanisms to deal with the recession and the debt crisis. “There is a defect in form,” he said, adding that the European Union lacks budgetary and fiscal control, which means that economic and monetary policy is “stable”. “We need a stable euro, a stable economic and monetary union and progress towards political union,” says Ferrer, who argues that no state in the EU bloc might be relevant in the international arena by itself. Germany.
Changes in the single currency
Despite initial fears of rising prices due to the changeover to the euro, a fact that Ferrer denies, the single currency has strong support among the population. According to a survey by the European Commission, 69% of citizens in the state consider that the euro has been positive for the country, only one tenth below the European average. The figure rises to 82% in the case of people who believe that the euro has been good for the European Union. With two decades to go, however, the single currency is still evolving. This is shown by the debates regarding whether to keep the one and two cent coins and the membership of having 500 euro banknotes, which some consider to have favored tax evasion. The European Union has been thinking for a decade regarding what to do with one- and two-cent coins, which are especially questionable because of their high cost. Among the options you can consider Brussels there is the fact of stopping producing them and keeping those that are already in circulation or withdrawing them permanently.
The low utility of the extremes, the one- and two-cent coins and the 500-euro banknotes, compared to others, has, in fact, led to fewer and fewer being put into circulation. In the case of the 500 euro banknotes, they were discontinued in 2019 and more are withdrawn each year. But the evolution of the euro is also aesthetic. The current design includes windows and bridges that want to symbolize the spirit of openness and cooperation of Europeans, but is expected to change in 2024. A group advising the European Central Bank is underway on this issue and will then ask for the opinion to the citizens on the selected reasons. The final decision, however, lies with the top of the monetary institution. According to data from the Bank of Spain, 3.2% of the value of banknotes and coins in pesetas that were in circulation in December 2001 have not been converted into euros. This figure is equivalent to regarding 1,575 million in the single currency, 793 million in banknotes and 782 in coins.
The challenges of the euro
The euro reaches the age of 20 being the currency of most European Union countries, 19 of 27. It celebrated its tenth anniversary in the midst of the crisis and in these two decades it has been continuously accompanied by the shadow of crises. especially the debt 10 years ago that put the eurozone project on the ropes. For Aznar, the single currency has two main challenges. The first is to be a currency of a territory that is losing weight internationally on a board dominated by United States i la China. “We have an unusual welfare state and an economic, social and political space where democracy, freedom of expression and the protection of minorities predominate. It is a model that is worth being present “, he remarks. On the other hand, the ESADE professor of economics believes that the citizen must perceive the European Union as a commitment that goes beyond the economy. “It’s important for citizens to see that the European Union cares regarding them,” he said. At this point, both Aznar and Ferrer believe that the recovery fund has been a good initiative for the European Union to be “a project for the future”.
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