Inflation, at the heart of world news, has reached levels in France that have not been seen for decades.
What should we think of this return of monetary depreciation? Why is inflation suddenly high? How to explain the differences between countries? Should we be worried about the return of inflation? How to fight against inflation? Vie-publique.fr publishes the latest reports, laws, and news on the sources of inflation and its impacts.
Launched in 1999, the single European currency has rather kept its promises despite the absence of a common economic policy. The euro has established itself as the main rival currency of the dollar on the foreign exchange market. In 2022, the euro will return to parity with the dollar.
The euro against the dollar is the Old Continent against the New World, Europe against the United States. Created with many hopes, the single currency did not put an end to the supremacy of the dollar, which reigns since the end of the Second World War on the world economy. But the euro has undoubtedly reinforced European identity and constitutes tangible proof of the liveliness of the European project.
The euro regains parity with the dollar
Since its creation in 1999, the euro has risen and fallen against the dollar, illustrating the evolution of the balance of power between the two competing zones. In July 2022, the single currency has regained parity with the dollar, a level last reached in 2002.
The euro has always been more than just an exchange rate. It is part of the European project and gives it a physical identification. Europeans are largely supportive of their currency, with the euro’s popularity rating rising over the long term.
The euro, the second international currency behind the dollar
Launched for compete with the dollar, the single currency partly fulfilled this promise. The emergence of Economic and Monetary Union has enabled the European Union to assert its visibility on the international scene. But the euro failed to dethrone the dollar as the main international currency of reserve and exchanges but also as a central reference for the value of other currencies. If the euro could increase the attractiveness of Europe internationally and has long since overtaken the yen and the pound sterling, the European currency remains behind the dollar.
In the absence of a common economic policy at European level, it is the European Central Bank (ECB) who to this day embodies the role of ultimate guarantor of the euro.
The euro, a currency like no other
The euro is currently the official currency of 19 of the 27 member countries of the European Union (EU). These countries have transferred their powers in monetary matters to the European Central Bank (ECB). At 1is January 2023, the Croatia will be the twentieth country to adopt the euro.
Stability and Growth Pact, Eurogroup, Banking Union and European Stability Mechanism (ESM): the economic governance of the euro zone has been refined as the euro came into existence. The euro zone is still far from homogeneous, making it difficult to define a common monetary policy given the divergent economic situations and policies.