Euro, after 25 years it is better to have it than not to have it
Euro yes, euro no, 25 years after its birth and after many crises and errors, the single currency seems to have demonstrated, even to the most reluctant, that it is much better than the alternative of not having it. Even if many senior Italians think nostalgically of the old lira and continue to manage the daily economy thinking in lira, the euro has had the advantage, one among many, of having created a “stability zone” where countries, protected by a sort of dome, develop their economies. Of course, there are still many mistakes that are made every day in legislating, very often driven by ideology (examples such as the laws on agriculture or those on the green housing deal) but the balance weighs more towards the positive.
Euro, the first idea of the Euro was born in Madrid in 1995
The idea of the single currency was born in 1995 in Madrid to be able to erase the crisis of the EMS exchange rate mechanism. We started with the conversion of the pesetas into euros (1 euro equal to 166,386 pesetas). The ECB took the lead in European monetary policy. 24 months of testing and then in 2002 the euros in banknotes and coins began to circulate. In reality, the euro had started trading earlier at the beginning of 1999 with an exchange rate against the US dollar of 1.18. An exchange rate that immediately lost 30% of its value, reaching a minimum of 0.82 after less than two years. From that moment on, however, the European currency has always appreciated up to the record of 1.60 per dollar in 2008. Although the prophets of doom, primarily Milton Friedman, predicted the euro’s failure, the currency has instead attracted new members. With the latest arrival, Croatia, the members of the “club” are 20, almost double the 11 starting. But not everything was easy and right also because the birth of the single currency started with a formal flaw that didn’t help. The vice was the alleged “cultural superiority in economic matters” of France and Germany, and the doubts (especially of the Nordic countries) of keeping under control the fiscal indiscipline of highly indebted countries such as Italy and Greece.
Euro, the distrust of rich countries towards the poor at the basis of the European Union
Mistrust has always been at the basis of the development of complex regulations aimed at keeping the budgets of highly exposed countries under control. A mistrust that has become a real fury with Greece and its “monstrous” debt. However, the pandemic has brought the entire eurozone back to a greater awareness that only united can we survive and even the northern countries, the rigorous and ruthless “frugal” ones, seem to have understood this. And then here is the miracle, unthinkable just a year before Covid, the birth of Eurobonds to support European internal demand. In addition, the energy crisis born from the war in Ukraine has triggered, “obtorto collo”, a certain solidarity even among the most selfish countries that have understood the simple phrase “unity is strength”. And here is the aid, more or less non-repayable, from the PNRR. For Italy, a mountain of money that has reopened hopes and trust in the single currency. Of course the road is not easy because at every moment, the rich European countries that are sitting on a sea of oil, view with suspicion the financial balancing acts of the southern countries forced to live with realities made up of enormous debts and equally enormous problems, first of all all, migration from North Africa without control. In conclusion, many steps have been taken in the right direction and, despite some selfishness, European solidarity has taken over, and this can only be a good thing and a guarantee of future growth for the Old Continent.