An Oral History of the Euro

Have Europeans lost their enthusiasm about a single currency?

October 25, 2000

Have Europeans lost their enthusiasm about a single currency?

When they launched the euro on January 1, 1999, Europe’s politicians and bankers were not shy about expressing their hopes and anxieties over how well the new currency would fare. Now a grim reality has set in. Our new “Read My Lips” feature chronicles the new currency’s short history.

To its supporters, it seems like the euro is much more than simply a currency:

“The value of the euro is the value of Europe.”

(Commentary in the Germany newspaper Frankfurter Allgemeine, February 1999)

“With the introduction of the euro we laid the foundations for our European house. Now we have to build the pillars in order to become stable and for the economy to grow in the long term.”

(Romano Prodi, then EC president-designate, March 1999)

“The euro can and must be a leading edge of the European construction.”

(French Finance Minister Laurent Fabius, May 2000)

Despite its subsequent loss of value, the euro had a smooth launch:

“It’s like switching from Celsius to Fahrenheit. It doesn’t get warmer or colder. You aren’t richer or poorer.”

(An EU official, December 1998)

“For all the great excitement that built up ahead of the euro, it turned out to be a little bit of a damp squid.”

(London-based currency trader, January 1999)

But weren’t there some early warning signs, too?

“The euro zone is the world’s last emerging market.”

(Norbert Walter, chief economist of Deutsche Bank, in 1999)

“I use dollars.”

(European stock analyst who couldn’t get the euro symbol to work on his computer, February 1999)

“With the introduction of the euro, the Bundesbank’s role in managing the deutschmark is reduced to weeding worn-out deutschmark bills from circulation — and little else.”

(Otmar Issing, ECB chief economist and former Bundesbank official, November 1999)

And it didn’t help that the UK, one of Europe’s biggest economies, refused to join:

“The UK’s decision not to join the euro from the start may be the European tragedy of the present generation of British leaders.”

(Yves-Thibault de Silguy, a former EU commissioner, in 1999)

“Let’s be clear: In or out, we are all affected by the euro.”

(British Prime Minister Tony Blair, January 1999)

And what about the effect on the euro of Wim Duisenberg, the president of the European Central Bank?

“It is difficult as of yet to find evidence of a new economy in the euro area.”

(Wim Duisenberg, June 2000)

“The guy is giving you less and less reason to like the euro.”

(European investment banker commenting on Mr. Duisenberg, October 2000)

“What are you doing, sir, to my savings? You promised us a hard currency.”

(Letter received by Mr. Duisenberg in November 1999)