30 December 2023

ECB blog: Euro at 25: the value of unity in a changing world

25 years ago, on 1 January 1999, the euro came into force as the single currency for 11 EU Member States. It now serves the economy and eases life for 350 million people in 20 countries.

By Paschal Donohoe (President of the Eurogroup), Christine Lagarde (President of the European Central Bank), Roberta Metsola (President of the European Parliament), Charles Michel (President of the European Council) and Ursula von der Leyen (President of the European Commission)

The case for Europe has always rested on solving problems that countries could not address alone. After the Second World War, visionary leaders understood that the only way to secure peace on our continent was to unite our economies. And a united Europe would, in time, require a single currency to make the most of the economic benefits created by this peace dividend.

In the late 1980s, as Europe took further steps to deepen its single market, the dream of a single currency became a project. And 25 years ago – on 1 January 1999 – that project became a reality. Today, the euro is an indispensable part of our daily life, giving us simplicity, stability and sovereignty.

It has made life simpler for European citizens, who can easily compare prices, trade and travel. It has given us stability, protecting growth and jobs amid a series of crises. And issuing the world’s second most important currency has given us greater sovereignty in a turbulent world. So it is no surprise that the euro area has grown from 11 to 20 countries since its foundation.

There have been tremendous challenges over the years, including questions about the future of the euro itself. But each time we have found the right answers. In response to the global financial crisis and sovereign debt crisis, for example, we established safeguards like the harmonised system of banking supervision and resolution or the European Stability Mechanism. Today, support for the single currency among euro area citizens is close to record levels.

But our work is not done. Because today we face new challenges that countries cannot address alone – and people are looking to Europe for answers.

We face rising geopolitical tensions, not least Russia’s illegal war against Ukraine, which calls for bold collective decisions. We confront an accelerating climate crisis that we can only truly solve together: carbon emissions do not stop at borders. And we face unprecedented challenges to our competitiveness from energy and industrial policies in other parts of the world.

This means that issues like defence, as well as the green and digital transitions, have become urgent matters of common interest. The same is true of how we approach financing the massive investment needed to decarbonise our economies, make our supply chains more secure and upgrade our technologies. In the EU, the green transition alone will require investments of €620 billion each year until 2030.

ECB

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