Strasbourg, 13/01/2009 (Agence Europe) - As the tangible proof of European integration, shared by 329 million citizens in 16 EU member states, the euro is, above all, the fruit of political vision, a project that this year celebrates its 10 years of existence, but one which took its roots well before the introduction of the single currency in 1999. Argued for by a number of iconic figures, going beyond the initial (and sometimes lasting) scepticism, the idea of an Economic and Monetary Union (EMU) gradually took hold and became a reality with the Treaty of Maastricht. At the formal session in Strasbourg on Tuesday 13 January, the European Parliament celebrated the 10th anniversary of the single currency. MEPs present paid unanimous tribute to the architects of EMU, to their vision and to their commitment to Europe. A step from which those who have taken it feel there can be no backtracking - accession to the euro has now, with the crisis, become a much more attractive proposition for those who are preparing to take the step or are still hesitating. While the attraction of the euro area has not waned after 10 years, the economic pillar of EMU still has to be put in place.
The euro area has become one of stability and the currency has gradually gained the confidence of those who use it, to the extent that it has become a bastion of economic stability in the current crisis, said European Parliament President Hans-Gert Pöttering. “EMU is an irreversible step towards political and economic integration,” he said, and he felt that the adoption of the euro was a signal that the EU could develop a policy that is turned towards the future. Currency is a means of payment, but it is much more than that, it is linked to cultural identity. The euro, then, was one of the most positive outcomes of European unification, and also an expression of a joint, peaceful future, Pöttering added, certain that the accession of other countries would make the area stronger.
When an idea corresponds to the needs of a time, it ceases to belong to those who invented it and it is stronger than those who are responsible for it, said European Central Bank (ECB) President Jean-Claude Trichet, paraphrasing Jean Monnet. He said that “one day (the creation of the euro) will be seen as a decisive step on the road to ever closer union of peoples of Europe”. Bringing dynamism and price stability, the single currency has helped protect incomes and savings, encouraged investment, job creation and prosperity. “It has enhanced price transparency, increased trade, and promoted economic and financial integration within the euro area and with the rest of the world,” he said. Successes that are down to the determination of a number of political visionaries, and to effective cooperation between the European institutions which was being further confirmed in this period of crisis. “In turbulent financial waters isn't it better to be on a large, solid and steady ship rather than on a small vessel?” Trichet asked, and he said we could be proud of the reaction of the European authorities to the crisis. The euro was now firmly established, it was time to celebrate it, but there were challenges on the horizon. A lot of work remained to be done to remedy the weaknesses of the world financial system, and also to improve the EMU economic pillar (implementation of the Stability and Growth Pact, improving productivity and avoiding competitive divergences between member states in the euro area), and to properly handle its future enlargement.
Jean-Claude Juncker, who was immediately enthusiastic about EMU and is the only political leader in office who took part in talks on the Maastricht Treaty (approved in December 1991 and signed on 7 February 1992), drew attention to the difficulties that marked the birth of the euro, from the setting up of the ECU to the Danish “No”, and the crisis in the European Monetary System (EMS). Ultimately, however, with the euro, just as with the internal market and enlargement, “Europe showed the ability to develop ambitious plans,” said the Luxembourg prime minister and finance minister. The visionary, determined leaders, Pierre Werner, Helmut Kohl, François Mitterand, Jacques Delors and Valéry Giscard d'Estaing, could not have imagined such rapid success for their political project, he said. The euro, now, is an anchor of stability, protecting its citizens from the adverse effects of the economic crisis, but “2009 will be an extremely difficult year for the economies of the eurozone”. Domestically, governments would have to work together to contain the crisis, he said, and the protection offered by the euro remained directly linked to the ability to implement prudent policies. Externally, “we have to learn from crisis” and try to remedy the euro's international representation which was too fragmented by national interests, Juncker pointed out. He stressed that EMU was, of course, an economic project, but, first and foremost, it was a political one. Consequently, the second decade of the euro had to be used to improve and perfect EMU, strengthening its political bodies both domestically and externally.
In similar vein, Economic and Monetary Affairs Commissioner Joaquin Almunia hailed the many advantages of the single currency that are still to be seen today.
Those who thought that the EMU would not be able to meet the challenge of the crisis were wrong, he stated. Without the euro, there would be exchange rate volatility and member states' currencies would be subject to speculative attacks. Instead of that, the euro area had acquired a reputation for strength and stability, and had brought the lowest levels of budgetary debt in recent years. He praised the work of the ECB, “our guiding light, our guide (which) has helped prevent a huge financial crash”.
Having worked with German Chancellor at the time Helmut Schmidt as the EMS and the ECU came into being (the ECU saw the light of day in 1979 to stabilise European currencies), Valéry Giscard d'Estaing expressed his pride at the success of the euro. “I belong to those who believe that it is best to avoid commemorations, but this one is justified because it marks the greatest contribution to European integration since direct elections to the European Parliament in 1979,” said the former French President. “It was a long road to travel,” he recalled, citing the pioneering role of the Pierre Werner report in 1970, the Franco-German drive between 1975 and 1980 followed by a period of semi-somnolence between 1980 and 1988 and the resumption of the great move forward with the creation of the Delors committee which led to the Maastricht Treaty. The single currency was a genuine “shield against the crisis and a base for inflation-free growth,” without which “continental Europe would be rocked by a monetary tornado which would worsen the economic crisis,” he said. “Let us be wary, however, of seeking a global dimension for the euro. This would flatter our vanity but would lead to pitfalls,” he warned. “The euro is the currency of the European continent and must express its specific culture of reason and stability, in concert with the other central currencies.” It would be pointless, however, to make the people wait too long for the banking regulation of the euro area to be put in order. He recommended using Article 105(6) of the EC Treaty, which authorises the Council to call on the ECB to carry out this correction and to supervise its application (for credit establishments and other financial institutions but not insurance companies). There was a need for a strong drive, expertise and a timetable which the ECB could draw up and the Eurogroup could adopt and implement, he suggested. “The euro, this symbol of integration, must give us the courage to go further in building this ever more united Europe which the Treaties propose and which we are having difficulty putting in place. To the inevitability of failure, let us oppose the dynamic of success. Today, here, success is called the euro”.
Hailing the success of a vision, a political will, not a success of the market, chairwoman of the EP economic and monetary affairs committee Pervenche Berès (PES, France) wanted work to begin on two further fronts: economic cooperation “If we had made as quick progress on the economic Union as on the political Union, we would be in an even better position today”) and the external representation of the euro (it is not about calling for the euro to become a reserve currency, it is not possible “to remain passive on the international scene”). Werner Langen, co-rapporteur with Berès on the “10 years of the EMU” (see EUROPE 9785), also highlighted the risks building on the horizon, particularly the differences between interest rates for public borrowing. He stressed that, for any future enlargement of the euro area, “there must be no special discount”, and every candidate must meet the Maastricht criteria.
Pointing out that the inflation felt by many citizens differed from official figures and highlighting the criticism of the ECB monetary policy, deemed responsible for the rise in value of the euro, Jean-Paul Gauzès (EPP-ED, France) said that the crisis had changed most of these views. It was now necessary to increase coordination of economic policies, he said, backed in this by Robert Goebbels. “The ECB did what it had to,” but the euro “has not sufficiently dynamised the economy,” the Luxembourg Socialist stated. The ECB might look after monetary policy and the European Commission might be a luxury consultant, “the real economic players remain the states, which are marching to different tunes,” said Wilf Klinz (ALDE, Germany), stating that a single currency without a joint fiscal policy was a huge challenge that remained to be resolved. The euro, born of the desire for integration, was an illustration of how much a common policy was needed when vital interests were at stake, as could be the case with energy at the moment, said Cristina Muscardini (UEN, Italy). “Political Europe has not been completed and remains a problem,” according to Alain Lipietz (Greens/EFA, France), and, while he was not convinced by the Maastricht Treaty, said he “liked the development of economic and monetary stability”. “We cannot accept this false ECB independence” which undervalued the euro and was causing the European economy to contract, regretted Ilda Figueiredo (GUE-NGL, Portugal), while Nigel Farage (IND-DEM, UK) remained convinced that the euro would not see its 20th anniversary. A similar prediction was made 10 years ago, but was effortlessly disproved. (A.B./transl.rt)