Frankfurt, Dec. 31 (BNA): The European Central Bank is celebrating the 20th anniversary of the issuance of euro banknotes and coins as member states grapple with the impact of the pandemic on the economy and the European Union is crafting a new level of financial cooperation to help boost the recovery. .
The event is celebrated at midnight on New Year’s Eve with a blue and yellow light show, in the colors of the European Union, on display at the skyscraper headquarters in Frankfurt, Germany, the Associated Press (AP) reports.
The introduction of banknotes and coins in 12 countries on January 1, 2002 was a huge logistical undertaking that followed the introduction of the euro for accounting purposes and electronic payments three years earlier, on January 1, 1999. Today, the euro is used in 19 of the 27 countries in the European Union.
The introduction of cash saw euro banknotes and coins quickly replaced by German marks, French francs, and Italian lira at ATMs, cash registers, wallets, and purses.
Store customers who paid in old currencies received a change in euros according to fixed exchange rates. This resulted in the old coins being taken out of circulation as the people spent the rest of their national money.
Warnings of a logistical disaster did not materialize. Christine Lagarde, the head of the European Central Bank – in 2002 a solicitor at a global law firm – summoned her first euro withdrawal from a cash machine near her home in Normandy with friends who expected the switch would overburden the machines.
“We made a bet: if the machine gave us French francs instead of euro notes, they could keep the money,” she wrote on the ECB’s website.
After midnight, we tried the ATM.
I handed out brand new euro banknotes, and we all raised a glass of the new European currency.”
The bank plans to redesign the banknotes, with a final decision on the new shape expected in 2024. The original designs with windows, entrances, and public bridges from different eras that do not represent any particular venue or monument have undergone a relatively minor update since introduced.
The bank is also studying a possible digital version of the currency.
The Euro has seen its ups and downs since it was launched as a major project of European integration. The currency union faced speculation that it would collapse during an extended crisis over government and bank debt in 2011-2015.
European Central Bank President Mario Draghi helped end market turmoil by promising on July 26, 2012 to “do whatever it takes” to preserve the euro, followed by the ECB’s offer to buy up government debt for countries facing excessive borrowing costs.
Under Lagarde, the central bank has published a 1.85 trillion euro ($2.1 trillion) bond-buying program aimed at keeping borrowing costs low for companies so they can weather the worst of the pandemic.
In response to the pandemic, EU governments have taken another step towards economic and financial integration by agreeing to borrow money together for the €807 billion Next Generation European Recovery Fund.
The fund aims to support post-pandemic recovery by financing projects that help the economy reduce carbon dioxide emissions in order to combat climate change, and that support the increased use of digital technology.
Finance ministers from eurozone member states said in a joint article published in major European newspapers that there is still work to be done to strengthen the common currency, such as improving the way private investment flows across borders and strengthening joint banking supervision to prevent costly crises.
“None of these issues can be addressed by states acting alone,” they wrote. “The euro is a testament to what we can achieve when we work together.”
Irish Finance Minister Paschal Donohue, who chairs the Eurogroup finance ministers committee from member states, said the currency “has solidified its foundations over the past 20 years. It has proven its ability to deal with major challenges and major crises.”
M