The euro needs to be introduced into the digital age, and a capital markets union and a stronger banking union are necessary, European leaders announced ahead of the 25th anniversary of the euro currency.
The euro came into effect 25 years ago, on January 1, 1999, and today it is the currency in twenty countries with 350 million inhabitants, the latest member being Croatia, which joined at the beginning of the year.
President of the Eurogroup Paschal Donohoe, President of the European Central Bank (ECB) Christine Lagarde, President of the European Parliament Roberta Metsola, President of the European Council Charles Michel, and President of the European Commission Ursula von der Leyen marked this anniversary with a joint article published on the ECB’s website.
In the article published on Saturday, they write that the common currency has provided the European Union with “simplicity, stability, and sovereignty” and has made life easier for European citizens who can now easily compare prices, trade, and travel.
Over the years, the euro has faced significant challenges, including questions about its survival, the European leaders write, emphasizing that “the right answers have been found each time,” such as the harmonized banking supervision system after the major crisis in 2008.
– Today, support for the common currency among citizens of the eurozone is approaching record levels – they highlighted, warning that the job is “not done” as new challenges lie ahead for Europe that individual countries cannot face alone.
Mobilization of private financing
The union is facing rising geopolitical tensions, primarily Russia’s “illegal war” against Ukraine, an accelerating climate crisis, and unprecedented challenges to European competitiveness coming from other parts of the world.
Therefore, key issues in the future will include defense, green and digital transition. Just for the decarbonization of economies, 620 billion euros annually will be needed by 2030, they warned.
The EU must build a true capital markets union to “mobilize private financing,” strengthen the banking union, and reform fiscal rules. The euro needs to enter the “digital age,” and the foundations for a potential “digital euro” that will be complementary to cash must be prepared.
Leaders warn that with “several countries currently in the process of joining the EU,” the union must retain the capacity to “act decisively.”
– Enlargement and deepening are not mutually exclusive. However, enlargement may require changes to the organization of the EU – the article concludes.
