The euro at ten

Ten years ago this month, EU leaders took the historic decision to launch the euro. The currency hit the streets in January 1999 and the Economic and Monetary Union (EMU) was born.

Now some 320m Europeans in 15 countries – more than the population of the US – use the same currency and benefit from an integrated EU market.

The euro has also helped us run sound public finances and macroeconomic policies – all of which have created more jobs.

Average government budget deficits in the EU fell to a record low of 0.6% of GDP in 2007 (compared to 4% in the 80s and 90s).

The benefits are tangible and real for everybody. The direct benefits of EMU for the citizen include:

• Inflation in the last 10 years has been around 2% on average.
• Almost 16 million jobs have been created since 1999
• Lower long-term interest rates fell to less than 4%, half the level of the 90s.
• There is no need anymore to exchange currencies which facilitates holidaying and shopping throughout the euro area.
• Stable exchange rates boosted trade among euro area countries.

Although less visible for the citizen, other benefits are equally significant and real:

• Public budget deficits fell to a record low of 0.6% of GDP on average in 2007 compared with around 4% of GDP in the 80s and 90s.
• European markets are better integrated including in the financial area, which for consumers means cheaper products and services.
• This rising international role of the euro, second only to the US dollar provides a shield against turbulences in the global economy.

EMU is a milestone of EU integration. EMU can and should deliver further benefits in the future if its full potential for citizens is to be realised. But the pressing challenges of globalisation, scarce natural resources, climate change and population ageing demand that we urgently improve its functioning for the next decade and beyond. A stronger EMU will also foster the EU's leadership in the global economy.

On the internal front, the euro area needs to increase the surveillance and coordination of its economic policies with the objective of ensuring that sound budgetary policies become a permanent feature, and to deal with the damage that persisting macro-economic imbalances may inflict on a country's competitiveness. In addition, the pace of economic integration needs to be stepped up to make markets work more smoothly.

Secondly, on the external front, the euro-area members must be able to define and agree common positions, to be able to speak with one voice in international forums.