Another year older and deeper in debt? The divisive euro turns twenty

Euro banknotes and coins came into circulation in 12 countries on January 1, 2002. The move was greeted with a mix of enthusiasm and scepticism. Two decades later, the single European currency appears to have overcome initial doubts, consumer concerns about price inflation, and a major debt crisis.   

INA FASSBENDER AFP/File

The euro is now used by 340 million people in 19 nations.

The idea of creating a single currency first emerged in the 1970s as a way of deepening European integration, making trade more simple between member nations, and giving the continent a monetary unit which could compete with the US dollar.

Officials credit the euro for helping Europe avoid an economic catastrophe during the coronavirus pandemic.

"Clearly, Europe and the euro have become inseparable," European Central Bank chief Christine Lagarde wrote in a blog post.

"And for young Europeans, who have only ever known the single currency, it must be almost impossible to imagine Europe without it," she wrote.

Round up of price rises

In the euro's initial days, consumers were concerned that the new currency had caused prices to rise.

Though some products -- such as coffee at cafes -- slightly increased as businesses rounded up their conversions, official statistics have shown that the euro has brought more price stability.

The cost of a baguette in France, for example, rose from 66 cents in 2001 to 90 cents today -- an increase in line with pre-euro inflation.

More expensive goods have not increased in price, and have even dropped in some cases.

Nevertheless, the popular belief that the euro has made everything more expensive persists.

Still trailing the dollar

The red, blue and orange banknotes were designed to look the same everywhere, with illustrations of generic Gothic, Romanesque and Renaissance architecture to ensure no country was represented over the others.

Last month, the ECB said the bills were ready for a makeover, announcing a design and consultation process with help from the public. A decision is expected in 2024.

"After 20 years, it's time to review the look of our banknotes to make them more relatable to Europeans of all ages and backgrounds," Lagarde said.

The ECB is also considering creating a digital euro in step with other central banks around the globe.

While the dollar still reigns supreme across the globe, the euro is now the world's second most-used currency, accounting for 20 percent of global foreign exchange reserves.