From the 1960s the European Union (EU) had a goal to create a monetary system that could be used throughout the member countries.
In December 1991, a new treaty in the EU was agreed upon, one which contained the needed provisions in order to implement the monetary unity. It took a decade to prepare for the switch from individualized currencies throughout the EU to the Euro. Then on January 1, 2002 twelve European countries switched out their national currencies for the Euro.
There are now 19 EU countries using the Euro, including Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain.
Euro in Circulation
In spite of the rise of digital payments during the pandemic, the use of Euro cash rose in Europe. As of November 2021, the total number of Euro banknotes in circulation was 27,640,019,753 – totalling €1,519 billion. That roughly equates to $1.74 billion.
Demand During the Pandemic
One possible explanation for the increase in the demand for the Euro, even during the pandemic, might be the demand for cash during a crisis. According to an article from the European Central Bank (ECB), “During 2020 the increase in banknote circulation was abnormally high due to the COVID-19 pandemic, a trend that has also been observed in other crises periods. During different types of crises, people tend to increasingly demand cash, and the COVID-19 crisis was no exception.”
The article goes on to state that “crisis periods have fostered cash demand in the past regardless of what kind of crisis occurs. This points to the important role that physical cash seems to play in successful crisis management.”
A Birthday Celebration
With much to celebrate, Christine Lagarde, President of the ECB, wrote in a blog, “Clearly, Europe and the euro have become inseparable. And for young Europeans, who have only ever known the single currency, it must be almost impossible to imagine Europe without it. In fact, support for the euro stood at an all-time high in 2021. And according to the latest Eurobarometer survey our currency now has a 78% approval rate.”
The Euro is also undergoing a facelift. The redesigning of the banknotes will keep “them safe and innovative while updating them to make them more relatable to Europeans of all ages and backgrounds. We will seek input from citizens on the theme and design of our future banknotes, which will be published in 2024, before planning their roll-out.”
From America to Europe, Happy 20th Birthday to the Euro!