Looking at the euro as it turns 10
The European single currency -- the euro -- is 10 years old today. Compared with the dollar it is in decent shape. But it wasn't always that way. From the Marketplace European desk, Stephen Beard reports.
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STEVE CHIOTAKIS: The European single currency -- the euro -- is 10 years old today. Compared with the dollar it is in decent shape. But it wasn't always that way. From the Marketplace European desk, here's Stephen Beard.
STEPHEN BEARD: With a giant street party on New Year's Day in 1999 the people of Frankfurt celebrated the birth of the euro. The euphoria didn't last. The new currency fell on the foreign exchange markets. And went on falling for more than a year. Many economists -- like Professor Tim Congdon -- forecast at the time that the euro would disintegrate.
TOM CONGDON: I've always thought that when we come back and look at this in 10 or 20 years time we'll just regard Europe as having gone barmy.
Ten years on, the euro doesn't look quite so crazy. Howard Whealden is with BGC brokers. He says merging more than a dozen European currencies into one has worked beautifully.
HOWARD WHEALDEN: It's created a stability, a stability that was never there before. And thus I think the euro has been a great success.
The euro has flourished in recent years -- largely due to dollar weakness. But the eurozone is now sliding into recession -- one currency with one interest rate for sixteen different economies... now that could be tricky. Gideon Rackman of The Financial Times.
GIDEON RACKMAN: I think that it will be very interesting to see how the euro area copes during a recession because at that point the fine detail of economic policy, things like the level of interest rates become even more urgent.
Nevertheless the euro is now riding high. Slovakia has just become the 16th country to adopt it. Poland, Hungary and Denmark may not be far behind.
At the European Desk in London, this is Stephen Beard for Marketplace.
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