EMU@10 - successes and challenges after ten years of Economic and Monetary UnionTen years after its launch, the euro is a resounding success. It is a symbol of European integration and has helped us run sound public finances and macroeconomic policies which have contributed to greater job creation.
>> Fact sheet. EMU@10. The euro area: key facts and figures
At the beginning of May 1998, European Union leaders took the historic decision to launch the euro on the 1st of January 1999. Euro banknotes and coins were introduced in 2002. Ten years later 320 million European citizens – more than the population of the United States – share the same currency and fully enjoy the benefits brought about by the integration of the EU. EMU and the euro are a resounding success, shared by 15 European Union countries.
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.
And thirdly, the euro area needs more effective governance. Economic success in one euro-area Member State is good for all the others. Conversely, one country lagging behind holds back all the rest. Therefore national economic and budgetary policies are a matter of common concern and need to be better coordinated.
Against this background the European Commission adopted on 7 May 2008 a Communication which takes stock of what has been achieved over the past ten years and makes proposals and seeks the views of stakeholders on the way forward. This website aims to be a point of reference for everybody interested on facts and figures, analysis and policy conclusions related to EMU.