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The Euro

Eurobarometer surveys show two thirds of people are still in favour of the euro. By working together we have maintained a healthy euro that ensures citizens and businesses continue to benefit from:

  • price transparency and no risk of exchange rates changing when buying online or travelling to or doing business with other eurozone countries. Trade within the euro area is estimated to have increased between 4% and 10% since the introduction of the single currency. In the first decade since the euro's introduction in 1999, around 8.7 million new jobs were created in the euro area, compared with only 1.5 million jobs in the previous seven years . Moreover, whilst in the 1990s a person travelling through all the EU countries, exchanging money at every border, would lose half their money in exchange costs, today people can travel through EU countries without needing to change currency.
  • price stability – average inflation has remained below the 2% target since the euro's creation, very significantly less than previous inflation levels in most eurozone countries
  • cheaper transactions with other eurozone countries for consumers, travellers and businesses thanks to single euro payment area (average cost of transferring €100 dropped from €24 in 2001 to €2.4).
  • lower cost to borrow money through historically low interest rates and more integrated financial markets. Mortgage rates have fallen from around 8-14% in the early 1980s to the current average of 5% in the euro area, saving a borrower with a €100 000 outstanding loan between €150-750 a month on interest payments. 
  • the benefits of the euro being a strong currency -the euro has appreciated against the US Dollar since it was created and has remained stable against the Dollar during the current debt crisis.

See table on Euro/US dollar exchange rates below (2001-2010).

Euro to US dollar exchange rates: 2001-2010

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
0.90 0.95 1.13 1.24 1.24 1.26 1.37 1.47 1.39 1.33

the attractiveness of the eurozone as a magnet for foreign direct investment from the rest of the world. Studies have shown that the introduction of the euro increased foreign direct investment in the eurozone by between 14 and 16 percentage points.

Euro Plus Pact

The Euro Plus Pact was agreed in March 2011 by the Euro area heads of government as well as Bulgaria, Denmark, Latvia, Lithuania, Poland and Romania.

It aimed to strengthen the economic pillar of monetary union, achieve better co-ordination on economic policy, improve competitiveness and lead to greater convergence. Through focusing on competitiveness, the pact will allow Europe's economy to grow both in the medium and long-term.

Europe's 2020 Strategy for Growth and Jobs

Europe's policies for growth are clearly set out in the Europe 2020 Strategy, which was endorsed by the European Council in 2010.

The Europe 2020 strategy sets five targets to be achieved by the end of this decade in critical areas for the EU’s future: employment, innovation, climate/energy, education and social inclusion.
The targets are agreed for the EU as a whole and were translated into national targets by each Member State in their national reform programmes:
75 % of the population aged 20–64 should be employed
3 % of the EU’s GDP should be invested in research and development

  • the EU should reduce its greenhouse emissions by at least 20 % compared to 1990 levels, or by 30 % if the conditions are right, increase its energy efficiency by 20 % and raise the share of renewable energies in overall energy consumption to 20 %.
  • the share of early school leavers should be under 10 % and at least 40 % of the younger generation should have a higher education degree or diploma

20 million fewer people should be at risk of poverty or social exclusion.

At European and national levels it is expected that the full range of social and economic policies will be utilised to achieve the maximum from the growth agenda. These range from improving the functioning of the labour market, to the EU’s potential for greater innovation, to improving resource efficiency, to improving educational attainment and to helping alleviate poverty and social exclusion.
However, efforts undertaken to date remain insufficient to meet most of these targets. It is, therefore, urgent to concentrate on the implementation of reforms, with a particular attention to measures which have a short-term effect on jobs and growth.

European Investment Bank (EIB)

To abate the effects of the sovereign-debt crisis, the European Investment Bank will increase its paid-in capital to €10 billion by the end of 2012, raised its overall lending capacity to €60 billion, unlocking up to €180 billion of additional investment to help stimulate the European economy.

European Semester

Introduced in June 2010, the European Semester is an EU-level policy co-ordination tool contributing towards the broader EU aims of strengthening economic governance and greater policy co-ordination.

It provides a more integrated surveillance framework for the implementation of fiscal policies under the Stability and Growth Pact as well as the implementation of structural reforms through national reform programmes.