The Story of the Euro

337 million people can’t be wrong, right? That’s how many people live in countries that have adopted the euro as their currency. But the history of the euro is rather short—so far. And as our guests this week, senior economist in the economic studies division at the European Investment Bank Laurent Maurin and Aldo Romani, managerial advisor in the euro divison of our capital markets directorate point out, it took the dollar a lot longer to become the well established, liquid, and stable currency that it is today.So the story of the euro, in all likelihood, is far from over. But we’ll begin at the very start: we’ll talk about the Eurco (the European Composite Unit), the ECU (the European Currency Unit), the predecessors of the euro as we know it today, and how the EIB was an early player in issuing bonds in these denominations.More importantly, we’ll find out what have been the benefits of the euro – thereby covering essentially the reasons why it was introduced in the first place:·        interest and inflation rates have converged to a lower level·        exporters are better protected·        investors don’t have to run the risk of a country devaluing their currency·        and how all that more than compensates for the lack of monetary policy flexibility for individual countries.In fact, Aldo Romani describes how the common currency actually created a more competitive environment for the EIB on the capital markets, and how the Bank had to adopt the principle of ‘adventure’, as specified by Italian philosopher Vittorio Mathieu: moving voluntarily towards the future and embracing the change, to turn it into an advantage.We’ll even go as far as ask these guys what’s wrong with the euro. But that will come in next week’s episode. Since you won’t want to miss that – subscribe to our podcast! You can do it on iTunes, Acast, Spotify, YouTube, and everywhere else.We also very much appreciate your feedback (whether via Twitter @EIBMatt and @AllarTankler) or your reviews and ratings on the podcast platforms. Hosted on Acast. See acast.com/privacy for more information.