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TESS VIGELAND: We begin today with not just New Year’s greetings, but birthday greetings as well. The first, to my mother. And next, to the euro.
The European single currency is 10 years old today. And it’s in pretty good shape in spite of the global financial crisis. Sixteen member countries of the European Union now use it — an area that stretches from Cyprus to Ireland and from Portugal to Finland.
There are now more euros in circulation than U.S. dollars. But as our Stephen Beard reports, the euro’s beginnings back in January 1999 were far from auspicious.
(SOUND CLIP: Choir sings “Land of Hope and Glory.”)
STEPHEN BEARD: With this ecstatic rendition of “Land of Hope and Glory” the euro was born. It then hit the currency markets and dropped like a stone.
HOWARD WHEALDON: It went into a very, very sharp plunge on the very first day, and it didn’t stop. It didn’t go down well.
Money broker Howard Whealdon says that traders called the euro a “toilet” currency and dumped it fast. Within two years it had fallen almost a third against the dollar.
Economist Andrew Hilton predicted the euro wouldn’t survive. One currency with one interest rate just wouldn’t work for a dozen or so different economies:
Andrew Hilton: I didn’t think that it would last a decade. And I certainly didn’t think that it should last a decade. So I have to eat my words and say I was wrong.
Today the euro is riding high, a haven of stability in turbulent times. It has flourished largely due to dollar weakness. But Gideon Rackman of The Financial Times says the euro is now entering its most testing period with the eurozone in recession.
GIDEON RACKMAN: Different countries in this recession we’re heading into, that we’ve actually already started, will need different levels of interest rates and different policies, and that could cause strains within the euro group.
But on its 10th birthday, and in these testing times, the euro can derive a quantum of solace from an unusual quarter:
SOUND CLIP: The name is Bond. James Bond.
In the latest Bond movie the villain pays his conspirators in euros because “The dollar isn’t what it once was.”
In London, this is Stephen Beard for Marketplace.
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