Euro anniversary – The euro is celebrating its 20th birthday – News


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As soon as we cross the national border – apart from the Liechtenstein border – we need it: the euro. Today it is celebrating its 20th birthday, making it around 150 years younger than our national currency. With the introduction of the euro on January 1, 2002, the ten-year major monetary union project was completed. The new common currency also had a lasting influence on Switzerland as a currency island.

Initially, the euro remained stable

The currency situation in Switzerland has stabilized overall with the introduction of the euro, says economic historian Tobias Straumann. “Almost all countries around Switzerland had the same currency from then on. Before, it was the case that from time to time either Italy, France, Spain or other countries devalued their currency. ”

As early as 2007 – five years after its introduction – the euro-franc exchange rate reached its highest level – at that time you still had to pay 1.70 francs for one euro. The initial robustness of the euro surprised Switzerland in principle. According to Straumann, it was initially expected in Switzerland that the new currency would be rather weak.

From a stable currency to a Swiss export brake

After the peak, the euro became weaker and weaker and the rate only knew one direction: downhill.

With the financial crisis and the euro crisis, the situation has completely changed and we are now in a situation that is completely unprecedented in Swiss history.

Straumann sees the weak euro as the biggest problem for the Swiss franc. The euro and financial crises have maneuvered Switzerland into an unprecedented situation. “We have never had the problem that we had to buy so much foreign currency in order to keep the Swiss franc reasonably stable and competitive.”

The weak euro repeatedly led to capital inflows into Switzerland, which in turn appreciated the franc. “The problem is the short-term appreciation spurts. If there is a ten to twenty percent appreciation from one month to the next, then that is very difficult for the export industry. “

The future development of the euro is uncertain

In the meantime, the Swiss National Bank (SNB) kept the exchange rate artificially at the CHF 1.2 limit with unlimited foreign currency purchases. A necessary measure, as Straumann believes. “Otherwise the franc would have become too strong.”

The National Bank’s balance sheet today, at 1,000 billion, is larger than Switzerland’s GDP – we would never have imagined that ten or twenty years ago.

But even that came to an end at the beginning of 2015 when the SNB lifted this minimum exchange rate again. A Swiss franc and export shock were the result. Since then, there have been quieter and more turbulent phases, and the National Bank has repeatedly been forced to intervene, according to Straumann. “At 1,000 billion (one trillion), the National Bank’s balance sheet today is larger than Switzerland’s gross domestic product – we would never have imagined that ten or twenty years ago.”

How the euro will develop is difficult to predict, says Straumann. On the one hand, the euro is currently stable and is not falling apart. On the other hand, the negative interest rates show a non-functioning monetary policy and that has to do with the construction of the euro.

With four different currencies to Holland

The obvious advantage of euro cash from a Swiss point of view: travel. Because in almost every surrounding country you used to need a different currency. The coin collector Thomas Hediger remembers: “When I went to Holland once, I had to travel through France, Belgium and Luxembourg and I needed the corresponding currencies everywhere.”

A problem that has definitely not been known since January 1st, 2002.

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