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The common currency united the EU countries even more. But for the countries of Southern Europe it brought a lot of economic problems.
On 1 January 2002, twelve EU countries introduced the euro. In addition to Germany, this currency became the official currency in Belgium, Finland, France, Greece, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal and Spain.
The common currency united the EU countries even more. This was a big step for the European Union and a big bag of surprises as well, because no one could predict with certainty how the new currency would go.
The second currency after the dollar
The euro ended the global dominance of the dollar. But as a reserve currency, the dollar continues to be arguably number one. According to International Monetary Fund statistics, about 59.2 percent of all official foreign exchange reserves in the second quarter of 2021 were in US dollars. The euro ranks second with 20.5 percent.
In terms of international transactions both currencies are at the same level. According to data from the SWIFT organization, whose computers are used to process almost all global transfers, in October through the SWIFT network were transferred approximately the same amount of money in US dollars (39.1 percent) as in euros (38.1 per cent). hundred). A year ago even the euro was slightly ahead of the dollar.
Economic problem for Southern European countries
The economic power of the twelve countries that introduced the euro in 2002 has since grown by almost 50 percent. But in most southern European countries, however, growth is much lower than in the north. This is true even if we do not take into account Luxembourg and Ireland, where growth was particularly strong due to the finance and IT sectors in these countries.
Portugal, Greece and Italy
Portugal and Italy are particularly behind. And Greece has seen almost no economic growth in those 20 years. The reason for this is related to the debt of eurozone countries about ten years ago, as a result of which the economy in many countries shrank. This process was very dramatic especially for Greece and Italy, which without having their own currency could not alleviate the crisis by devaluing the local currency. The crisis of that time continues to be reflected in the high number of unemployed in these countries./DW/
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