posted on the web on April 21 2003

Basic Data

Full Name: European Union Headquarters: Brussels Population: about 371 million (2002 est.) Total area: 3,191,100 sq km Member Countries: Austria, Belgium, Finland, France, Denmark, Germany, Greece Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, United Kingdom. Candidate Countries: Bulgaria, Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Romania, Slovenia, Slovakia, Turkey. Internet site: Europa Source: EU

Europe has a new currency. Or, the European Union now has its own currency. Or, 12 member states of the EU have a new common currency. But others use the currency as well: The various principalities lying within the EU, such as Monaco and Lichtenstein, the Vatican and other territories connected to one of the twelve members use it, as do a few countries outside of the EU and without a connection to a member country, such as Kosovo and Montenegro. However, only twelve members of the EU are signatory nations of the Maastricht treaty, which lays out the principles of the Economic and Monetary Union.

Is it really important to define the Euro in this context? The answer is yes, since the EMU is concerned with more than just money. The EMU regulates the common currency, the Euro, as the European Council finally decided to call it in Madrid in 1995, but it controls other economic aspects of the member states as well, so that not everyone in the EU has a right to be in the EMU. The states have to fulfill various other criteria, known as the Maastricht criteria: each state must meet the set levels of inflation, public deficits and debts, exchange rate fluctuation, and interest rates. These criteria were put into place to ensure the stability of the economic conditions of the members and the convergence among the members. This strict set of rules only permitted twelve states to participate: Austria, Belgium, Finland, France, Germany, Greece (which joined later, after not making the first deadline in 1998), Ireland, Italy, Luxemburg, the Netherlands, Portugal, and Spain. The three other current members had different reasons for not joining as of now: Sweden did not make the first deadline, but has been reassessed and will hold a referendum on the Euro this coming September. Denmark refused to join after the referendum for the Euro did not receive a majority, but has linked the Krone to the Euro via an exchange rate mechanism. The UK decided to wait and see - a referendum may be held once the government feels the time is right, which may be this summer.

Despite the fact that not all of the EU countries are in the EMU and not all European countries (and defining the borders of Europe is another question altogether) are members of the EU, the design of the Euro bills pictures a Europe in which all of the European continent is a member of the EMU: The back side of the winning design has a small map of the European continent on each banknote, with all of Europe tinted darker than the other regions also shown (Northern Africa, Turkey). So, there seems to be the implication that at some point all of Europe will be in the Euro zone. The back of the bills also each feature a bridge, while the front always shows a window. Each banknote represents a certain era through the images of these objects and while the monuments represent a typically European age and style, such as Gothic, Renaissance, Modernity, etc., they are devoid of any natural origin. The idea behind this is that since there are only seven bills, there is not enough space to picture one building from each country. The windows signify the spirit of openness and cooperation, whereas the bridges stand for connectivity among the European states and between Europe and the world.

At the same time, the map of Europe on the coins, which are based on a different design series, only features those countries who are currently members of the EMU. Unlike the banknotes, the coins have on European and one national side. Each country is allowed to design the national side in accordance with its own national symbols, and to decide how to represent the country on the coin. The coins are minted with the different backsides in each country and have turned into collectible items for people all over Europe - a coin from Finland or the Vatican is worth more than the amount it stands for, since so few were minted compared to the numbers of those from Germany or France.

The design selections for the coins and banknotes were made based on a European-wide design contest. The entries were presented to the public by EUS Gallop in an opinion poll to be evaluated before the final decision was made. The care with which the designs were chosen goes to show that the minds behind the Euro were very well aware that a currency is more than just a means of payment. The designs present interpretations of the goals of the EMU indicating that a currency can also be used to spread political messages. Before the EMU, national currencies serves this same purpose and for that reason, citizens may have formed various levels of attachment to their national currencies. For example, for the people of the former German Democratic Republic, the Deutsche Mark represented economic strength, a high standard of living and general political and economic freedom. This symbolism of the Mark carried over even as Germany redesigned and modernized the bills after the reunification.

The Euro, however, is a new, artificial currency with no real backing to it yet. The European Union has yet to evolve from a political and economic system into a cohesive whole offering its citizens an identity. Although the EU has effects on its member countries, the positive ones are generally not very visible for the general public. For example, who notices a convergence of regulations if the EU-wide regulations simply restate the own national status quo? However, the negative effects, such as when the regulations lower national standards, do not really add to the EU’s ability to bind its citizens. Until it is able to do provide connectivity among its citizens, the people will never really consider the Euro to be their currency; it will remain Brussels’ currency.

Yet the European Monetary Union entails much more than simply issuing colorful, crisp bills and shiny coins. The European Monetary Union also set up a European Central Bank which controls the monetary policy of all the member countries. Although the goal of the ECB is solely to maintain price stability, it cannot be denied that the tools necessary to fight inflation may have different effects throughout the economies of the Euro - Zone. As a result, the ECB must try to fit its policy to the economic situations of 12 different countries, all of which mal require different, or even contradictory measures. All the while, the criteria that were set forth under Maastricht rule the level of pubic deficits and debts, lowering the possibilities for the member states to use fiscal policy. Obviously, the EMU requires its members to give up a great deal of economic sovereignty.

The EMU continues the traditional goal of economic integration found at the origins of the EU. It aids this objective by furthering the opening of markets and their accessibility. At the same time, the introduction of the Euro was a very political act, as the economic effects of the Euro are similar to the effects of fixed exchange rates, but carries a greater economic symbolism with it. The introduction on the Euro may help bind the citizens of the EU closer together and to the EU by offering them a piece of the EU to carry around with them. By turning the EU from an intangible organization into something as ubiquitous as money, the Euro offers the EU another chance to become accessible and more visible, giving the citizens a daily tangible reminder of what the EU stands for. The Euro may be the last visible political process capable of bringing the citizens of the EU together before EU enlargement in 2004- and if it does not succeed, the enlarged EU may continue to be plagued by a gap between the European institutions and its citizens.

Nicoletta Mueller-Vogg is a student at Princeton University, USA.

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