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Abstract by the author: Contrary to many negative predictions, the euro, as a currency, is a remarkable success in terms of credibility and stability. The euro, as a currency, and the euro area, as a single market with a single currency, proved a remarkable resilience in the worst global fnancial crisis since World War II. The euro area was quick, imaginative and fexible to learn lessons from the global fnancial crisis. The euro and the euro area were and are benefting from a large popular support, which explains largely their resilience in the crisis. The euro area is a success in terms of real growth measured during the period starting from its inception until today.
Abstract by the author: We miss the significance of the advent of the Euro for European political, economic, and social order if we ignore its identity dimension. Money has always been a symbolic marker in nation-building efforts and is strongly related to collective national identities. This article makes two interrelated causal claims. On the one hand, the introduction of Euro bills and coins has already begun to affect Euroland citizens’ identification with the EU and Europe in general. The Euro makes Europe real and reifies it as a political order, since it provides a visible link from Brussels to the daily lives of the citizens. On the other hand, existing collective identities pertaining to the nation-state explain to a large degree how comfortable people feel using and dealing with the Euro. The variation in attitudes between the Italian enthusiasm for the Euro, the German ambivalence about it, and the widespread British opposition can be accounted for by the differences in collective understandings and identification patterns with the nation-state and Europe. In sum, the causal arrows from the Euro to collective identities run both ways.
Abstract by the authors: Money is a powerful ideological messenger because of its omnipresence in everyday landscapes. Recent research on banknotes shows that images printed on money support the production and maintenance of national narratives, thus helping to legitimize power structures in the finest tradition of “banal nationalism.” We expand this scope by examining the carefully balanced coexistence of supranational cartography and national imagery on 120 euro coins. Our empirical study demonstrates the significance of metal money as a multi-faceted tool of political identity projects within the European Union. The study shows how recent contributions to visual methodologies are useful in the interpretation of monetary iconography. The findings are applicable to postage stamps and street names, the messages of which are similarly controlled by political elites.
Abstract by the author: Professor Smits' Inaugural Lecture on June 4, 2003 began as follows: "The answer to the question: "Is Europe a federation?' can be found in your pockets".2 In doing so he referred to the new euro banknotes and coins that are legal tender in the Member States that have adopted the euro. On June 24, 2003 the German legal journal EuZW3 also published a commentary by Professor Dr Seidel entitled "Euro-Banknoten ohne Angaben der emittierenden Banken". This commentary analyses the design of euro banknotes and it notes, inter alia, that their design might give rise to the erroneous assumption that they have been issued by the European Central Bank (ECB) alone. Whilst Professor Seidel raises a number of valid issues, his commentary does not do full justice to the role of the ECB in the issue of euro banknotes. Following these two contributions there is a need to analyse the ECB's role in issuing euro banknotes in detail and more generally to review the legal nature of euro banknotes. This article will begin by describing the institutional relationship between the ECB and the European System of Central Banks (ESCB), which together form the Eurosystem. It will then analyse these various bodies' roles in the issue of euro banknotes. Subsequently, it will address the question of whether the design of euro banknotes creates a false impression regarding their legal issuer. Finally, this article will analyse the legal nature of euro banknotes.
Abstract by the authors: This paper reports on the mixing of Euro coins from different countries of origin in Europe, which started on 1 January 2002. There is an interesting conclusion: that the mobility of small and large denominations is different. The long-term behaviour of the mixing process is studied using a simple deterministic model and data from Germany, France and the Netherlands. The analysis leads to predictions about the future progress of the mixing process.
Abstract by the author: For months I had been walking past a revolving electronic clock, situated just outside the Brussels headquarters of the ETUC, that was inexorably counting down the seconds. As champagne corks flew to usher in the New Year 2002, the figures finally said ‘0 days, 0 hours, 0 minutes and 0 seconds to the arrival of euro notes and coins’. Next day the run on banks and shops began. In 12 European countries, some 300 million people struggled with converters, unfamiliar change, and lengthy queues. Politicians, central bankers and the media were full of reports of the momentous occasion. The euro was the talk of the town. Everything, it seemed, had changed.
Abstract by the authors: Une expérience a été réalisée afin de déterminer la qualité du souvenir que nous possédons concernant les détails de pièces de monnaie nouvellement introduites en Europe, les pièces françaises d’Euro. Les variables manipulées sont l’âge des sujets (20–29 ans ; 30–39 ans ; 40–49 ans ; 50–59 ans), le délai après l’introduction de la nouvelle monnaie (1 mois, 4 mois, 1 an), le type de pièce (2 centimes d'Euro, 50 centimes d'Euro, 1 Euro) et les caractéristiques (opératives vs secondaires). Trois principaux résultats émergent de cette expérience. Premièrement, les performances de rappel sur les pièces de monnaie sont plutôt médiocres. Deuxièmement, les résultats sont en accord avec l’idée selon laquelle les détails d’un objet sont habituellement disponibles en mémoire dans la mesure où ils sont utiles dans la vie de tous les jours. Troisièmement, les performances de rappel concernant les pièces ne diffèrent pas, en moyenne, d'un groupe d'âge à l'autre, ni d'un type de pièce à l'autre, ni d’une période à l’autre.
Abstract by the authors: Sovereign bond market fragmentation represents one of the major challenges European authorities have had to tackle since the outburst of the euro area debt crisis in 2010. By investigating the inter-country shock transmission through a new methodology that reconciles Factor and Global Vector Autoregressive models, we first show that fragmentation risk well preceded the sovereign debt crisis outburst. Most importantly, by analyzing the recent period, we document a rise in fragmentation risk in the euro area during the COVID pandemic. This rise, connected to the pressure on public debts and deficits due to the pandemic period, questions the European integration process and calls for early measures to avoid a new sovereign debt crisis.
Abstract by the authors: This work analyzes the influence of privacy concerns and different dimensions of currency-related trust on individuals’ willingness to use Central Bank Digital Currency (CBDC), specifically a digital euro. A quantitative survey with 1034 respondents was analyzed using partial least squares structural equation model (PLS-SEM). Empirical results indicate that multiple antecedents are associated with privacy concerns in the digital euro that in turn influence intention to adopt a digital euro. Especially soft trust factors such as credibility and image are found to influence both privacy concerns and the intention to adopt a digital euro. It contributes to the current literature by introducing trust as a second-order construct composed of hard and soft trust factors for digital currencies. The results provide valuable insights for researchers and practitioners aiming at designing and implementing CBDCs by demonstrating which factors need to be considered in order to achieve widespread adoption by citizens.
Abstract by the author: The ravages of two world wars and a desire to develop a politically and economically united Europe led to the establishment of the Eurozone in January 1999. The European Monetary Union was a grand experiment that brought 11 European nations under a single currency, the euro. Complexities associated with the implementation of effective fiscal, budgetary and banking coordination left the bloc vulnerable to asymmetries in the productivity and factor markets of its members. This article analyses how adoption of the euro, which prevented nominal exchange rate adjustments, impacted on the competitiveness and real economies of member states, thereby undermining the European Union’s key priority of creating balanced economic growth and productivity.
Abstract by the author: The euro has had a difficult second decade but the project has still had some important successes. The common currency is popular among the Euro Area's citizens, intra-European exchange rate instability has been removed and the ECB has successfully achieved its primary goal of price stability. The single currency's popularity has made the euro more resilient than many sceptics thought possible twenty years ago. A number of improvements to the architecture of EMU have been implemented in the past decade but serious tensions remain, relating to fiscal capacity, sovereign default and financial stability. To keep the euro together, Europe's politicians need to make the Euro Area less crisis-prone and to make it easier for member states to recover from the inevitable cyclical downturns that will happen in the future. The past few years have seen many proposals put forward for future improvements to the economic policy structure underlying the euro. Keeping the euro together may depend on Europe's politicians agreeing to implement them.
Abstract by the authors: The Euro Spatial Diffusion Observatory (ESDO) database records face-to-face questionnaire surveys conducted between March 2002 and December 2011 in France, in December 2003 in Belgium and in December 2005 in Germany. The data provides information on the coins contained in the respondents' wallets at the time of the survey, classified by country of origin and value. A series of control variables provide information on the socioeconomic profile of the respondents and the location of their place of residence at the NUTS 3 level. In total, more than 22,500 people opened their wallets and about 300,000 coins were registered allowing the tracking of euro coins circulation from their country of introduction on January 1, 2002 (or later for countries that joined the euro zone afterwards) to their place of observation at the time of the survey.
Abstract by the author: Over 2014–2019, the euro area charted a substantial post-crisis economic recovery while also reducing macro-financial vulnerabilities. The array of post-crisis institutional reforms has improved the capacity of the euro area to withstand adverse shocks, even if the narrowing of imbalances also came at a high cost (especially in the most indebted member countries). The pandemic has provided a new test: the combination of a common central bank and the enlargement of the common fiscal capacity has provided substantial policy support and fostered a narrowing in risk premia, despite significant differences in levels of public debt and exposures to the pandemic shock. While the resilience of the euro is sure to be tested further in the coming years, the extent of the underlying political backing for the common currency should not be underestimated.
Abstract by the authors: The sovereign debt crisis since the late 2000s in the Euro Area revealed that, in reality, there are two monetary unions in Europe: the core and the periphery. The core-north countries have sounder fiscal balances and lower inflation rates, whereas the periphery-south ones are more prone to higher inflation and public deficits. The principal aim of this paper is to explore which countries handle the nominal exchange rate of the euro. By doing this we will effectively challenge the statement ‘.one size fits all’ upon which the euro project was built. We used the real exchange rates of the initial 12 Eurozone members as an empirical instrument. Our evidence is based on the bivariate regression analysis and the Asymmetric Component GARCH (AC-GARCH) model. We discovered that the countries of the Eurozone core influence more the euro nominal exchange rate than the periphery ones. In addition, the euro is more vulnerable to the volatility shocks of the German and the French real exchange rates.
Abstract by the authors: The euro and the European Central Bank (ECB) are inextricably linked at the institutional level, yet public opinion diverges: support for the euro remained high even at the height of the crisis while trust in the ECB saw a steep decline. How can we explain divergences between support for the euro and trust in the ECB? The present paper seeks to complement the existing literature by developing a unified analytical framework of public support for Economic and Monetary Union (EMU) and introducing a novel typology of euro and ECB sceptics and supporters. Empirical findings show that support for the euro is predominantly value-based, whereas perceived performance matters comparatively more for trust in the ECB. They suggest that value-based support has been critical during the crisis in ensuring continued public support for EMU despite perceptions of underperformance.
Abstract by the author: Liquidity management is a key mission of a central bank. In particular, the adequate provision of banknotes requires the understanding of what drives currency demand. The challenge is even bigger in the case of the European monetary union where the euro continues to develop into a well-established currency outside borders. In this respect, a novel indicator is proposed to reflect foreign demand developments. Moreover, besides the usual set of determinants, variables covering financial and economic policy uncertainty are also taken into account. The full denominational breakdown of banknotes is considered so as to unveil the heterogeneous role played by the several drivers. It is found that external demand is relevant for large denominations and uncertainty also matters for cash demand. Furthermore, the recent ECB announcement of the end of issuance of the largest denomination banknote led to a reduction in the overall demand for euro banknotes.
Abstract by the authors: Does European state building go hand in hand with European nation building? This article engages with the scholarly debate on the dynamic relationship between the construction of supranational political institutions that exert key functions of sovereignty and collective identities by investigating the extent to which the adoption of the Euro as a currency is associated with a decrease in the share of Europeans who identify exclusively with their nation and not with the European Union. In detail, by using a dynamic panel-data model on 26 European Union countries in the post-Maastricht period (1996–2017), our results show that the Euro has fostered European identity, leading to a small but significant decrease (-3%) in the share of Europeans with exclusive national identity.
Abstract by the authors: Money can be a tool to achieve a wide range of goals in everyday life. Diferent studies have reported that both the mere exposure to money and its use as a reward can determine cognitive and social efects. Nevertheless, little is known about the basic afective perception of Euro banknotes. Thus, in the present study we aim to assess diferences in valence, arousal and familiarity evaluations of banknote pictures (from 5 to 500€) by taking into account gender, socioeconomic status and Love of Money (LoM) score, which measures the subjective attitude toward money, in a sample of participants. We found that valence and arousal increase with the nominal value of the banknotes, and that the relationship between these afective scores and the nominal value appears to be logarithmic (Weber’s law) rather than linear. High value banknotes were evaluated as pleasant, highly arousing, and less familiar. Low value banknotes instead were evaluated as more familiar, less arousing and neutrally valenced. Finally, we found that valence and arousal evaluations are mainly infuenced by the LoM score of our participants. Instead, gender and economic condition infuenced only arousal scores. These fndings suggest the importance of deepening the study of these variables to shed light on money-related biases and abnormal economic behaviors.
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