Dubai: The common European currency was the biggest project of the EU ever, since it was introduced on January 1, 2002. It is now used in 16 EU member states and acts as legal tender for some 327 million people. Over 175 million people worldwide use currencies which are pegged to the euro, including more than 150 million people in Africa.

The euro has established itself as the second most traded currency after the dollar, substantiating the power of the world's second largest economy, the Eurozone.

Does this mean the monetary union in Europe was a success from the very beginning?

Frankly speaking, the move to abolish long-established currencies in big economies such as Germany, France or Italy wasn't a simple task and was met with great wariness by many Europeans. Apart from the necessary accustomisation to the new currency, the first impact of the euro was a price rise.

Price hike

More or less overnight, prices went up for a variety of goods and services, from cinema tickets and hair salons to groceries and taxi fares. It was not a random practice — nearly all businesses used the new currency to round up their prices.

One of the fiercest critics of the euro at that time, Swiss economist Kurt Schiltknecht, said the countries that benefited most from the common currency were those with the least stable economies in the euro zone such as Greece, Portugal, Italy and Spain.

"Those countries suddenly enjoyed lower interest rates for their public debts, while countries with stable economies like Germany had to pay higher rates which caused a range of problems for them."

Schiltknecht also points out that the European Central Bank plays an ambivalent role as a centralised authority for euro zone member states. The ECB bases its price stability targets on the average inflation rate within the euro zone and mostly does not consider the individual economic condition of single countries. That makes it easy for governments to blame the ECB for occurring problems.

Advantages

All in all, almost eight years after the euro was introduced, the majority of people in the euro zone have learned to live with it. Of course, there are plenty of advantages of a single currency: price volatility within the euro zone has almost vanished, and trade within the member countries is no longer exposed to currency fluctuations. This improves transparency and reduces costs for manufacturers and services, and creates more competition.

For individual citizens, the most obvious advantage was that they were no longer forced to use different currencies in Europe, which made inter-European payments and travel much easier and definitely cheaper.

Last but not least, the euro proved its stability during the global financial crisis, a period during which many critics of the unified currency remained silent and countries that have not yet adopted the euro, such as Denmark, Sweden and even Great Britain, are now considering it, besides non-EU-members like Switzerland and Iceland.