Never a dull moment: 20 years of the euro

The centre of Frankfurt erupted with fireworks and cheers at the stroke of midnight back on Jan. 4, 1999 - as a common European currency was launched.

Now, almost a generation later, celebrations marking the 20th anniversary of the euro have been largely muted. For many young Europeans, the currencies it replaced like the franc, deutschmark, guilder and lira are learned about in history classes.

When introduced, the euro was first adopted by just 11 Member States; and widely considered a political as well as an economic decision. European Commission President Jean-Claude Juncker, one of the only signatories of the Maastricht Treaty still politically active today, remembered the "hard-fought and momentous negotiations on the launch of the Economic and Monetary Union."

CONSTANT TURMOIL

But the fights and battles had only just begun. Its fiercest critics charged abandoning age-old national currencies was a monumental mistake. Opponents said slapping a common currency on diverse economies with a single interest rate and different levels of productivity, disabled national governments from properly managing their own economies.

But, brushing aside reservations, new EU member countries adopted the euro, including Slovenia, Cyprus, Malta, Slovakia, Estonia, Latvia and Lithuania.

Its growth though, in many ways, was hamstrung by opposition, especially from Sweden, Denmark and Britain which all rejected it in favor of their own currencies.

Reservations were fuelled, to a certain degree, by financial crises in Italy, Cyprus, Ireland and Portugal, where the explosive combination of high borrowing costs, and moribund growth leading to strict austerity budgets.

But it was in Greece where the fragility of the currency was really demonstrated. In 2010, the EU and the International Monetary Fund were forced to bail out the debt-ridden country - Ironically, Greece was initially excluded from joining the euro in 1999 because of its weak economy.

Soon after the crisis in Greece; the euro plunged below 1.20 U.S. dollars.

Then, as if things couldn't get any worse, Spain's long-term interest rate rocketed above 7.6 percent in 2012, causing panic about the possibility of a euro collapse.

In that short amount of time, spectators viewed a continent and currency in perpetual disarray.

Many financial experts remained equally reserved about the success of the currency, given that for the best part of the last two decades, eurozone GDP growth per capita continued to lag behind Britain and the United States.

Troubles didn't end with Spain and Greece. In the summer of 2014, the currency surged to near 1.40 dollars, immediately hitting valued export markets. But, maintaining its unpredictability, it then plunged to 1.05 dollars - a drop linked to the purchase of assets by the European Central Bank to prop up the economy.

The following year - Athens sucked dry by austerity - was granted an unprecedented third bailout - a move designed to keep it in the single currency, despite some calls in Greece for a return to the drachma.

MIXED FEELINGS

The financial woes were epitomized by views about the currency, which swang from blind allegiance to blind hatred. Then of course, with growing economic disparities within the bloc, came the prospect of increasing hostility between member states.

But, despite almost constant challenges, the euro has been more resilient than anyone, including its proponents, could have dreamed.

Still, as 2019 opens, there are real and legitimate debates about its success and future. For Juncker, the financial foundation of the euro is stable; he maintains the currency has matured into a symbol of "unity, sovereignty and stability."

Whilst it is true that the euro is now a solid reserve currency, kept by central banks and the International Monetary Fund, reasons for concern remain, arising in no small measure from the looming exit of the United Kingdom from the EU.

Then, a shaky relationship between Italy and the European Union has caused jitters and threatening eurozone stability. Italy, which is the third-largest economy in the eurozone, has a rocketing deficit and has been embroiled in a drawn-out battle with Brussels over its latest budget.

There are other areas where the euro has been frustrated. The recent U.S. sanctions slapped on Iran highlighted how crude oil prices remain pegged to the dollar, meaning any attempt to circumvent the dollar as payment would be fraught with complications.

The European Union, which opposed the sanctions on Iran, has been exasperated with dollar's dominance in the oil trade. In fact, last September, Juncker bemoaned the absurdity of Europe paying 80 percent of its energy import bill in dollars, when only roughly 2 percent of the EU's energy imports come from the United States. He also lamented that it was, "absurd that European companies buy European planes in dollars instead of euro."

But, there is some succour for EU leaders as a recent Euro barometer survey suggests that 64 percent Europeans believe the introduction of the euro was a good idea, surprisingly, that figure is up from 51 percent in 2002.

Nowadays, the euro is used by 340 million Europeans in 20 EU member states, making it the second most used currency in the world.

But, for a currency which is now in adulthood, its teething troubles are certain to continue.