Euro - Cash Introduction: Loadsamoney

January 1 will be a new landmark for European integration with the introduction of euro coins and notes in the twelve countries which share the currency. After being a financial means of exchange for two years, it is finally to become a real and tangible currency and the sole unit of account across the region. This event is of unprecedented magnitude in terms of challenges, risks and benefits. Of these, the most important is connected to the struggling euro exchange rate.

The World Today Published 1 December 2001 Updated 26 October 2020 4 minute READ

Nicolai Peitersen

Managing Director, Kesera, a Danish think tank

The euro is undervalued in relation to other currencies although the Central European Bank has been largely successful in maintaining internal price stability in the zone with its two percent inflation target. Although several arguments have been put forward to explain this, no one looks at it from a legitimacy angle. In the end, weak public support for the euro does reveal concerns that are reflected in the financial markets.

The introduction of real cash might change this. Looking at the logistics of the operation, the European System of Central Banks is at present printing notes and minting coins worth roughly the staggering amount of $596 billion. These piles of money are being distributed across the region to the various national central banks, retail sectors and to business and corporate customers. Never before has such a volume of cash been withdrawn, issued and distributed.

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