Currencies of the European Union “The euro is a stabilizer of European peace”

A common currency stabilizes peace in Europe
A common currency stabilizes peace in Europe | Photo (detail): © EZB

On 1 January 2014, the euro will be introduced in Latvia. Many people in the country fear that, with this, part of the Latvian identity will be lost. What was it like in Germany? The historian Matthias von Hellfeld on the German stance towards the euro and the currency’s importance for the European Union.

Mr. von Hellfeld, since the introduction of the euro in Germany, the currency has on the one hand been looked upon as a rational means of creating a common economic area, and on the other hand has stirred up emotions and called forth scepticism. What reasons do you see for this?

In Germany the relinquishment of the D-Mark was a highly emotional event. The D-Mark had been very stable, brought much prosperity, generated many jobs. It ensured a standing in the world: the hard currency as an expression of hard work, great skill and industrial growth. The great scepticism about the euro was whether it possessed the same stability. And this was especially felt by the older generation who had already once experienced inflation and the utter devaluation of money. Similarly, citizens of the former GDR, who had to witness how the East-Mark came to be worth next to nothing abroad.

And for younger people?

Younger people and those to whom I also belonged were of the opinion that the only chance we have is a united Europe. The euro was the logical consequence. But this view wasn’t emotionally charged; it was simply rational: a common currency is the stabilizer of European peace.

No monetary union without political union

After twelve years’ experience with the euro, is a clear trend in the stance towards the currency emerging?

Yes, and it’s clearly a positive one. Because it has become clear to the Germans that the euro is stable; it hasn’t curtailed our prosperity. Of all the member states of the euro zone, Germany has got the most out of the euro; for instance, through the stable export situation. The negative factor which has been added to this is the experience that, because we all have the same currency, we have to pay for the budgetary difficulties and mistakes of other European countries. Hence the rise of euro-sceptical parties; hence many people saying: “This can’t go well; we’ve got to get out”.

Can we simply say: small countries suffer under the euro, big ones profit from it?

There’s something to that, especially as regards those countries which have joined recently and have had to undergo drastic economic reforms in order to conform to the criteria. Here I actually do see a weak point, because economic or monetary union without political union can’t guarantee that conditions are the same everywhere. The same taxes, the same charges, the same social benefits. And so long as they aren’t the same and centrally controlled, it will be relatively difficult to create the same living conditions everywhere in Europe.

A new Magna Carta

In your book Akte Europa (i.e., Dossier: Europe) you write that money has always been more than a measure of wealth. It has also always been a means of creating identity. What are the prospects of the euro as the engine for creating a European identity in the euro zone?

Eventually the euro will do it. Let’s look into the future and assume that the current difficulties have been surmounted. In all the euro zone countries there will be a reasonable level of employment and prosperity; then it will work. In the 1990s there was a discussion whether the new currency should be called the “euro franc”, alluding to the franc dinar, which already united Europe 1,200 years ago. This was in Charlemagne’s empire, in which the six founding countries of Europe were “represented” – the Benelux countries, Germany, Italy and France, all of which had a common currency. Ultimately, it creates an identity when you can pay in one currency and compare what a pound of butter costs from southern France to Latvia.

Apart from the common currency, how does it look for the European Union as an engine of identity?

In English there’s the phrase “share Europe”, which means something like “live Europe together”. This creates identity especially among young people. Young Europeans, who were born after 1990, draw a blank on the Cold War or on a “hot” war. It’s useless telling them that the European Union is a peacekeeping factor in Europe. That’s true, but young people want to know what Europe can do for them. How will my life be better if I live in Europe? We need a sensible social charter that says to young people: Europe guarantees you a training place. It guarantees you social standards. Daniel Cohn-Bendit, who is Green MP in the European parliament, has coined the phrase: “get a new Magna Carta off the ground”. I can endorse that.

Europe’s great diversity

Together with Ulrich Beck and others, you have called for very concrete programmes such as a voluntary European Year …

Such programmes would help the growth of a European civil society. It will take a long time. We have to educate our children to speak fluent English; our schools have to teach them how we can further develop this continent and so together advance Europe’s great diversity. We have an extraordinary diversity of cultures and traditions. This exists nowhere else in the world.

Is then the integration of the Eastern European countries into the euro zone the crowning achievement of the European peace and economic project?

Exactly. If we look at the history of the German Federal Republic, we see that it has gone rather like the process of European unification. First we sought to achieve reconciliation with the West and with Israel. When that was done and we could live again in peace, we did the same with Eastern Europe. In exactly the same way, the course we are now taking with the whole of Europe naturally includes the integration of Eastern Europe. The Cold War and the Iron Curtain, however, have ensured that relics of an absurd and unnatural separation are still there in our heads. We have to free ourselves from this. Our children know nothing of these leftovers any more; they have no resentment. It’s therefore right now to include Eastern Europe.

Matthias von Hellfeld Matthias von Hellfeld | © Matthias von Hellfeld Matthias von Hellfeld, born in 1954, holds a PhD in history and is an historian, journalist and author of numerous historical and political books on the history of Germany and Europe, including “Akte Europa. Geschichte eines Kontinents” (dtv, 2007) (i.e., Dossier: Europe. History of a Continent) and “Wir Europäer” (Dietz Verlag J.H.W., 2008) (i.e., We Europeans). He is also the author of numerous contributions to TV and radio on historical subjects. Hellfeld is a lecturer in the OnlineRadio Master’s programme at the University of Halle/Wittenberg and for life-long learning at the Cologne Campus.