Euro zone welcomes 18th member and counting

Hundreds of thousands of Ukrainians huddled in the cold, windswept squares of Kiev demanding a European future for themselves and their children: an amazing visual representation of the continued attraction of the European model.

The EU may have taken a serious knock from the financial crisis and many of its citizens may still not be back on their feet, but, for those thinking strategically, the benefits of regional integration stand as clearly in Europe today as they do in the Philippines and in ASEAN as a whole. The message was not lost on Croatia, the 28th member of the EU from July 2013.

As premature obituaries for the euro were being drafted, several countries continued to press ahead with their preparations to join the currency. Columnists and economists had underestimated the solid political will underpinning the currency and its central role in the world’s largest single market that meant it would ultimately weather the storm and speculation. Estonia looked beyond the fog of the crisis entering the Euro zone in the middle of the turmoil in 2011. Just a few days ago on January 1st 2014 fellow Baltic state, Latvia, became the 18th country to adopt the Euro, the world’s second reserve currency.

The existential crisis of the euro now firmly in the past, the Euro gained 4.5% against the dollar in 2013 (1.38 $ for 1 Euro), its best showing in years. While clear that unfinished business remains in the construction of the Euro, Europe’s leaders have made important progress in setting things right, not by unpicking what was already in place, but by taking bold steps to further integrate the Euro zone economies.

In December 2013, European Ministers of Finance reached a landmark agreement that will bring the largest banks under a single supervisor. Decisions were taken to ensure that banks would not be bailed out by taxpayer’s money but by a fund levied on banks. New structures are being put in place to close failing banks without undermining the financial health of entire countries at the expense of the average citizen.

The financial prospects of countries the worst hit show surprising improvements: Greece registered its first budget surplus in decades, the rating agency S&P raised Spain’s outlook from “negative” to “stable” while impressive Ireland became the first country to exit the bailout programme and regain access to international financial markets.

Growth in the strength and span of the Euro currency has many advantages also for the Philippines. As Filipinos travel to Euro zone countries (and many do either for pleasure or for business), they do not need to change money in each country nor from country to country. The existence of the Euro zone makes European travel very attractive especially as Filipinos like to visit more than one country when in Europe. Filipino overseas workers living in one Euro zone country can send money to family or friends living in another Euro zone country without charges (through bank accounts in Euros). Finally and most importantly, Filipino companies exporting their products to the Euro zone have access to a market of 330 million customers with the same currency and the same standards.

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 (Guy Ledoux is the Ambassador of the European Union.)