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Why the Euro? From Concept to Currency

The ‘Endless Euro Crisis’ drags on with another inconclusive meeting in Rome, where Eurozone leaders vowed Friday to defend the Euro with ‘all means necessary’, but with absolutely no agreement on what ‘all means’ actually means. We thought it was a good time to reflect on why the Euro even exists and how it came into existence with a quick episode that speeds you through the history and background of the Euro in less than 5 minutes. Click ‘CC’ for captions. For full video transcript click on ‘Continue Reading’.

***CLICK ‘CC’ ON VIDEO WINDOW  FOR ENGLISH LANGUAGE CAPTIONS***

The ‘Endless Euro Crisis’ drags on with another inconclusive meeting in Rome, where Eurozone leaders vowed Friday to defend the Euro with ‘all means necessary’, but with absolutely no agreement on what ‘all means’ actually means. Consensus is quickly growing that in order for the Euro to survive, either the smaller member countries will have to start leaving the Eurozone, or Europe will effectively have to become one country.

Whilst the potential death of the Euro doesn’t now seem quite so imminent given the recent formation of a new coalition government in Greece, we thought it would nevertheless be timely and relevant to put things in context and provide you with a quick look at the birth of this currency, why the Euro exists and how it came about in the first place with a quick FAST-FORWARD episode that speeds you through the history and background of the Euro starting with Winston Churchill’s vision of a United States of Europe, in less than 5 minutes.
We’ve assembled a few poignant clips cut from a full one hour BBC broadcast presented by Robert Peston which originally aired in the UK on Thu 17 May 2012.  A full transcript follows below.  Send us your comments.

VIDEO TRANSCRIPT:

Scott Arnell: I’m Scott Arnell and you’re watching Fast Forward on GenevaRoadShow.TV.  On Fast Forward we try to bring you a very quick high level overview of a current topic.  Today we’re talking about the Euro.   I just came back from a couple of weeks in Asia and many of the people that I spoke with feel like they’re helplessly watching a slow-motion train wreck here in Europe relative to what’s going on with the Euro.  It also became clear to me that many of the people I spoke with didn’t really understand how the Euro came about – probably because they’re younger than me.   A LOT younger.  So in this episode we’ve cut together a few short bits from a BBC presentation about the Euro made a couple of weeks ago in the UK presented by Robert Peston.

David Marsh: Three times great conflicts had erupted from French and German soil. And the idea was after the war that this should never happen again. And money as well as trade and political rapprochement they were all keys to that particular door. Winston Churchill was clearly very keen that France and Germany should come together and no longer cause a problem for everybody else.

Winston Churchill: This is not a movement of parties, but a movement of people. Europe can only be united by the heartfelt wish and vehement expression of the great majority of all the people of all the parties in all the freedom-loving countries. No matter where they dwell or how they vote.

Robert Peston: Churchill was a promoter of the United States of Europe, though with Britain on the outside. The UK wasn’t one of the European pioneers which signed the Treaty of Rome in 1957. At the heart of the new European Community stood the historic enemies: West Germany and France together with Italy, The Netherlands, Belgium, and Luxembourg. As these countries removed barriers to trade, the idea of a single European currency was always in the background but made explicit in the late 1960s.

In 1981 François Mitterrand was elected president of France.

Elisabeth Guigou: During the war, he had been a prisoner in Germany and he escaped three times. Each time he met Germans who helped him. Afterwards he became obsessed with the idea that there should never be another war and that Europe should unite.

Robert Peston: A year later Helmut Kohl became Chancellor of West Germany.

Prof. Hanns Jurgen Kusters: Kohl grew up only a few kilometers from the French border. As a youth he lived through the second world war. He lost a brother during that time. He believed that there should never again be a war amongst the peoples of Europe.

Lord Lamont: Kohl, because of the history of Germany, wanted to anchor Germany into Europe to make war impossible. And Mitterrand had the same objective. And that is what the Euro, and the European Union to some extent, are all about.

David Marsh: The common vision was to have a single currency from the Atlantic maybe to the Urals that in some magical way would do everything.

Robert Peston: The end of communism brought down the Berlin wall and the face of Europe was about to change forever. But a unified Germany would be an even stronger Germany. When it became clear that the momentum towards German unification was unstoppable, the French president, François Mitterrand, needed a way of constraining German power.

David Marsh: The deal that was done, was that the Germans once unified would then do everything  they could to embark towards a single currency.

Robert Peston: For the French, monetary union was as much about politics, about the balance of power within Europe, as about economics. The idea was to strengthen the institutions of the European Union relative to member countries so that the growing power of Germany could be held in check.

Europe’s leaders assembled in a small Dutch town to agree a treaty that would shape and shake the continent.

David Marsh: It was an impossible dream that you could build a single European currency without a single European state. Everybody knew that it was a risk. Everybody knew that you were putting the cart before the horse.

Lord Lawson: You cannot have a monetary union that works without a fiscal union. It was arrogant because they thought that that way they could override the democratic veto and it was irresponsible because they didn’t say “Well this is a high risk project” and I think that was a gamble, if you like, which should never have been taken.

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