FRANKFURT, GERMANY -- — Ten years ago, Europe launched its grand experiment with a shared currency -- and watched it plunge in value before recovering.
But as the anniversary of the Jan. 1, 1999, arrival of the euro approaches, economists say the new currency is finally fulfilling its promise as a way to lower borrowing costs, ease trade and tourism, boost growth and strengthen the European community.
And doing it amid a global financial crisis underlines, for the moment, the safety in numbers that comes from joining one, big currency.
"After 10 years it has truly created a zone of security and stability," French Finance Minister Christine Lagarde said in mid-December. "From all these points of view, the euro has in fact proven wrong the forecasts some made against the euro 10 years ago."
When it was launched for noncash purposes in 1999, just 11 countries were on board -- Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain.
Notes and coins were added Jan. 1, 2002, and the original 11 have been joined by Cyprus, Greece, Malta and Slovenia, with Slovakia slated to join Jan. 1, bringing the total to 16. Now, some people in longtime holdouts such as Sweden and even strongly euro-skeptic Britain are beginning to reconsider the question.
Smaller countries have seen their currencies collapse in value and been forced to ask the International Monetary Fund for bailouts.
Otmar Issing, a former board member of the European Central Bank, said the euro's appeal has been its ability to provide a sense of stability and shelter from global crises. The bank, created specifically to oversee the euro, has taken a strong anti-inflationary stance that mirrors that of its chief predecessor, Germany's Bundesbank central bank.
"The euro is a stable currency; inflation expectations were under control right from the start," Issing said.
"Not surprisingly, quite a few observers -- with probably the majority of economists to the fore -- were more than skeptical as to the outcome of this experiment," he said.
The chief complaints from governments during the euro's first 10 years have arisen from the bank's one-size-fits-all interest rate policy, in which it can't give rate cuts to individual countries if their economy slows while those of others accelerate.
