The Euro Goes East1

Tommaso Padoa-Schioppa ()
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Tommaso Padoa-Schioppa: European Central Bank, Kaiserstrasse 29, 60311 Frankfurt, Germany.

Comparative Economic Studies, 2003, vol. 45, issue 3, 215-231

Abstract: A unique opportunity came with the advent of euro banknotes and coins on 1 January 2002 to gain first-hand evidence on the foreign circulation of the euro. Evidence collected on this occasion suggests that the euro has smoothly and successfully replaced the legacy currency banknotes circulating outside the euro area, notably the Deutsche Mark. A large proportion thereof were indeed converted into euro banknotes in the wake of the cash changeover. In eastern Europe, interestingly, a significant share of the legacy currency banknotes were also deposited in euro-denominated accounts. Hence, in this region, the euro circulates increasingly in scriptural form. Overall, the role of the euro as a parallel currency in eastern Europe reflects strong financial, economic and institutional links with the euro area, which are likely to become even stronger in the future. Comparative Economic Studies (2003) 45, 215–231. doi:10.1057/palgrave.ces.8100016

Date: 2003
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