Saturday, October 1

20 years of the euro: When a coffee cost 100 pesetas (60 cents)

There was a time when having a coffee in Spain did not even reach 100 pesetas (today’s 60 cents). 20 years ago to be precise, just when the euro, began to circulate on January 1, 2002, culminating in a process of monetary and economic union (UEM) in three phases that began on July 1, 1990. Today one can hardly drink a cup in a bar for less than double.

Those days, on New Years Eve from 2001 to 2002, it was still paid with pesetas. But the next day a new coin, of which each unit was equivalent to 166,386 pesetas, entered our lives to stay, along with the cents (the hundredth of the monetary unit), forgotten for years.

The normal thing is that there was a lot of expectation even for a holiday like New Year’s. “Don’t worry, there will be euros today, tomorrow, to the other and to the other,” Luis Berges, director of the Bank of Spain in Barcelona on January 1, 20 years ago, in front of the hundreds of people who stood in long queues outside the entity’s headquarters in Plaça de Catalunya. Time proved him right, but at that moment, the warning fell on deaf ears. Whether it was for the novelty or for fear of a shortage of bills and coins, people did not leave. The same happened in other branches of the Bank of Spain. It was an unprecedented change.

Euros every day and at all hours

“Don’t you see that we are living in a historic moment? We have the right to be attended to,” answered an angry lady who had been waiting since before eleven in the morning, when the bank and 900 other bank branches throughout Spain opened their doors. “I think they are confused. There will be euros every day. If they stay today they will end up eating at five in the afternoon,” he insisted. But no case.

In the end, before the avalanche of the public, the Bank of Spain had to close the doors an hour earlier than planned. This journalist, present at that event, attests to it. Reality prevailed and in a short time the situation normalized when it was verified that there were euros every day and at all hours. In fact, 50,000 million coins were minted and printed for the euro zone as a whole. 14,500 million banknotes, of which 10,000 million were already going to circulate throughout that January.

The same scene that in the Bank of Spain was experienced in the bank offices that opened their doors, with the limitation of 600 euros per client, to prevent them from hoarding. Most wanted much lower amounts, with a few exceptions of more anxious people who carried a sports bag or briefcase and, in these cases, had to go to the Bank of Spain. In any case, pesetas have been exchanged for euros until June 30, 2021.

The single currency has been, in essence, a success. Its implementation was rapid. At this time, the inflation has accumulated an increase of almost 50%. It is true that there are products that may even be cheaper but others are extremely more expensive: An example, the loaf of bread, with so much competition and types of products, any comparison is difficult. And the same happens with other goods and services, but overall, the rise in the shopping basket has been undeniable. Salaries, on the other hand, have risen by about 20 points less, around 30%, if the average salary is taken as a reference. That means they have lost purchasing power. The inflation of December 2021, shot up to 6.7%, contributes to widening this gap.


The biggest price jump occurred in 2002, with the famous Rounding and when products that cost 100 pesetas, overnight, went on to cost 166,386, the change of the peseta against the euro. An increase of more than 60%. From 100 pesetas to one euro without continuity solution. “A euro is easier than I do not know how many cents,” some excused themselves. Then, with prices with a higher starting point, the waters returned to their course and the peseta remained as a memory and a reference to calculate for those who have lived a good part of their existence with that currency.

Since the euro began to circulate in the streets until today, there have been three major crises. The first, which broke out in 2008, began in the real estate sector and spread throughout the economy. The second in 2010, punished the European debt. It originated from an external indebtedness of the private sector that led to a banking crisis.

Crisis and bailouts

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This turned into a fiscal crisis and, due to the failures in the economic governance of the euro zone, into a sovereign debt crisis, which led to the rescue of Greece, Ireland, Portugal and Cyprus and that forced Brussels to launch a lifeline of up to 100,000 million to Spain. And in 2020, the coronavirus crisis, which has meant the greatest collapse of gross domestic product (GDP) in peacetime.

Lessons have been drawn from all these situations and all have served to corroborate that, with its defects and shortcomings, the single currency and all that entails a commitment to interest rates and other variables, has served to cause the blows that have caused them there have been, they were smaller than they would have been without the euro, according to experts.

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