For flawlessly executing the largest monetary changeover in history
It could have easily turned into fiscal chaos. Instead, the rollout of the euro on 1 January 2002 happened with barely a hitch. After more than a decade of planning, 12 European countries made a seamless switch to what is now the second-most-used currency in the world.
Nearly 65 years after World War II ripped apart Europe and more than a decade before the dawn of digital transactions, the European Central Bank’s euro implementation marked the biggest currency changeover in history. Despite the grand scope, more than half of cash payments and 99 percent of ATMs had converted to euros within five days. And the project received immediate acclaim from those who mattered most: the 300 million eurozone residents. Nearly 9 in 10 residents said they were satisfied and adequately informed about the changeover, according to a 2002 EOS Gallup Europe survey.
“The launch has been described as the greatest exercise in logistics that Europe has known in peacetime,” says Antti Heinonen, then director of bank notes for the European Central Bank. “A smooth cash changeover could only be achieved in a short period of time by systematic and coordinated interaction on the part of all leading actors.”
Getting the initial supply of nearly 15 billion notes and 50 billion coins distributed and accepted across borders required nothing short of a marketing and communications blitz. Government officials as well as banking and retail professionals all acted as change agents in convincing residents to embrace the switch.
With a four-month head start on distribution, banks had about 80 percent of notes and more than 90 percent of coins in hand before the formal rollout, says Heinonen, who served as the lead project manager. In turn, banks were encouraged to redistribute euro currency to retail stores, restaurants and ATM vendors during peak holiday shopping season.
The proactive approach ensured “euro cash was in the right strategic places ready for the launch, without any major incidents,” he says.
The value of the currency rose immediately. The euro closed its first day at a value of US$1.17 and remains among the most stable currencies in the world. The wider benefit of the initial euro rollout has been in serving as the template for other cash changeovers around the world, including when other EU countries adopt the currency, Heinonen says.
“Several of the measures we took have had an impact on best practices in cash changeovers around the world. The most important lessons learned are involving stakeholders as early as possible and the appetite for applying innovative solutions with appropriate risk management measures.”
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