top of page

Erasmus and the Euro

Source: Unsplash


Europe is a continent inhabited by close to 800 million people, living in states with different cultures and traditions, languages and histories. Many of these countries are, however, bound together by what can be considered as the modern, liberal values of freedom and equality, and united in their pursuit and defence both through NATO and through the European Union.

To make one out of many, however, some elements are needed. Such elements include two key parts of modern-day Europe: the Euro and what was originally the Erasmus programme and is now Erasmus+.

Both were born out of a need to create a stronger, more stable, more united Europe, one where transactions between people from opposite ends of the continent would need no change of currency, and where debate and education could be fostered by a supra-national programme of student mobility. Yet, although the two were from similar needs, they are wildly different, both in what they do and in the way they are perceived.

The Euro is Europe’s common currency. Having initially taken the place of the currencies of some member states in 2001, it serves as the main unifier of Europe’s economy, and allows the so-called Eurozone, the collection of countries that have adopted the common currency, to share a single, overarching monetary policy. Unfortunately, though, the fact that the Euro is the EU’s single most recognisable economic feature is precisely the reason why it has been subject to so much vitriol over the past years, as many countries of the Union faced a grave economic crisis.

On the other hand, Erasmus was born well before the Euro, and the fact that it is not distinctly economic in nature (although, as we shall see, it has a variety of economic implications) has spared it from much anti-European sentiment. Indeed, Erasmus was and still is, focused on education and training, allowing young Europeans from around the Union to move to other Union countries to pursue their education or take part in traineeships while enjoying the benefits of being citizens of a (almost) continent-wide union of Nations.

​​Right to education: state or international matter?

Free mobility and cooperation may not be concepts that completely translate into our current reality, but their relevance in the Continent has kept increasing since the introduction of the European system.

The desire of a French student to further her education in Belgium took the form of a legal case (the Gravier case, 1985), which pushed the European Court of Justice to make a decision on whether education should be internationalized or not.

By ruling out that differences in fees based on nationality would consist in an act of discrimination, the political debate intensified. This allowed for popular support to grow, and consequently, in 1987, the Erasmus program came to existence.

Each year, billions of Euros allow for thousands of students to experience three to twelve months abroad studying in another Member State.

Mamma Erasmus

What created the conditions that made all this possible is the misfortune of Sofia Corradi, who at the time was a student at La Sapienza University. In 1957, she won a scholarship that allowed her to study a whole year at Columbia University, New York. When she got back home in 1958, her university did not recognize the achievements she obtained while “traveling around the world”, and she was forced to take the last three exams she needed in order to become Doctor of Law.

Despite what happened, Corradi understood the importance and the implications of spending a period of time abroad.

By working as a scientific consultant, she expressed her vision to all the current Italian rectors, influencing the opinion of the academic world.

Her will to live in a reality in which people could freely travel around the world to study and improve as human beings made her obtain the title of “Mamma Erasmus”.

Multiculturalism a European attitude

The rationale behind such an intensive investment of resources is the creation of a European Identity: through a constant interaction between individuals of different countries, knowledge and cultures are permitted to freely travel throughout the Union, thus promoting common understanding and a sense of unity.

It is not by chance that this program focuses on the coexistence of different realities rather than the creation of a homogeneous new identity. Europe finds its roots in ancient history. Through the centuries the interaction between European countries shaped the world, both politically and geographically. There, despite continuous conflicts and interstate wars, multiculturalism allowed for civilizations to develop, and for knowledge to be discovered and created.

All political leaders acknowledge the importance that cultural heterogeneity has played in our history. Homogeneity is a characteristic that does not properly represent our Past, and that it is bound not to represent our future either.

A European Identity deprived of such heterogeneity is doomed to collapse over itself.

What follows

After having given 9 million people the possibility to study in a foreign state, the Erasmus program has been succeeded by Erasmus+.

Instead of just focusing on the realm of higher education, this new program also concerns traineeship in foreign companies, and eligibility has been expanded to comprehend young workers and volunteers as well.

The lead-up to the creation of the Euro

The EU of today is different from the one of years past, and that is definitely the case when we compare today’s European Union with its progenitor, the EEC or European Economic Community. The EEC was born of the need to allow Western-European countries to develop faster and regain the economic prosperity the Second World War had taken from them. As a consequence, the European Common Market was set up, based on the free movement of goods, people, services and capital.

However, the ECM faced the challenge of having to ensure competitiveness, fairness and most importantly stability, given that the EEC was not a country but an organisation formed by countries. The solution to the problem was simple in theory but difficult in practice: create a common fiscal and monetary policy.

Although the first has not yet been achieved to this day, a lot of progress has since been made on the latter, starting in 1979 with the creation of the EMS (European Monetary System) and the European Currency Unit, and leading to what we have today,

The EMS: why it failed

The system formed by the EMS and ECU was different from a common European currency because it still allowed for different national currencies to exist and change in value. What it did, however, was provide some stability, at least at the beginning.

The EMS meant that all EEC currencies would be pegged to the value of the ECU (which would be calculated based on a currency basket including the currencies of all member states partaking in the EMS), but would be allowed to fluctuate within a given interval (in theory ±2.25%, but some currencies such as the Italian Lira and the Pound Sterling would be allowed to do so within a ±6% interval).

Although the EMS succeeded in providing a certain degree of stability, it had fatal flaws. Firstly, it started a pattern of German economic dominance in Europe as the Mark was the most important currency in the basket and as it emerged as its de-facto anchor. Secondly, it forced exchange rates regardless of market value to a certain extent. Finally and most importantly, there was no real requirement for states to keep in line and harmonise policies to ensure respect of the system’s fluctuation bands.

As Europe entered into the 1990s and the geopolitical and economic environment shifted dramatically, the EMS’ flaws meant it had to change the fluctuation bands from ±2.25% to ±15%, eventually leading to its fall.

Europe had to correct the mistakes of the past, and the shift to a common currency would now be a reality. Starting in 1999 and ending in 2001, most of the EU’s countries phased out their national currencies in favour of the Euro. Today, the Euro has been adopted by 19 countries out of 27 EU member states, with all of the remaining 8 having pledged to join in the future.

The economic consequences

From an economic point of view, this enhances the movement of people and goods thanks to lower mobility costs. By creating a single interconnected labor market, workers get to find new employment opportunities in foreign countries, thus improving life conditions on average.

Individuals that take part in the program are not as vulnerable to long-term unemployment, and are less probable to become discouraged workers.

This happens as employers look for skills (problem-solving, tolerance, adaptability, confidence, and autonomy) that are believed to be gained by spending a period of time in a totally different environment than the one people are used to. Erasmus thus acts also as a counter to the severe youth unemployment that plagues today’s society.

What next?

The Europe of today has been shaped by centuries of conflict and contrast between Nations. Its political systems and its borders are at least in part the progeny of the great tragedies of the First and Second World Wars, and the same can, and must, be said of Europe’s present-day economic arrangements.

Europe’s need to reconstruct after World War Two led to the creation of the European Economic Community, the European Single Market, and, eventually, Erasmus and the Euro. It took a long while to get here, but we did.

In spite of the many challenges the continent has had to face, it has always reacted defiantly, growing richer and stronger in the process. Today, with many countries still suffering from the aftermath of the 2008 Financial Crisis and 2012 Sovereign Debt Crisis, and with the Covid pandemic forcing the economy to a halt in many parts of the continent, we can look at the future with a positive attitude, for we already have the main instruments of rebirth.

While our forefathers had to create the EEC, we already have the EU and Erasmus. It is up to us to utilise them in the best way possible, to foster growth and ensure a better, freer future for Europe.


Recent Posts
bottom of page