Instead, we met those challenges head on and answered them together. And it was this same spirit that made – from the late 1980s onwards – the single currency a necessary next step on our European journey. At that time, both Europe and the world were changing. First, our common market was evolving into the Single Market.
This made it even more important to remove the prospect of competitive devaluations among major economies, since that would have undermined trust and turned the tide against openness. But with global capital flows multiplying, Europe's fixed exchange rate system was becoming increasingly unstable – a problem epitomised by the exchange rate mechanism crisis in 1992-93.