Otmar Issing, the former chief economist at the Bundesbank and the European Central Bank, still remembers vividly.

Back then, shortly after the introduction of euro cash, he tried to explain to people in a lecture hall that the new currency, which was quickly nicknamed the “Teuro”, was in fact just as stable as the D-Mark.

At the time, that was true: Even if a glass of wine in some bars suddenly cost as much in euros as it had previously in Deutschmarks, inflation overall was rather low.

"I noticed that the people in the audience just don't believe me," says Issing.

"And my wife was sitting in the front row - and I felt: my wife doesn't believe me either."

Christian Siedenbiedel

Editor in Business.

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Issing took this as an opportunity to later include a section on "perceived inflation" in his textbook "Introduction to Monetary Theory": The phenomenon that when prices for everyday goods rise sharply, the perception and official measurement of inflation can differ widely .

New book of the Bundesbank

Today, 20 years after the introduction of euro cash, the situation is different, as various experts explained at a Deutsche Bundesbank press conference on Monday in Frankfurt.

The Bundesbank is honoring the currency anniversary with a book “20 ​​years of the euro – on the future of our money”, published by Bundesbank board member Johannes Beermann.

The Frankfurt economics professor Volker Wieland spoke of the fact that after many years of inflation of around 2 percent since the start of monetary union, the euro is now in a “very difficult time” in terms of purchasing power.

Inflation in the euro zone was last at 9.1 percent, and a further increase is expected.

At the same time, the euro/dollar exchange rate was recently weaker than it had been for a long time.

Issing recalled that in the days of the Bundesbank, inflation of 4.5 percent after reunification was considered "unbearable".

And when the exchange rate of the euro, which started at 1.18 dollars, fell to 83 cents within two years, he always had to reassure his interlocutors abroad that this was only temporary - after all, the ECB ensures stable money.

"The current mix is ​​not an easy situation for the ECB," said Issing.

The credibility of the central bank is also threatened from this side: "It is not without risk for the ECB."

Skeptical about imminent end to inflation

Wieland emphasized that it was "not primarily the fault of the ECB" that inflation is now so high.

But it is their job now to prevent a self-reinforcing process of higher inflation expectations.

The United States is already further along, the ECB still has "a lot to prove".

Many now believed that a possible recession in winter would bring inflation down on its own, Wieland said: "I would be very skeptical about that." Experiences from the 1970s in the United States had shown that even a recession did not necessarily result in double-digit inflation rates prevent

"The euro is a reflection of the times," said Bundesbank board member Beermann.

He emphasized the great importance of euro cash even in times when it is used less in payment transactions but is in high demand as a store of value.

Antti Heinonen from Finland, one of the co-developers of the euro banknotes, even spoke of a “record demand” for cash in many currency areas.

The business psychologist Julia Pitters, who specializes in money issues, reported on a "cash stimulus" that activates certain reward centers in the brain - and has not been observed with other forms of payment so far: "People are becoming more goal-oriented - and more selfish."

Even with the introduction of the digital euro, the ECB will not abolish cash, Beermann assured.

From his point of view, Issing cited the scope for freedom that his possession opens up as a central argument for cash.

The former central bank chief economist once again quoted the author Leo Tolstoy: “Cash is coined – today one would rather say printed – freedom.”