Tenth anniversary of the euro celebrates ten years of inflation stability
In January 2012, it is ten years ago that euro coins and banknotes were introduced in twelve European countries. Throughout the past decade, inflation in the Netherlands and the eurozone has been stable and low. One of the main targets of the euro system is to guarantee price stability.
Dutch inflation (CPI)
Dutch inflation below 2 percent level since 2002
Dutch inflation averaged 1.89 percent over the period 2002-2011, the first euro decade. For the first time since the Second World War, the average inflation rate in the Netherlands has been below 2 percent for an uninterrupted period of ten years. In the period 1992-2001, the rate averaged 2.61 percent.
Dutch inflation has been low and stable since 1983. The peak rate of 4.5 percent in 2001 was partly caused by the fact that the VAT and various other taxes were raised and gas, electricity and food prices went up. Inflation was lowest around 987, due to lower prices for food, clothing and, notably, energy.
Inflation in several euro countries (HICP)
Eurozone inflation rate averages 2.08 percent
The monetary policy of the European Central Bank (ECB) covers the entire eurozone. The ECB seeks to keep inflation below and close to 2 percent in the medium-term. The average inflation rate (according to the HICP) over the first euro decade was 2.08 percent; hence the ECB target was met. The average annual inflation rate over the same period varied between 0.3 and 3.3 percent.
The three best performing countries during the first euro decade were Germany, Finland and the Netherlands with average annual inflation rates of 1.68, 1.76 and 1.88 percent respectively. In France, Austria and Ireland, the average inflation rate was also below 2 percent. The highest average inflation rates were recorded in Greece, Spain and Luxembourg. With 3.36 percent over the first euro decade, Greece was the only country in the European Union to have an average annual inflation rate above the 3 percent level.
Jan Walschots