Opening of the Euro Banknote Design Exhibition

Speech by Lucas Papademos, Vice President of the ECB, Athens, 11 August 2004

“What if?” This type of question, usually asked by enthusiasts of counterfactual history, has always been very intriguing. Your presence here today, at the opening of the Euro Banknote Design Exhibition, reveals your curiosity about the answer to a very specific “what if” question: what if a different banknote design had been chosen for our new common currency? What would the euro banknotes have looked like? Unlike many of the investigations into counterfactual history, this question does have a definite answer – it is on display here.

Choosing the design of the euro banknotes was a process of – dare I say – historic dimensions. And I had the great privilege of being closely involved in it. The euro banknotes are used by more than 300 million citizens in the twelve countries of the euro area today. They are also used elsewhere, mainly in the neighbouring countries of the euro area, as we know from our shipments of euro banknotes in the run-up to the cash changeover. In the not too distant future they will also be used as the official medium of exchange in the new Member States of the European Union, once we have welcomed them into the euro area.

It looks as though we made a good choice: the enthusiasm with which Europeans citizens accepted their new banknotes and coins in early 2002 is a clear indication of their appreciation and approval. We conducted a survey shortly after the cash changeover, which revealed that about two-thirds of those asked found the euro banknotes attractive. Another survey, conducted by the European Commission in November 2002, revealed that more than 90% of respondents considered the euro banknotes to be easy to distinguish and handle.

The process of getting the seven euro banknotes from the drawing board into people’s wallets took many years of careful planning. Allow me to recall some of the developments that led to the elaboration of the many different design proposals which you see on display today.

As early as November 1994, the Council of the European Monetary Institute (EMI), the forerunner of the European Central Bank (ECB), asked the Banknote Working Group of the EMI, comprising specialists from all EU national central banks, to make proposals for design themes for the European banknote series. To fulfil this mandate, the Banknote Working Group worked in conjunction with an external advisory body, the Theme Selection Advisory Group, which was composed of experts in art history, psychology and design. Mrs Mary Michaelidou, art historian and Director General of the Ministry of Culture, represented the Bank of Greece in this Group.

The actual design of the euro banknotes was a creative challenge, especially as the designer’s artistic freedom was constrained in a number of ways.

First, there were requirements of a technical nature:

Second, there were requirements of a substantive nature:

Within that framework, the Theme Selection Advisory Group recommended 18 themes to the EMI Council, of which two were chosen in June 1995. The first theme, “Ages and styles of Europe”, envisaged the depiction of portraits of certain non-identifiable personalities that represented a certain period in time (“age”) on one side of the banknote and of architectural styles on the other side. In this way, it emphasised the common cultural heritage of European nations. The second theme, “Abstract/Modern Design” foresaw geometric shapes or non-figurative design elements which allowed for a high degree of design flexibility and an easy incorporation of security features.

Following the decision on the two banknote themes, the EMI Council launched a euro banknote design competition in early 1996. The designers and design teams were nominated by the EU central banks, except for Danmarks Nationalbank, which did not want to prejudice any future decision to join the euro area by its participation in the banknote design competition. All participants had experience of banknote design and were familiar with the challenge of combining attractive designs with efficient security features.

The designers were asked to submit draft design series for one or both themes within a period of seven months. In the end, 27 proposals for the “ages and styles of Europe” theme and 17 proposals for the “modern” theme were submitted by 29 designers or design teams. The design competition was organised on an anonymous basis, in order to guarantee the objectivity of the selection process and avoid any national bias.

In September 1996 a jury composed of independent experts in marketing, design and art history met under the aegis of the EMI in order to select the five best designs for each theme. The principal criteria for appraising the designs were creativity, aesthetics, style, functionality, likely public perception and the degree of acceptance by European citizens. The jury agreed that the latter requirement, that is, ensuring that the banknotes had a European look, was of paramount importance. In order to narrow down the field of competitors, it was agreed that, from the 44 designs submitted, a shortlist of ten designs would be established on the basis of a three-step procedure in which design series that were not supported by a minimum number of jury members would be discarded. Thereafter, the ten remaining designs would be submitted to the public in the 14 EU Member States concerned for an opinion poll involving around 2000 individuals. Two groups – professional cash handlers and ordinary members of the public – were interviewed on the basis of a detailed questionnaire relating to their perception and acceptance of the shortlisted banknote designs.

In parallel with the public survey, the EMI’s Banknote Working Group checked the draft designs on the basis of additional, more technical criteria, such as their ease of production or their ability to incorporate the various security devices. It was concluded that, after some modifications, all shortlisted draft design series were, in principle, “fit” to become printed banknotes.

Finally, in early December 1996, colour copies of all 44 designs were presented, on an anonymous basis, to the EMI Council for a final decision. In forming their judgement, the Governors had at their disposal the information about the jury’s ranking, the results of the public survey and the technical comments of the Banknote Working Group.

When looking at the different exhibits in this hall, you will get an idea of the task faced by the EMI Council at the moment of decision: to select one winner from among all of the designs, many of which were interesting, innovative and aesthetically attractive.

At the end of your visit to the exhibition, you may come to the same conclusion the EMI Council did back in 1996: that the design series by Robert Kalina, inspired by the “Ages and styles of Europe” theme, is a very striking design concept indeed. It is rich in symbolism through the use of gateways and bridges. It is clearly recognisable as European in its use of the map of Europe. It excels in its interesting and meaningful selection of different architectural styles – classical, Romanesque, Gothic, Renaissance, Baroque and Rococo, 19th century iron and glass architecture and modern 20th century architecture. Its skilful use of large, bold numerals and a range of different colours makes it easy to distinguish between the different denominations. It was for these and other reasons that the EMI Council selected the design by Robert Kalina, a banknote designer at the Oesterreichische Nationalbank in Vienna.

There is, I suppose, no need to explain in great detail the features of the winning design, because by now we are all familiar with it, though some high-denomination banknotes probably pass through our hands less frequently. It may, however, be worth taking a particularly close look at the design of the €500 banknote, for it reveals that Robert Kalina was also a man of great foresight: on one side the €500 banknote depicts a very modern bridge that he had not previously seen – the Rio-Antirio Bridge, which will be officially inaugurated tomorrow.

Following the EMI Council’s decision, the winning design was shown to the Heads of State and Government at the European Council in Dublin in December 1996. At the same time, the whole world was able to catch a first glimpse of the new euro banknote at press conferences held by Alexandre Lamfalussy and Willem Duisenberg.

Selecting the best design for the euro banknotes was, of course, only the first step towards their creation. Further work had to be done to transform the designs into high-precision banknotes for large-scale production. This meant very close cooperation between Robert Kalina and our banknote experts, and later on between the ECB, the EU national central banks and the 15 printing works involved. The timely completion of the production of the more than 15 billion banknotes needed for the euro cash changeover bears witness to the success of this cooperation.

With the introduction of the euro banknotes and coins, the single currency became a visible and tangible element of our daily lives. And since money is probably one of the most powerful symbols of a common identity, the euro has the potential to inspire – or reinforce – a true sentiment of togetherness among European citizens. After all, with the introduction of the euro in its physical form, the process of European monetary integration has been completed and become irreversible.

Participation in European Monetary Union and a zone of monetary stability is undoubtedly bringing economic benefits to businesses and consumers alike. At the same time, this participation implies certain constraints on the functioning of the economies of the euro area Member States and on the conduct of their national economic policies. I do not wish at this time to dwell on these important issues extensively, but allow me to conclude by briefly making a number of pertinent remarks.

Let me first state the obvious, which should, however, be emphasised. The monetary policy of the ECB is geared towards maintaining price stability over the medium term in the euro area as a whole. By maintaining price stability in the euro area, the ECB is ensuring that the euro keeps its purchasing power and retains the trust of Europe’s citizens. However, inflation rates in the different countries of the euro area may diverge from the average as a result of a variety of factors, such as the existence of country-specific shocks, the stance of national economic policies and structural features of the national economies, which determine the functioning of labour, goods and services markets. The single monetary policy cannot, and therefore does not, seek to address specific economic developments in individual Member States of the euro area. Consequently, national policies may be needed to prevent unfavourable and persistent inflation or output growth differentials.

It is in the hands of national governments to enhance the performance of their economies within the euro area – including their inflation performance – by pursuing sound fiscal policies and implementing the necessary structural reforms to improve market efficiency and flexibility so that the national economies can adjust smoothly and effectively to changing economic conditions and external shocks. Such reforms are also essential in order to strengthen the international competitiveness of the national economy, which could be undermined when inflation persists at a high level that is not compatible with price stability. A substantial and permanent erosion of competitiveness will adversely affect a Member State’s output and employment and will also negatively influence public acceptance and support for the common currency.

The value of all fiduciary money is based on trust. After all, our banknotes are only pieces of printed paper – beautifully designed paper of great sophistication, as you can see in this exhibition, but simply printed paper nonetheless. The confidence which the public places in a currency is not only based on their faith in the security features, integrity and quality of the banknotes (and coins) in their wallets. More importantly, it is based on trust in the currency’s institutional and economic underpinnings: the objectives and effectiveness of the monetary policy, the provisions of the monetary constitution and the broader economic policy framework. This observation is especially true of supranational money such as ours.

In this sense – and with this I will close – our common currency, whose creation has inspired the many attractive designs that are on display here today, also stands for a lasting commitment to sound economic policies, so that the citizens of Europe can continue to place their trust in “the euro, our money”.

Thank you very much for your attention.