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Global Economy

That means the euro-dollar parity for the European economy

Europeans are grappling this week with something unthinkable just a few months ago: the euro is slipping toward parity with the US dollar. This means that 1 EUR equals 1 USD.

The last time the euro fell below the dollar was November 2002, when the single currency was still in its infancy. The euro gradually strengthened and has remained above the dollar ever since.

Consumers, businesses and governments have become accustomed to this financial status quo, which has endured through the worst of Europe's debt crisis.

But when Russia launched the invasion of Ukraine, a sudden economic shock turned norms on their head.

The euro began depreciating on February 24, a trend that accelerated in June amid growing fears that the Kremlin would move to completely halt gas supplies to the EU in retaliation for Western sanctions.

The two currencies were level until mid-July.

How will euro-dollar parity affect Europeans?

Euronews spoke to Maria Demertzis, Bruegel's interim director, to find out more about the implications of this momentous currency shift.

"The moment parity is reached, there's a sense that some kind of line has been crossed," Demertzis said. "It has a lot of symbolic value."

Watch the video above to see what euro-dollar parity means for you and the EU.

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