5 Euro (Madame Butterfly) – Italy

In 2004, Italy was a full member of the Eurozone, having adopted the euro as its physical currency in 2002. The period was characterized by the ongoing adjustment to the single currency, which had replaced the historic Italian lira. While the transition was largely complete in daily transactions, a psychological and economic adjustment was still underway. Consumers and businesses continued to mentally convert prices back to lire, often perceiving the new currency as having caused significant price increases, a phenomenon widely referred to as "lira illusion" or perceived "euro-inflation." This sentiment was particularly strong in Italy, where the rounding-up of prices during the cash changeover was believed to have fueled inflation more than in other member states.

Economically, Italy faced significant challenges under the constraints of the Eurozone's Stability and Growth Pact. The country struggled with low economic growth, high public debt (exceeding 100% of GDP), and persistent concerns over its loss of monetary policy sovereignty. The inability to devalue its own currency or set independent interest rates highlighted structural weaknesses in the Italian economy, including rigid labor markets and sluggish productivity growth. The euro's strength in this period also put pressure on Italy's export-oriented manufacturing sectors, such as textiles and machinery, which were now competing globally without the tool of a flexible exchange rate.

Politically, the currency situation was a point of contention. The center-right government of Prime Minister Silvio Berlusconi, while officially pro-European, occasionally faced internal pressure from factions and coalition partners like the Lega Nord, which was more eurosceptic and sometimes nostalgically referenced the lira. However, there was no serious political movement to leave the euro. The broader consensus remained that, despite the short-term pains of adjustment and the loss of traditional economic levers, euro membership was irreversible and essential for Italy's place at the core of European integration and financial stability. The focus in 2004 was therefore on the difficult domestic reforms required to thrive within the single currency's fixed framework.