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Ten years ago, Europe launched its grand experiment with a shared currency - and watched it plunge in value before recovering.

But as the anniversary approaches of the Jan. 1, 1999, arrival of the euro, economists say the new currency is finally fulfilling its promise as a way to lower borrowing costs, ease trade and tourism, boost growth and strengthen the European community.

And doing it amid a global financial crisis that, for the moment, underlines the safety in numbers that comes from joining one, big currency.

"After 10 years it has truly created a zone of security and stability," French Finance Minister Christine Lagarde said in mid-December. "From all these points of view, the euro has in fact proven wrong the forecasts some made against the euro 10 years ago."

When it was launched for non-cash purposes in 1999, just 11 countries were on board - Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. Notes and coins were added on Jan. 1, 2002, and the original 11 have been joined by Cyprus, Greece, Malta and Slovenia, with Slovakia slated to join on Jan. 1, bringing the total to 16. Now, some people in longtime holdouts such as Sweden and even strongly euro-skeptic Britain are beginning to reconsider the question.

Smaller countries have seen their currencies collapse in value and been forced to ask the International Monetary Fund for bailouts.

Otmar Issing, a former board member of the European Central Bank, said the euro's appeal has been its ability to provide a sense of stability and shelter from the storm of global crises. The bank, created specifically to oversee the euro, has taken a strong anti-inflationary stance that mirrors that of its chief predecessor, Germany's Bundesbank central bank.

Unemployment in the 15 nations that share the euro shot up to 7.7 percent in October - the highest level in two years - as growth dropped sharply, the EU statistics agency Eurostat said Friday.

Prices also plunged with the annual inflation rate sinking to 2.1 percent in November from 3.2 percent in October, Eurostat said. Lower inflation gives the European Central Bank more room to reduce interest rates, which would help stoke growth.

The euro area officially went into a recession in spring and summer this year when growth shrank in the second and third quarters, as a financial crisis curbed global demand.

In real terms, this means job losses - lots of them and more to come.

Eurostat said some 225,000 more people were seeking work in October from the previous month. That means some 12 million people in the euro area were out of work last month. It also said unemployment in September was worse than it had first estimated, revising the rate upward to 7.6 percent from the 7.5 percent it reported last month.

Across all the EU's 27 states, some 17 million people were job-hunting in October, 290,000 more than a month earlier. The EU jobless rate was 7.1 percent in October, up from 7 percent in September.

The EU's executive Commission forecasts that the labor market will get even worse next year, with the euro-zone rate climbing to 8.4 percent in 2009 from a decade-low of 7 percent at the end of 2007. This will see an extra 2 million people out of work.

The 15-nation region that uses the euro has met the technical definition, contracting in consecutive quarters for the first time in its brief history.

Government data confirmed what observers were hoping might, by some fortuitous circumstance, be avoided on Friday: the euro zone has officially entered its first-ever recession. The rub is that the contraction is expected to intensify in the near term.

Gross domestic product for the 15 nations that use the euro shrank by 0.2% in the third quarter, mirroring the 0.2% negative growth booked in the second quarter, technically putting the region into recession. The data come ahead of a G20 meeting in Washington, in which leaders of advanced nations will meet with their emerging market counterparts to discuss ways to stem the global financial crisis.

European heads of state are now scrambling to keep their economies from sliding even more steeply. Global Insight economist Howard Archer said the latest data and survey evidence indicated that the euro zone would probably see a sharper fall in GDP in the current quarter than in the third quarter. He added that "it will take time for sharply lower oil prices, the retreat of the euro, lower interest rates and fiscal stimulus in a number of countries to generate recovery."

Other economic data out from Europe on Friday showed that Italy had joined Germany in entering recession, while Spain's output had contracted and the Netherlands' was stagnating. One surprise was that France had managed to post a slight uptick in growth in the latest quarter, escaping a technical recession by a sliver. (See "Recession Misses France, Hits Italy.")

The weak data lend support to the view that the European Central Bank will cut interest rates further, after having trimmed by 50 basis points last Thursday, to take them to a two-year low of 3.25%. Many economists expect the central bank to cut by another 50 basis points in December and to ease to 2.0% by the end of the second quarter of 2009.

Europe's leading shares were in positive territory in late morning trading on Friday, tracking a strong rally on Wall Street Thursday and higher trading in Asia. But the euro fell against the dollar, buying $1.269, down from $1.2784 late Thursday in New York.

The most popular European government bond, the German bund, was being ditched by traders in droves on Friday. Yields on all major classes of debt securities, which move inversely with their prices, were moving higher. The two-year bund yielded 2.29%, up from 2.26% on Thursday, while the 10-year yielded 3.75%, up from 3.71%.