Irish Times Monday, December 31, 2001 (Should be: Monday, 2001 December 31)
Editorial: Out with the old in with the Euro The euro started its life three years ago, when the 12 member states locked their currencies irrevocably together and the new currency came into use for paper transactions. It is already having a significant impact on our economic fortunes. However for most of us the new currency will only become a reality tomorrow, when we will get our first chance to use the notes and coins. While pounds can still be used until February 9th - and will remain a mental point of reference for some time thereafter - it is likely that by the middle of January the vast bulk of our day-to-day transactions will be conducted in euro. Tomorrow is thus an important landmark - and the end of a process which has been championed by many of Europe's leaders over the past 30 years. The introduction of the euro - and the abandonment of national notes and coins - is a powerful symbol of closer EU integration; the new currency is already used by business and the financial markets, but now some 300 million people will be using it every day. The introduction of the euro notes and coins will have important consequences. People travelling from one euro zone state to another will no longer need to change their money - indeed early indications are that the euro will also be accepted in many shops in non euro zone areas, such as the North and in Britain. Consumers will be easily able to compare prices in different euro zone states, leading to additional competition. There are concerns that some will seek to take advantage of the changeover. The Office of the Director of Consumer Affairs has an important role in policing the changeover from the consumer viewpoint. The best response to those who do try to take advantage of consumers is clear - people should take their business elsewhere. The longer-term implications of the move to the euro are far-reaching. The initial goal of monetary union was monetary stability, where a strong currency would foster low interest rates. The performance of the euro on the financial markets, however, has been mixed and the European Central Bank (ECB) has struggled to build its credibility. It is now evident that the benefits of the euro can only be built in the long term - and that their emergence cannot be taken for granted. Success will depend not only on the ECB, but also on the economic management and performance of the member states. The move to the single currency also raises more fundamental issues. Already the challenges of setting interest rate policy are evident - both the ECB and the member states will have much to learn in the years ahead about economic management in a single currency area. Inevitably other issues - such as tax harmonisation - will also come onto the agenda. The advent of the euro is clearly a landmark in the development of the EU. It will throw other issues relating to the future of Europe into sharp focus, pointing to the need for the Government here to take a clear and coherent policy approach. For now, however, it is time to get ourselves accustomed to the new notes and coins, as the euro zone states take a most significant step . Brussels, Madrid plan noisy launch The ECB has predicted that the currency will appreciate against the dollar in the coming months, writes Denis Staunton, in Brussels The birth of the euro at midnight is set to be a low-key affair, with major celebrations planned in just three cities - Frankfurt, Brussels and Madrid. Outside the European Central Bank (ECB) headquarters in Frankfurt, a sculpture of the euro symbol will be illuminated. But the ECB president, Mr Wim Duisenberg, will not be there; he says he will mark the currency's birth "privately". The launch will be noisier in Brussels and Madrid, with firework displays that will also mark the handing over of the EU Presidency from Belgium to Spain. Throughout the 12 eurozone countries, however, tens of thousands of bank workers, technicians, police officers and soldiers will be working through the night to ensure that the currency's introduction goes smoothly. >From midnight, the 12 old currencies may only be used for payment - all change must be in euro. Cash machines will shut down around midnight to allow them to be loaded with euro notes. In Germany the Finance Ministry acknowledged yesterday that retailers will not be obliged to accept deutschmarks after midnight, although the currency will remain legal tender until February 28th. Credit-card companies are predicting a rise of up to 30 per cent in cash-free transactions as consumers become accustomed to the new notes and coins. And the delivery of huge sums of euro to banks and shops has prompted a security alert in many euro zone states. In France a strike by 40,000 bank officials and post office workers threatens to derail the launch, and politicians yesterday made last-minute pleas to unions to call off their industrial action. The Finance Minister, Mr Laurent Fabius, joined the former Commission president, Mr Jacques Delors, in calling on the unions to consider their responsibility for ensuring a successful launch. "The French are very well prepared for the euro. One must not ruin this with strikes," Mr Fabius said. Mr Duisenberg yesterday denied reports that Europol had discovered counterfeit euro already in circulation. To avoid counterfeiting, the ECB insisted that, although euro coins could be distributed early, notes should not be available to the public until January 1st. Belgium's Finance Minister, Mr Didier Reynders, criticised the decision to withhold the notes as excessively cautious and accused the ECB of treating the bank notes as if they were works of art. "The prudence of the governors again played a role on this point, but I think the ECB made a mistake. I still don't see why you can distribute coins and not notes," he said. Mr Duisenberg predicted that the euro, which he described as undervalued, would appreciate against the dollar in the coming months. "We always say that the exchange rate has to reflect the fundamental relations between areas, between countries. "At the moment Europe has a competitive advantage," he said. The euro lost 30 per cent of its value against the dollar between January 1999 and October 2000 and has hovered below $0.90 in recent months. Mr Duisenberg said he was optimistic about the prospects for the euro zone economy and predicted that the zone would avoid recession. "I think we may well have reached the trough. I expect a recovery in the course of 2002, though it will be slow. I see no recession," he said. The German Chancellor, Mr Gerhard Schr�der, acknowledged that some older Germans would mourn the passing of the mark, which many viewed as a symbol of economic stability. But he said the euro was as strong as the mark and predicted that Germans would enjoy even greater prosperity with the new currency. An opinion poll published yesterday suggests that Germans are increasingly enthusiastic about the euro and welcome the launch of notes and coins. The European Commissioner, Mr Neil Kinnock, said yesterday that the euro could become a parallel currency in Britain, and the British Prime Minister, Mr Blair, said Britain had a "massive interest" in the euro's success. Outside the euro zone, the euro will be an official currency or an acceptable means of payment in six French territories overseas and in Monaco, San Marino, the Vatican, Andorra, parts of Yugoslavia and Bosnia-Herzegovina. French island first to use new cash Residents of the French Indian Ocean island of Reunion will slip ahead of the rest of the euro zone tomorrow, using their three-hour lead on Paris to become the first to use euro cash. At midnight on December 31st, the first of roughly 304 million people in 12 countries will begin using euro notes in this tropical paradise. Two hours later, continental Europeans will join the parade in Finland and in Greece, followed by the bulk of the euro zone one hour later. Ireland and Portugal will conclude the operation after a further hour. - (AFP) Irish taking muted approach to E-day By Jane O'Sullivan Celebrations in the Republic to mark the launch of the euro seem set to be low-key compared to those of some of our euro zone neighbours. Athens boasts a "Euro Monument", a structure of 21,000 neon tubes placed in its central Syntagma Square, which will be lit to celebrate the euro's circulation. Meanwhile, the northern Italian city of Bologna is planning an unusual party to greet both the new year and the new currency. In the city's main square, home to one of the world's oldest universities, citizens traditionally burn a giant puppet known as "Il Vecchione" (the big old man), representing the year that's past. This year, though, Bologna will bid farewell to 2001 by burning a huge reproduction of Italy's retiring currency in the shape of a 100-lire coin. The Irish Central Bank, however, has no plans to bid a fond farewell to the punt by setting it on fire. Instead, the bank's governor, Mr Maurice O'Connell, will meet the chairman of the Euro Changeover Board of Ireland, Mr Philip Hamell, and the Minister for Finance, Mr McCreevy, today for a euro celebration event. The three will gather at 12.30 p.m. at St Stephen's Green in Dublin to join with the citizens of Dublin to celebrate the euro. "Happy Euro" cards, euro chocolates and pens will be handed out, along with information on the new currency. Tomorrow, the Taoiseach, Mr Ahern, plans a shopping trip to O'Neill's newsagents in his Drumcondra constituency to spend a few euro. But aside from that, it's just business as usual. Change will affect how we see ourselves The euro is the most visible sign of how far the process of European integration has progressed, writes Wim Duisenberg, the president of the European Central Bank. In just a few hours the 300 million citizens of the euro area will be able to spend the new euro bank notes and coins for the very first time. In just a few weeks more the deutschmark, the Greek drachma, the Spanish peseta, the French franc, the Italian lira and all the other currencies of the euro area countries will be withdrawn from circulation. The euro bank notes and coins which replace them will be legal tender throughout the whole euro area, which encompasses 12 countries and stretches from Lapland to Crete. This is a historic moment. The "old" bank notes and coins have not just been units of value or a means of exchange. For all of us, they have represented a part of our lives, our history, our cultures and our values. They have been symbols of national identity, and have also helped to forge that identity. Within national boundaries, they have strengthened the sense of belonging to a single community. Over the years they have borne the consequences - with varying fortune - of the economic policies and the political and social events of the respective countries. These bank notes and coins have become very familiar to us. It will certainly take some time before people get used to counting in euro, to assessing the relative value of goods in euro, and to paying and receiving amounts of money in euro. For quite some time many people will certainly keep a mental price list in their former national currency. This very natural fact might in itself cause some small inconveniences in the very first weeks of the new year. But they will be nothing more than just that, and they will be easily overcome with a little attention and patience. Replacing the national bank notes and coins with the new euro cash is not merely a technical act that will affect us only on a practical level. It will also influence the way we perceive ourselves within a community, the way we regard our history and the way we relate to our neighbours and our territory. It will deeply affect the way we see ourselves as Europeans, thereby fostering the process of integration and contributing to the achievement of lasting peace and prosperity throughout Europe. The European Central Bank (ECB) and the national central banks (NCBs) of the euro area have done everything in their power to ensure the success of this extraordinary and historic project. The introduction of the euro banknotes and coins is an important step on the very long road that has been travelled, not always at the same speed, since the end of the second World War and the foundation of the European Coal and Steel Community 50 years ago. The euro is, in my view, the most visible sign for all of us of how far the process of European integration has progressed, and one that will be constantly tangible for all the citizens of the 12 countries of the euro area. With time, this symbol of European integration will develop its own history, shaped and defined by every single citizen of the euro area. As president of the ECB I feel greatly honoured to have had the chance to contribute to this process. The ECB, together with the NCBs of the euro area, has been entrusted by the EU member-states with a mandate to maintain price stability in the euro area, a mandate to which we are fully committed. Many things have been achieved in these past few years. The euro was introduced as the single currency of the euro area on January 1st, 1999, although not yet in the form of bank notes and coins, and it has brought about increased stability, confidence and predictability in all our economies, shielding them in an unprecedented way against the external shocks that we experienced in the past. When we celebrated the birth of the euro three years ago, I was aware of all the benefits it would bring, some of them at once, others over the course of time. But I was also aware that some of these advantages would not be evident to many citizens of the euro area until the bank notes and coins were put into circulation. In a few hours, this three-year gap between the introduction of the euro and the arrival of the bank notes and coins will be closed. The new bank notes, with the signature of the President of the ECB and the initials of the ECB in the five linguistic variants covering the 11 official languages of the European Community, will become part of our everyday life. The ECB and the NCBs of the euro area, together with all the governments and European institutions involved, as well as the private players, have worked hard for years to ensure that this process is as smooth as possible. I am very proud of what we have been able to achieve together. Answering all your euro questions By Jane O'Sullivan 1. When does the euro replace the punt? Although the euro has existed in virtual form since January 1999, the notes and coins will only begin to circulate from tomorrow, January 1st. There will be a dual circulation period until February 9th, during which both euro and punts will coexist. At midnight on that date the Irish pound will cease to be legal tender. A month later, on March 9th, dual display of euro and punt prices will start to be phased out progressively and the euro will be established as our new currency. 2. How do I get hold of it? Starter packs of euro coins have been available from post offices and banks for some days now. But consumers will not be able to get hold of the notes until tomorrow when ATM machines will start to dispense them. The banks are closing down the 1,200 ATMs across the State from 1.30 a.m. to empty them of Irish pounds and reload them with euro. Some ATMs will reopen as early as 6 a.m. but others may not be back in business until later in the day or on Wednesday. The busiest cash machines, such as those in key locations in the larger towns and cities, are likely to come back into use first. But the banks hope to have 85 per cent of all ATMs up and running by close of business tomorrow. Machines will initially dispense 10 and 20 euro notes, with 50 euro notes being made available from mid-January. 3. Can I get the new currency anywhere else? Retailers have also been supplied with the new currency by the banks. Although many will be closed tomorrow, they will be giving change in euro when they reopen on Wednesday. Pubs, 24-hour shops and petrol stations will also be distributing the new currency. Dubliners who are keen to get their hands on the new notes as quickly as possible can also call to the Central Bank on Dame Street. It will be open from 10 a.m. tomorrow and will change up to �500 into euro for each individual. 4. Can I still use Irish pounds? The Irish pound remains legal tender until February 9th. This means that it can be used to pay for goods and services, although change will be given in euro. From that date, it can no longer be used to make payments, although the Central Bank will continue to exchange pounds for euro for a further period. 5. How much is the euro worth? Each euro is worth roughly 79 pence while each Irish pound is equivalent to 1.27 euro. 6. How do I convert from Irish pounds to euro? The exact exchange rate between the Irish pound and the euro is 0.787564. To convert from Irish pounds to euro divide by that figure. So if you want to know what �5 is in euro, divide 5 by 0.787564 and you get 6.348 euro. Rounded for convenience, you are left with a figure of 6.35 euro. To convert euro into Irish pounds, multiply the euro figure by 0.787564. So to find out what 5 euro is, multiply by 0.787564 and you get �3.937. After rounding, you are left with �3.94. 7. Where can I use the euro? The new currency is being adopted by 12 members of the European Union. Aside from the Republic, these are Austria, Belgium, Finland, France, Germany, Greece, Italy, Luxembourg, the Netherlands, Portugal and Spain. Britain will not be adopting the euro next year, so sterling will continue to be used in England, Scotland, Wales and Northern Ireland. The other EU states that will remain outside the euro zone for now are Denmark and Sweden. 8. What will the notes and coins look like? There will be seven euro bank-notes in circulation, each depicting an architectural design from Europe's cultural history. The notes will be available in denominations of 5, 10, 20, 50, 100, 200 and 500 euro. All have advanced security features including a watermark and security thread. There will be eight euro coins, in denominations of 1, 2, 5, 10, 20 and 50 cent and 1 and 2 euro. One side of the coins will be the same in all euro member-states. The other side will show the 12 stars of the EU flag, the year and a national emblem. In the Republic, the emblem will be the harp and the word "�ire". 9. Will the euro make things more expensive? Although the apparent cost of goods will rise when the price is converted to euro, most retailers have promised not to take advantage of the euro in order to sneak through price increases. 10. What do I do if I feel I'm being overcharged? The Director of Consumer Affairs, Ms Carmel Foley, has introduced a logo to be displayed by all retailers who have signed a code committing them to fair play when converting from Irish pounds to euro. However, customers are warned to remain vigilant to ensure they are not ripped off. Those with complaints can call Ms Foley's office on (01) 4025555. Commuters asked to be patient amid confusion By Jane O'Sullivan Whatever about planes, those using buses, trains and automobiles may be faced with some confusion in the early days after the euro is introduced. To avoid serious inconvenience, customers are advised to allow a little extra time for their journeys and to keep their cool while everyone gets used to the currency. New year revellers are likely to be among the first to experience the euro and its ramifications as they wend their way home in the early hours of Tuesday morning. But those taking taxis may not notice much change at all at first. Mr Vincent Kearns, vice-president of the National Taxi Drivers Union, estimates that only about 50 per cent of the 7,600 taxis on the road will have their meters reprogrammed and verified by tomorrow. But even those with euro meters won't be in a position to hand out euro notes as change in the early hours of the changeover. Unlike retailers, Mr Kearns says, taxi drivers were not provided with euro notes by the banks so all they will have at first is a supply of euro coins. As a result, a taxi driver getting a �50 note is unlikely to be able to give back change in euros until the new currency starts to flow into the system. Taxi customers however will notice that the cost of journeys will rise from tomorrow under fare increases agreed by local authorities in Dublin. From the new year, the minimum fare will be 2.75 euro. For journeys taking place between 8 a.m. and 10 p.m., passengers will be charged 15 cents for every one-ninth of a mile or 30 seconds or part thereof. From 10 p.m. until 8 a.m. and on Sundays and public holidays, this will cost 20 cents. Those opting for public transport will find that all bus fares will be rounded down to the nearest five cents. For example, a �1.15 fare directly converts to 1.46 euro but will be rounded down to 1.45 euro. The 60p fare becomes 75 cents, an 85p fare will cost 1.05 euro and the �1.05 fare becomes 1.30 euro. Pay slots on Dublin Bus have been fitted with a warning asking customers to pay for their journey in one currency only during the changeover period. To prevent delays at bus stops, drivers will not issue change tickets to customers during the first three weeks of the changeover period. Bus �ireann fares will be rounded down to the nearest five, 10 or 20 cents, except for city services fares where there will be a straight conversion. For example, a return journey from Dublin to Galway, which currently costs �12, will be priced at 15.20 euro instead of the exact conversion price of 5.24 euro. Fares for DART, suburban and Intercity services will be converted exactly to euro amounts or rounded down from January 1st as part of Iarnr�d �ireann's "Fare and Square" policy. The company is requesting that rail-users allow extra time to buy tickets and tender the exact fare in one currency only during the changeover period. Information leaflets, including fares conversion tables, are available at all stations. Iarnr�d �ireann is also urging customers to buy pre-paid weekly, monthly or 10-journey tickets to help ease rail station queues, according to Mr Barry Kenny, spokesman for the company. For those using their cars, pay-and-display parking units in Dublin are already fully euro-compliant and charges will be converted directly to the euro rate. Drivers will not have to pay using awkward amounts of coins as the length of time will instead be adjusted to ensure the public don't lose out during the changeover. For example, a �1-an-hour zone will cost 1.30 euro rather than the exact conversion rate of 1.27 euro but users will receive an extra minute of parking time. Customers will have a choice of which currency to use until February 9th when pay-and-display machines will only accept euro coins. Duisenberg still to decide on position The president of the European Central Bank, Mr Wim Duisenberg, said in an interview released yesterday he has still not decided whether and when to step down from his position. In an interview with the German daily Die Welt due for publication today, the 66-year-old Dutchman said he would "take a decision at the right time" and that "a date has not yet been set". Mr Duisenberg was chosen as the head of the bank which oversees the euro currency in 1998 after an acrimonious row with France, which wanted its own candidate, Bank of France Governor Jean-Claude Trichet, in the job. French President Jacques Chirac said the appointment had been agreed on the understanding that Mr Duisenberg would give up his position half way through his eight-year mandate, in mid-2002. Mr Duisenberg denied at the time such a deal had been struck. Mr Duisenberg told Die Welt it would "not necessarily take eight years to build a team to run the bank" Meanwhile, the French Finance Minister has said the euro has a "significant" potential for appreciation against the dollar that would eventually be demonstrated because of the euro zone's economic power. "When I see the fundamental elements of the European economy . . . I think there is a potential for the euro's appreciation regarding its external value which is significant and which will reveal itself over time," Laurent Fabius told a news conference on the switchover to the euro. German Chancellor Gerhard Schroeder said in his New Year's address today that he understands German fears about the euro but that the new currency will usher in better times. - (Reuters/AFP) Euro seen as threat to identity By Lorna Siggins The euro represents a direct challenge to the authority of the nation-state, according to a Galway university academic. Prof Kevin Barry of NUI Galway believes the abolition of national currencies may signal an enormous reduction in the dependence of the citizen upon the state, and therefore in the elements which bind citizens together as members of a nation. "National currencies have been one of the most effective founding elements of the modern nation-state," Prof Barry said. Historically, one way of defining a nation was "an area beyond which one must exchange one's own currency for another currency". That situation would undergo a radical transformation in EU member-states from tomorrow, he predicted. Prof Barry believes that the euro changeover will challenge our very sense of nationality in a fundamental way. Blair under fire as he hedges on euro >From Frank Millar, London Editor Britain's European war reignited last night as 12 euro zone countries prepared for tomorrow's introduction of the new single currency. The Prime Minister, Mr Tony Blair, gave a fresh signal of his enthusiasm for eventual British membership, describing the success of the euro as "massively in Britain's interests" and repeating his government's commitment to join subject to the Treasury's five economic tests and a popular vote in a subsequent referendum. However, Mr Blair's continued refusal to name the day for a British referendum brought complaints from pro-euro enthusiasts even as the Conservative leader, Mr Iain Duncan Smith, predicted that a popular coalition against entry would see the British people "put their tanks on his MR BLAIR'Slawn". Amid signs that the Labour government is preparing to spend millions of pounds in a pro-euro propaganda offensive, Mr Duncan Smith accused Mr Blair of "furtive manoeuvring to bamboozle the British people" into giving up sterling and of waging "a phoney war" without yet daring to nail his colours to the mast. However, the former Conservative deputy prime minister and leading europhile, Lord Heseltine, accused Mr Blair of running scared of Britain's North American-owned, euro-sceptic press. "He isn't confident he can win this battle," Lord Heseltine told the BBC. "The fact is they've run away from the issue," he continued, complaining that government indecision left leading companies and much of British commerce frustrated and uncertain. Meanwhile, the leader of the Liberal Democrats, Mr Charles Kennedy, dismissed the Chancellor's economic tests as "a fig leaf". He claimed the Blair government would need to legislate for a referendum in the coming calendar year if the euro was not to become the dominant issue of the next general election, most likely in 2005. Speaking on the BBC's World This Weekend programme, Mr Kennedy said continued delay would see Mr Blair suffer the same fate as previous British prime ministers, with his position undermined at home and hampered when attempting to provide leadership abroad. "The longer this goes on, the more the fig leaf of the economic tests is beginning to be exposed as rather hollow," said Mr Kennedy. "Mr Blair will find domestically that his position becomes increasingly undermined if a clear lead is not given." Lord Heseltine was also dismissive of the economic tests on which Mr Brown must deliver his assessment within 17 months, describing them as "a protective barrier" giving the government "apparently intellectually defensible reasons for putting things off". Helplines available for euro teething problems IF you encounter difficulties with the introduction of euro notes and coins, The Irish Times wants to know about it. Our daily Euro Watch column will chart readers' experiences with the transition process. We may not be able to solve your problems but we do want to hear about them. Telephone the finance department on 01-6792022 between 2 p.m. and 4 p.m. tomorrow or e-mail: [EMAIL PROTECTED] The Euro and You Assorted official helplines will also be open on New Year's Day. For consumers: Euro Changeover Board of Ireland - Tel: 1890-201050 (9 a.m. to 7 p.m.), Website: www.euro.ie; Office of the Director of Consumer Affairs - Tel: 01-4025500 (10 a.m. - 1 p.m., 2 p.m. - 5.30p.m.), Web: www.odca.ie For business: Forf�s - Tel: 1890 20 83 08 (9am-5.30pm) Web: www.emuaware.forfas.ie (Wouldn't it be very appropriate if the Irish Times stopped using this MM-DD-YYYY and am/pm nonsense too? From the Middle Ages into the the Third Millennium!) Han
