Newspaper article The Evening Standard (London, England)

Currency Change That Will Rattle the Unready; INSIDE BRUSSELS

Newspaper article The Evening Standard (London, England)

Currency Change That Will Rattle the Unready; INSIDE BRUSSELS

Article excerpt


NOTHING will shape perceptions of the euro, in Britain and elsewhere, so much as the manner of its introduction on 1 January.

Many people are worried that the replacement of national currencies with euro notes and coins is going to be costly and chaotic. For example, Xavier Durieu, secretary general of Eurocommerce, the trade organisation representing wholesalers and retailers, warned this week that governments needed to buck up or a tragedy could result.

The conversion to the euro is like Britain's decimalisation, but with one important difference. We kept the unit of the pound, so that the main reference point for values was unchanged. But in the euro-area, all 12 national currencies will disappear.

The biggest challenge will be to get people to think of values in euros and to build up quickly the natural defences against overcharging and wrong change.

The Commission's role is co-ordination, monitoring, promotion and information.

The European Central Bank co-ordinates national central banks in introducing notes and will launch an e e 80 million ([pound]49 million) information campaign in September. However, the biggest role falls to member states - deciding details of the transition.

Germany, at one extreme, has opted for a legal "big bang" whereby Deutschmarks will no longer be legal tender on 1 January. Most member states have opted for a two-month transition, phasing out their national notes and coinage by 28 February 2002. The idea is that people will always get change in the new currency, so old notes and coins gradually disappear. So far, there is clear progress, but it is too early to say that the transition is going to go smoothly. Dual pricing is a key to educating people, but the voluntary approach means that it is happening slowly.

According to the European Consumers' Association, in Austria, France, Spain, Portugal, Germany and the Netherlands, only 30% to 40% of retailers are displaying prices in euros and old currency. Portugal is the first country to introduce mandatory dual pricing.

Big businesses are generally geared up, but small businesses are making much more patchy progress. …

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