Nations Receive Approval for Adopting Euro Currency
BRUSSELS, Belgium (AP) -- Europe's quest for a continent-wide currency got a big boost Wednesday when 11 nations won the go-ahead for adopting the euro at the end of this year.
The choice of Germany, France, Italy, Spain, the Netherlands, Belgium, Portugal, Finland, Ireland, Austria and Luxembourg is expected to be confirmed by European Union leaders in a final decision at a summit May 2.
When the euro is launched Jan. 1, the 11 countries will form an economic powerhouse accounting for almost one-fifth of the world's economic output and trade. When euro banknotes and coins hit the streets two years later, 290 million Europeans will be using the same currency -- meaning death for the German mark, the French franc and the Italian lira -- and a new rival to the U.S. dollar. "It is the beginning of a new era," French President Jacques Chirac proclaimed in Paris after the EU's executive body, the European Commission, announced its selection in Brussels. The only member of the 15-nation EU left out was Greece, which never stood a chance because of its shaky economic performance. Britain, Denmark and Sweden have thus far declined membership in the unified European monetary club for fear that ditching their currencies will erode their independence. The euro will revolutionize the way Europe does business and create a global currency that could rival the American dollar as reserve holdings in the vaults of the world. The nations will lock in their exchange rates with respect to the euro, which will become a tradable currency. But the single European currency is much more than an economic exercise. It is a political act that may do more than anything else in the previous 46 years of the organization to unify continental Europe. Euros will not go into circulation until 2002, but banks and governments will be adopting the currency on paper next year. Under the current timetable, the euro will come into being Jan. 1, 1999. That will launch a three-year conversion period that will include the introduction of euro notes and coins by Jan. 1, 2002, and a final withdrawal of national currencies from circulation by July 1, 2002. Italy made the list despite its huge national debt -- $1.327 trillion or 121 percent of gross domestic product -- which violated one of the EU's main criteria for eligibility. …