Euro becomes a reality

Celebrations across the eurozone as the cash currency is launched

The euro has become a reality for 300 million citizens in 12 European countries as notes and coins go into circulation for the first time on 1 January 2002.

Euro conversion rates

Austrian schilling: 13.76

Belgian franc: 40.3399

Dutch guilder: 2.20371

Finnish markka: 5.94573

French franc: 6.55957

German mark: 1.95583

Greek drachma: 340.75

Irish punt: 0.787564

Italian lira: 1936.27

Portuguese escudo: 200.482

Spanish peseta: 166.386

It is the biggest monetary changeover in history.

Over 6bn notes and nearly 40bn coins have been distributed to banks, retail shops, and cash machines which begin dispensing the new currency at midnight (1100GMT).

Celebrations are being held in many European capitals, with fireworks and concerts in Frankfurt, the home of the European Central Bank.

Early indications are that the huge logistical task of distributing the new currency has gone relatively smoothly, with little evidence of either counterfeiting or price rises.

The Indian Ocean island of Reunion will see the first euro notes

The launch of the new currency, which has been used by banks and companies since 1999, will intensify the argument over the single currency among the three EU countries (Denmark, Sweden, and the United Kingdom) who are not members.

The euro's effect will be felt well beyond its borders, becoming legal tender in Kosovo and Montenegro and French overseas territories from Martinique in the Caribbean to Reunion in the Indian Ocean - the first place to use the euro.

A new era

European leaders hailed the launch of euro notes and coins as the start of a new chapter in the continent's history.

In circulation

6 billion notes

37 billion coins

150 million starter kits

European Commission President Romano Prodi said the currency would be an instrument of economic stability and growth across Europe.

"Today is a very special day, a great day for Europe," he said.

"Only a few years ago the euro was a dream, but now we have made it a reality."

Wim Duisenberg: dawn of a new era

The president of the European Central Bank, Wim Duisenberg, said the launch represented the dawn of a new era.

"By using the euro notes and coins we give a clear signal of the confidence and hope we have in tomorrow's Europe," he said.

And he urged the three EU states that have chosen to keep out of the euro to "come and join us".

Celebrations

Celebrations are being held across the 12 states:

• In Frankfurt a 15-metre-high euro sign outside the European Central Bank is being illuminated at midnight
• In Dublin, people are being asked to parade in costumes based on euro notes or coins
• Paris is illuminating its oldest bridge, the Pont Neuf, with the colours of the euro and the EU
• In Vienna, Chancellor Wolfgang Schuessel and Mr Prodi plan to buy flowers for their wives with the new cash.

Long campaign

The euro states prepared for the step with extensive public awareness campaigns and "starter packs" of notes and coins which were released in recent weeks.

Mr Duisenberg admitted that there had been and would continue to be teething problems, but he said he was convinced that the problems would be limited "in time and in scope".

The cost to business could be high, with national currencies trading in parallel with the euro for two months in most countries.

The advertising campaign used many different media

Retailers are supposed to accept both, but give change in euros only - a costly, inconvenient process.

EU Commissioner Pedro Solbes said that dual pricing had been found to be accurate in 95% of cases.

He warned businesses against using the euro launch to raise prices - and praised Germany for systematically rounding prices down.

EU leaders hope the launch of the euro will strengthen economic and political cooperation across the eurozone, and lead to a higher external value of the currency.

On Monday the euro strengthened in international currency markets reaching a two-year high against the yen and rising nearly 1% against the US dollar to end at $0.89 for the day - but still 25% lower than three years ago.

Challenges

Each country has its own difficulties to overcome.

• In Germany, a legal loophole has led some shopkeepers to threaten to refuse Deutschmarks after New Year's Day
• Dutch media are reporting that prices could run up to 35% higher after the introduction of the euro
• In France, the euro was accidentally launched three days early by a cash point which erroneously started spewing out the new notes
• French and Italian bank workers are threatening to strike on 2 January due to the extra workload created by the changeover
• In Italy, three times as much cash has been withdrawn as normal over the past few days, due to fears that cash machines will go wrong.