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Monday, 7 May, 2001, 13:41 GMT 14:41 UK
Ministers calm euro inflation fears
Euro coins ready to go into circulation
Euro coins are rolling off the production line
By the BBC's Europe Business Correspondent Patrick Bartlett

European finance ministers have denied that consumers face price rises as a result of the introduction of euro notes and coins next year.

The finance ministers were responding to concerns that inflation pressures, related to the switchover to the euro, are preventing a cut in Eurozone interest rates.

The euro is to be launched in cash form to 300 million citizens in 12 countries from 1 January 2002.

But there are few signs that the new currency has won consumers' hearts.

Price increases

Opinion polls suggest public confidence in the euro is being undermined by fears that shops will use the switchover to furtively increase prices.

Didier Reynders, chairman of the Euro group of finance ministers, said there was no evidence that preparations for euro notes and coins were triggering price rises.

He said measures were in place to ensure that when prices were converted from national currencies into euros, they would be rounded up or down fairly.

He added that competition between retailers would also help keep costs under control.

Referring to fears that euro-related price rises were delaying a cut in interest rates, Mr Reynders said the European Central Bank saw no inflation panic because of the euro.

But the fact that the Eurogroup finance ministers discussed the issue at all, suggests there is concern about the popularity of the currency.

Since its launch, the euro has fallen significantly in value against the dollar, and has made little recovery despite economic problems in the United States.

Public awareness campaigns for the euro have started in most countries, but many citizens have so far taken little interest.

A survey in Germany suggested most don't even know the euro becomes legal tender from January next year.

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See also:

08 Feb 01 | Business
Q&A: Euro basics
11 Apr 01 | Business
Europe keeps interest rates steady
20 Mar 01 | Business
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