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EDITIONS
Tuesday, 1 January, 2002, 08:34 GMT
Euro becomes a reality
street party in Dublin
There were euro celebrations in Dublin, among other places
The euro has become a reality for 300 million citizens in 12 European countries.

After three years as a currency without a physical form, euro notes and coins finally began circulating from midnight (2300 GMT, Monday).

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.

More than 6bn notes and nearly 40bn coins have been distributed to banks, retail shops, and cash machines, some of which have begun dispensing the new currency.

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

"I've come here as a matter of principle," said Rene Perrot, a 49-year-old French civil servant, who was among the first to withdraw euros from a Paris cash machine.

"From now onward I have vowed never to make another purchase in francs."

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.

Market trader in Reunion
The Indian Ocean island of Reunion saw the first euro notes

The launch of the euro, will intensify the argument over the new currency in the three EU countries - Denmark, Sweden, and the UK - which have not adopted it.

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
6bn notes
37bn coins
150m 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."

ECB bank chief Wim Duisenberg
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 remain 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 was illuminated at midnight
  • In Dublin, people were asked to parade in costumes based on euro notes or coins
  • Paris illuminated its oldest bridge, the Pont Neuf, with the colours of the euro and the EU
  • In Vienna, Chancellor Wolfgang Schuessel and Mr Prodi were planning 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.

Euro cake in Frankfurt
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.

At 0800 GMT, the euro was worth $0.8892, 115.81 yen and 0.6117.

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 machine 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.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Janet Barrie
"The birth of the new currency called for a massive celebration"
French Finance Minister, Laurent Fabius
"The euro will be a very strong currency for the future"
The BBC's Rebecca Jones in Berlin
"Polls suggest half of the population don't want the Euro"
Economist Ulrich Bachmann
"Traders are very keen to have just one currency"

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See also:

31 Dec 01 | Business
31 Dec 01 | Business
20 Dec 01 | Europe
14 Dec 01 | Business
29 Dec 01 | Europe
30 Dec 01 | Europe
31 Dec 01 | Business
31 Dec 01 | Europe
31 Dec 01 | Europe
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