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Thursday, 30 August, 2001, 07:23 GMT 08:23 UK
The politics of the euro
French police officer on guard as euro coins are unloaded in Nice
Euro shipments require heavy security
The introduction of the euro has been the single biggest issue confronting European finance ministers for months, and as E-day approaches on 1 January 2002 it will be seen as a key test of the success of Europe's biggest project - economic and monetary union.

Euro mood
Keenest: Italy, Luxembourg
Keen: Belgium, Greece, Ireland
Not keen: Austria, Finland, Germany, Portugal
Sceptical: Denmark, Sweden, UK
This is most obviously true for the 12 countries where the euro is taking over from historic currencies - but the other three member states are also ruled by governments that would like to steer their countries towards the single currency in the longer term.

How smoothly the changeover goes, and how the currency fares on the exchange markets, are likely to affect the chances of winning over the doubters.

For now problems of security and logistics are the biggest headaches.

The sheer quantity of notes and coins that will be on the move is staggering, providing obvious opportunities for robbers. The confusion of the changeover will also be a window of opportunity for counterfeiters and money launderers.

Y2K analogy

European officials are cautiously confident that banks and large companies are prepared for E-day, but doubts still remain about the readiness of small and medium-sized enterprises, and the risk of inflationary price rises in shops.


I don't get the sense of a groundswell of panic among finance ministers

Edward Bannerman, Centre for European Reform
Then there is the question how consumers themselves will react.

On 1 January more than 300 million people will be struggling with conversions at exchange rates that range from relatively simple (1.95 Deutschemarks to the euro) to completely fiendish (166 pesetas to the euro). A few monthjs ago, only one in five people knew the value of their currency in euros.

Chaos may reign at shop checkouts - at least in the early days - as customers pay in the old currency and get change in the new one.

However, Edward Bannerman of the Centre for European Reform in London, expects a repeat of the decimilisation experience in the UK 30 years ago, when, after temporary confusion and a short-lived plunge in retail sales, few people looked back.

"You can draw parallels with the Millennium Bug," he says.

"People expected that trains would stop running and planes would fall out of the sky, and predicted that a tsunami of economic woe would flood the world - but in fact it was business as usual."

He adds: "I don't get the sense of a groundswell of panic among finance ministers."

Mood swings

An aide to the Belgian Finance Minister, Didier Reynders, also believes plans have now been laid sufficiently well to avoid any major problems.

Boxes of euro coins being stored at the Berlin mint
Berlin's mint strikes 6,000 euro coins per day
Looking forward to the next meeting of European finance ministers in Liege in three weeks' time he anticipates, among other agenda items linked to the euro, an uplifting discussion of the ways in which the arrival of notes and coins should boost international use of the euro - in trade, bond markets, and investment in foreign reserves.

The EU's attempts to gauge the public mood suggest a gradual warming towards the single currency - or at least no serious deterioration.

From spring to autumn 2000 the Eurobarometer poll detected a drop in support for the euro from 58% to 55%, however spring 2001 saw a rebound to 59%.

Among the 12 states that will soon be switching currencies, support had risen to 66%.

Of these countries, Finland is the only one where less than half of the population (49%) supported the euro in spring this year, while Germany, Austria and Portugal came in at less than 60%.

The most positive were Italy and Luxembourg (above 80%) followed by Belgium, Greece and Ireland (above 70%).

The countries least enthusiastic about the euro were, predictably, those that will be steering clear of it for the time being - the UK, Sweden and Denmark.


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