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Tuesday, 11 December, 2001, 21:36 GMT
Russia clings to the dollar
Euro publicity at the European Business Club in Moscow
The euro gets a party launch in Moscow
A conference in Moscow has helped to focus attention on how Russia and other eastern European countries are preparing for the launch of euro notes and coins from January.

Russian Finance Minister Alexei Kudrin
Kudrin believes euro will be good for business
Russian Finance Minister Alexei Kudrin led a series of top Russian officials who expressed their expectations of the European single currency at the conference on "The euro: Its Role in European Integration".

"Working with the euro contains many attractive features for business," Mr Kudrin told the conference, in remarks broadcast by Russia TV.

Improved transparency of prices and reduced foreign-trade transaction costs "will make European capital markets more attractive to Russian banks and enterprises that wish to make foreign borrowings," he said.

Good example

Mr Kudrin also saw lessons for the former Soviet republics in the Commonwealth of Independent States, where the single currency of 10 years ago - the rouble - has given way to national currencies.


The dollar will remain the main currency for a very long time yet

Russian Finance Minister Alexei Kudrin

"The introduction of the single European currency could set an example for other countries, including the CIS, of how their currencies could be integrated," he said, according to Itar-Tass news agency.

However, Mr Kudrin warned against overstating the euro's importance.

While it would make Russia's dealings with the euro-zone "radically easier", he said, "the dollar will remain the main currency for a very long time yet and will not be squeezed from settlements with Russia for a long time".

The deputy head of Russia's Central Bank, Tatyana Paramonova, assured the conference that the bank was fully prepared for "the end of another stage in the history of the world economy", according to Interfax news agency.

Cash problems

But the same forum heard a complaint from a foreign banker that all was not running smoothly.

Michel Perhirin, head of the Austrian Raiffeisenbank's Moscow branch, said European banks had asked the European Commission's local representative to intervene over problems with bringing cash euros into Russia ahead of 1 January.

A trader at the Moscow Interbank Currency Exchange
Traders look forward to euro dealing but the dollar will remain top dog
Mr Perhirin complained that Russian customs authorities had blocked shipments of cash euros because a Central Bank directive deprived the currency of the status of "a unit of legal payment" until its official launch.

However, according to Interfax, Ms Paramonova told reporters that the bank and customs authorities had prepared a joint order recognizing cash euros as a legal form of payment before 1 January.

"Euro currency can be brought into Russia by authorized banks before it is officially put into circulation... provided that this process complies with the instruction", which comes into force this Thursday, the agency said.

Optimism

There was greater optimism in other eastern European countries, especially those hoping to join the EU soon.

"Estonia definitely stands to benefit from the growing economic integration of the euro-zone and better long-term economic growth prospects," the Baltic state's central bank said in a statement reported by the Baltic News Service.


The banks are awaiting the January launch with at least the same tension as the date-change last year

Hungarian TV reporter
"The likelihood of inflation possibly emerging in the euro-zone at the start of next year and carrying over into Estonia is small."

In Hungary, preparations for the new currency are well advanced, according to a report on national TV.

The country's banks have ordered 15-20 million euros in readiness for 1 January, and a spokesman for the National Savings Bank told the reporter that more than 14,000 new accounts had been opened since September to mop up people's spare cash in euro-zone national currencies.

But psychological barriers could be harder to surmount than banking technicalities, the report suggested.

One interviewee said people could take 40 years to really get used to the new currency, to judge by the way some elderly people in France still thought in old francs, which were abolished there in 1960.

"With this, the banks are awaiting the January launch with at least the same tension as the date-change last year," the reporter commented.

BBC Monitoring, based in Caversham in southern England, selects and translates information from radio, television, press, news agencies and the Internet from 150 countries in more than 70 languages.


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11 Dec 01 | Europe
11 Dec 01 | Business
11 Dec 01 | Business
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