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It's Happy New Euro for a Continent

January 01, 2002|CAROL J. WILLIAMS | TIMES STAFF WRITER

FRANKFURT, Germany — More than 300 million Europeans adopted the euro as their common currency today, finally fulfilling calls for greater unity and integration by putting their money where their mouths are.

The long-awaited E-day arrived with much fanfare and self-congratulation, although it was hard to tell how much of the celebration was over the shiny new coins and colorful bank notes and how much was due to the traditional New Year's fireworks and revelry in the 12 participating nations.

Outside the European Central Bank here, the birthplace of the euro, pyrotechnics, ear-splitting explosions and a pall of smoke greeted 2002 and the advent of the world's second-largest monetary system after that of the U.S. From Helsinki in Finland to the Canary Islands, concerts heralded the euro and sound-and-light shows illuminated giant replicas of the coins and bills. The Pont Neuf in Paris, the oldest bridge in the City of Light, was illuminated with the euro's predominant color, blue, and adorned with national flags along its dozen arches.

While many Europeans continued to bemoan the loss of their trusted national currencies--especially in Germany, where the sturdy mark has been a symbol of stability for half a century--the euro enjoyed a modest rise in popularity amid the final countdown.

"It's a bit tragic," said Manfred Obels, a salesman waiting his turn to collect euros shortly after midnight at a Dresdner Bank cash machine. "We'll miss our marks, although I guess this is for the good of Europe."

Euros have been edging their way into continental consciousness for three years now, as exchange rates among the states were fixed with the Jan. 1, 1999, launch of the "virtual currency." The European Central Bank has controlled interest rates throughout the euro-zone since then, bank balances have been appearing in both currencies, and billions in euro-denominated stocks and bonds have been traded during the changeover.

But actually getting the money into their hands was a signal event for Europeans and the world's largest exchange of currency. Revelers lined up at automated teller machines at the stroke of midnight to get their first infusions of the 14 billion bills that had been withheld from the public to prevent counterfeiting and confusion. It took at least 10 minutes for most of the ATMs to load their new programs, but customers were getting their money in time to pay in euros for the last rounds of champagne and mulled wine.

The first of 52 billion coins minted for the cause began reaching euro-zone residents two weeks ago, when banks sold "starter kits" to get consumers used to the look and feel of the new money. More than 450 million of the eight-coin packs were sold for the equivalent of about $10 each--twice as many as euro planners had calculated and a sign that citizens were warming to the new money.

While economists and political leaders have been trumpeting the common currency as the crowning event in the creation of a powerful new economic bloc, the citizens of the larger euro countries have been decidedly less enthusiastic. The latest polls in Germany, the most populous and powerful of the euro states, have shown two out of three respondents still opposed to giving up their marks. In France, 55% of citizens are mourning the loss of the franc. Even in Greece, one of the countries expected to benefit most from the euro, half those surveyed Friday by the Greek Federation of Retailers said they were not yet ready for the euro.

Sharing a monetary instrument is expected to deepen the integration of European Union member states that began 50 years ago with the first, six-nation bloc coordinating coal and steel trading. Not only will euro-zone residents enjoy the convenience of using the same money wherever they travel within the region, but the Stability and Growth Pact aims to ease coordination among the countries' economies and to curb debt and inflation.

European economic stewards are hoping the euro will enjoy a resurgence now that it is a physical part of daily life. The currency has lost more than 20% of its value vis-a-vis the dollar since its introduction three years ago, falling from $1.17 to about 88 cents.

Hailing "this little bit of united Europe we now hold in our hands," EU Executive Commission President Romano Prodi said the 660 billion euros created--$580 billion worth--give Europeans a new identity and more clout in global financial affairs.

"To have the same currency is not just an economic decision, it's a political decision," Prodi said. "You have to harmonize many behaviors, organize decision-making processes in case of a crisis in one of the countries or erratic shocks."

Prodi and others reminded Europeans of the debt of gratitude they owe the euro's early proponents, notably former German Chancellor Helmut Kohl and the late French President Francois Mitterrand.

"Our money will be a true catalyst for integration," European Central Bank President Wim Duisenberg told journalists.

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