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The Euro Makes its Debut - 2001-12-31

In the biggest currency swap in history, more than 300 million Europeans in 12 countries will start using the euro as their day-to-day money Tuesday, replacing their francs, marks, lire and pesetas. Virtually no one is denying that there will be a few glitches during the massive changeover, but many Europeans see the introduction of the euro as a defining moment in European integration.

The European Union says six billion crisp euro notes and 57 billion shiny euro coins have been distributed to banks, post offices and stores in one of the most massive logistical operations ever undertaken. Much of that money will begin flowing into European pocketbooks as soon as the new year begins.

European leaders attempted to wax poetic about the significance of the changeover. The president of the European Commission, Romano Prodi, told a news conference in Brussels that the euro represents the dawn of a new era. "It is your money. It is our future. It is a piece of Europe in our hands," he said.

Not to be outdone, Wim Duisenberg, the head of the European Central bank, told reporters in Frankfurt that the new currency is a symbol of European unity. "Our money will be a true catalyst for integration, and it is helping to build a community enriched by our diversity of cultures and strengthened by our common values of democracy and individual opportunity," he said.

Asked if he had a message for Britain, Denmark and Sweden, the three European Union members that are not participating in the euro, the plain-spoken Mr. Duisenberg had a short answer: "Come and join us."

Euro-boosters like Mr. Prodi and Mr. Duisenberg say the new currency will contribute to a common European identity. Though many Europeans share that view, they are also worried that merchants will take advantage of the changeover to hike their prices. European Monetary Affairs Commissioner Pedro Solbes, at the Brussels news conference, stressed there is no justification for using the euro to increase prices. "There are absolutely no reasons to increase your prices with the pretext of the arrival of the euro," he said. "Of course, prices may go up. That is always possible in a market economy. ... But citizens need to be told why there are increases."

In most euro-zone countries, the old national currencies will continue to circulate during a two-month transition period, and banks will exchange euros for them for a few months after that.

The euro has been a virtual currency for the past three-years, used by banks and large companies in their accounting. But on Tuesday, citizens will get to use cash for the first time.

The euro has lost more than 30 percent of its value against the U.S. dollar since it began to be traded in 1999. And one analyst, David Carroll, of Seven Investment Management in London, does not expect it to challenge the dollar's dominance anytime soon. "The dollar has traditionally been the safe haven currency, purely because the U.S. economy is so much larger than even many of the European economies put together, and I would expect that to continue," he said. "I would be a bigger fan of U.S. dollars than I am of euros."

The introduction of the new money has not changed some old European habits. Workers at Italy's central bank and French commercial bank employees say they will strike on January 2, potentially disrupting currency operations on the first business day after the euro enters circulation.