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The euro goes live
by Mary Gahan |
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Tuesday - January 1 2002
Business correspondents, Greg Wood and Mary Gahan, report from Paris.
The governor of the Bank of France, Jean-Claude Trichet, was one of the
first people to get euro notes out of a cash machine just after midnight on
January. He told the Today programme he hoped people in the UK would decide
as rapidly as possible to join the euro, and he thought the introduction of
notes and coins would have a decisive effect on public opinion.
Many High Street stores in the UK began to accept the new European currency
on New Year's Day. Peter Williams, finance director of Selfridges, said he
thought buisness travellers and holidaymakers would quickly get used to the
idea of being able to spend any spare euros at home.
The new currency has meant that prices have had to be translated from the
old money - for instance francs, Deutschemarks, or drachmas - into euros.
There is concern that price increases are being disguised. Eric Chaney, the
chief European economist at the investment bank, Morgan Stanley, said he
thought these fears about prices had been overdone.
Daniel Sicouri, the President of Ogilvy and Mather in France, told us that a
lot of his clients were waiting to see how their customers would react
before changing prices. He said people were more likely to focus on the less
expensive items rather than big purchases such as cars. For example, if a
yoghurt sold for 10 French francs, a straight conversion would put the price
at one euro, 54 cents. Companies could make it a more attractive price by
cutting it to one euro 49 cents, or they could make bigger sized yoghurts to
sell for one euro 99.
Although euro notes and coins were introduced at midnight, the euro was
already being used on paper by businesses and banks. Jean Guy, the head of
euro operations at France Telecom, said that by the end of the year, more
than forty per cent of customers were choosing to pay their bills by cheques
in euros rather than francs. He said he thought people would have some
difficulty using the new notes and coins to begin with, but thought any
problems would soon be ironed out.
As for the tourists who are hoarding 100 franc notes in their sock drawers,
Travelex in France is planning to keep on exchanging the old French currency
for another 10 years.
Monday 31 December 2001 - Munich, Germany
Our business presenter, Greg Wood, is in Munich for the last day of the Deutschemark.
Many people in Germany feel nostalgic and sad about the passing of a currency which has served them well for more than half a century. Renate von Torne and her husband Reinhart are typical. They think that the new euro notes and coins will be a success but they're sorry to see the departure of an old friend.
Stallholders at Munich's historic Viktualienmarkt will be at forefront of the changeover because most of their customers pay in cash. Betsy Hollweck thinks older people will have difficulty getting to grips with the different notes and coins but that the confusion will be short-lived.
One of the country's strongest voices against the euro says the new currency could damage investment in the German economy. Professor Karl Schachtschneider thinks the euro will come to symbolise his country's economic fall.
Big German businesses have welcomed the change. Herbert Lohneiss, from the Munich-based electronics giant Siemens, says his company will save millions of euros a year because it will no longer have the cost of
dealing in so many currencies. It's tougher for small companies. Catherine Piana represents Europe's vending machine suppliers. She's convinced some of her members will actually go out of business because they cannot afford the cost of changing machines to take euros.
Background on the euro
People can start spending the new Euro notes and coins from midnight on January 1. Twelve countries are exchanging their currencies for the Euro. They are Germany, France, the Benelux countries, Austria, Italy, Spain, Portugal, Greece, Ireland and Finland.
The Euro was actually launched three years ago and has been used on paper by banks and businesses since then. People have been billed in the new currency and signs displaying the price of goods in both their existing currency and the euro have become a familiar sight.
Over the past few months, notes and coins have been delivered to banks and shops, but New Year's Day will provide people with the first opportunity to spend the new money. It will quickly take over from the Deutschemark, the French franc, the Greek drachma and all the other national currencies it is replacing.
The UK has chosen to stay outside the Euro, along with Denmark and Sweden. Businesses in Britain which trade with Europe have already been doing business in euros, and shops including Selfridges and Marks & Spencer will accept euros in Britain.
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| Jim's New Year's Day broadcast from a Paris cafe. |
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| Greg Wood and Mary Gahan with Jean-Claude Trichet, the governor of the Bank of France. |
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| European Central Bank |
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| A 100 euro Note |
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