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EU: European Central Bank Unveils Design For Euro Currency

  • Breffni O'Rourke

The European Central Bank (ECB) today unveiled the design of the new euro banknotes, which enter circulation in January. At a press conference in Frankfurt, top ECB officials highlighted the security features built into the final versions of the notes. The bank also announced a publicity campaign to prepare citizens of the 12 euro-zone countries for using the common currency's notes and coins. RFE/RL correspondent Breffni O'Rourke reports.

Prague, 30 August 2001 (RFE/RL) -- The euro came a step closer today to being a "real" currency. Since it was introduced in 1999, it has been invisible in that there have been no notes and coins issued in the 12 countries which make up the euro-zone.

Banks and some companies have used the euro for accounting purposes, but for the general public, who continue to use the notes and coins of their national currencies, the euro has remained insubstantial -- no more than a "virtual" currency.

That will change in about four months when euro-zone citizens will begin the changeover from old currencies to the euro. Citizens in most countries will have about two months to switch over to the euro, although central banks will continue to exchange old currencies for euros indefinitely.

At a press conference in Frankfurt, the ECB presented the final designs of the banknotes for the new currency. Officials highlighted security features built into the notes to ward off counterfeiters -- a real danger since until today very few people outside the ECB had actually seen a real euro.

ECB spokesman Philippe Rispal sees today's move as an important one for the fledgling currency:

"It is the first time we are going to see the real banknotes, along with the security features, and therefore it marks the first time that we are making the population aware that [with the advent of the] banknotes, the euro ceases to be 'virtual' and that the real euro is arriving."

The euro has not been particularly popular among citizens of the euro-zone. Germans, for one, grieve the loss of their deutschmark, a symbol of postwar prosperity. On international currency markets, the euro has been beset by persistent weakness with respect to the U.S. dollar.

To shore up the currency's image, the bank intends to run a public information campaign on television, billboards, and in print in all 12 euro-zone countries until the currency is fully introduced. The ECB spokesman explained the aim of the campaign is to familiarize people with the euro, not necessarily to make the euro more popular.

"We are going to start in [mid]-September a relatively large mass-media campaign to present the security features to all the citizens of the euro area, and of the rest of the world also."

Experts say such public information is needed. A Frankfurt-based analyst with Deutsche Bank, Manuela Preussel, puts it this way:

"All polls still show that people in the street are not that well informed, either about the exchange rate or how the euro changeover will happen or how long the D-mark is still legal currency, and so on, and most people don't know how the notes and coins look. And I think it's very helpful if the central bank starts this kind of campaign. But the other question is whether it is not a bit too late, whether they should have used the whole year to make a marketing campaign for the euro."

Preussel says however the real tonic for the euro lies elsewhere than in such public-relations activities:

"I think the best campaign for the euro would be if people see that the currency is no longer under [market] pressure, that it appreciates [in value] a little bit. That would be the best marketing tool for the euro."

And it's the real-world management of the euro which preoccupied the ECB's Board of Governors today. At a session in Frankfurt, the board cut the benchmark interest rate for the currency by 0.25 percentage points.

By cutting the rate, they hope to stimulate borrowing, which in turn will stimulate the general economy.

The ECB, unlike the U.S. central bank, the Federal Reserve, had been reluctant to cut rates because of concern that lower rates could ignite inflation.

Before today's rate cut, Preussel came down on the side of lowering rates. She dismisses the risks of inflation:

"I think they should [cut rates] and I think they need to. If you look at the economy and in regard to inflation, we see inflation coming down very fast and very strongly. And in this environment, I think they should adjust interest rates to, let's say, a level which still would be neutral; we do not expect them to make an 'easy' monetary policy, but we think there is scope and leeway to adjust interest rates at least by 50 basis points, [although] we do not think this will happen in one step."

The decisions of the ECB in Frankfurt have a indirect but important impact on the states of Eastern and Central Europe. That's because for most of these states, the European Union is the major market for their exports. Any downturn in the euro-zone economies is quickly felt in the East in terms of reduced export orders.

To see the ECB's designs for the euro notes, go to http://www.ecb.int/change/change.htm

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