Accessibility links

EU: The Euro -- Clock Ticking to 1 January (Part 1)

  • Mark Baker

In less than four months, the 300 million citizens in the 12-nation euro-zone will begin the process of switching over to the common euro currency. The European Central Bank, in charge of coordinating the currency launch, has started a publicity campaign in print media and on television and billboards. But already, unscrupulous elements are taking advantage of the information void. In a special three-part series on the introduction of the euro, RFE/RL correspondents Mark Baker and Breffni O'Rourke look at what exactly will happen on 1 January 2002, the potential the new currency offers for counterfeiters, and the challenges it poses to black marketeers.

Prague, 13 September 2001 (RFE/RL) -- It's being called the biggest currency reform in history. In less than four months, the 300 million people living in the 12 countries that make up the European Union's so-called "eurozone" will begin the process of switching from their national currencies to using the common euro currency.

Beginning 1 January and lasting until the end of February 2002, citizens in most euro-zone countries will be able use both national currencies and euros for transactions in shops and stores. At the end of February, national denominations will no longer be accepted -- although central banks will continue to exchange national currencies for euros for several years to come.

The Frankfurt-based European Central Bank, or ECB, is in charge of coordinating the massive undertaking.

Antii Heinonen, the director of the ECB's banknote department, tells RFE/RL that the switchover -- coordinating the monetary policies of 12 separate countries and involving 12 individual central banks -- is the largest on record:

"No one could imagine -- let's say if you consider the area and the period with which [the switchover] will be implemented -- I think it's the largest [currency reform]. Naturally, I mean maybe in China or in India you may have had bigger amounts, but clearly the way this is implemented is exceptional."

The euro has been in existence for more than two years, but its use has been restricted to banks and corporations for virtual transactions. Until the beginning of this month, when the first notes and coins were presented to the general public, very few people outside the European Central Bank had ever seen a real euro.

The bank has come under criticism for waiting so long to introduce the euro to the general public.

Critics say the delay will contribute to confusion in countries like Greece and Italy where the national currencies -- such as drachmas and lira -- are not divisible into smaller units. The euro's value is comparable to the U.S. dollar, and like the dollar, one euro is divided into 100 cents.

Critics say the delay will also make it harder for shops and storekeepers who, beginning the first of the year, will have to recognize and accept euros. In many cases, they will be taking in familiar national currencies and giving euros in change.

Makers of automated teller machines, which will be front-loaded with euros to begin dispensing the currency in January, have complained they will not have enough time to retro-fit the thousands of bank machines across the euro-zone. The ECB estimates that as many as 90 percent of citizens will get their euros from ATMs.

Heinonen says the bank is aware of the criticisms and has planned adequately for all contingencies. He identifies the major risks as follows:

"Let's say, [the proper] functioning of all the [automated teller machines] which are using cash, for transporting [the euros to banks and stores, and] for excess demand for notes and coins. And naturally we should be prepared for everything."

A stronger criticism leveled at the bank is that by allowing the general public to remain ignorant for so long, the ECB has made the work of counterfeiters that much easier. Police across the euro-zone are bracing for a flood of fake euro banknotes in the first days of January.

To educate the general public, the ECB has recently launched a publicity campaign entitled: "The Euro, Our Money."

Heinonen says the campaign will use television spots in the early days to mentally prepare the population for the switchover. As the end of the year approaches, detailed ads will appear in magazines and newspapers highlighting the security features of the euro notes and instructing people on how to detect forgeries. Heinonen:

"In these days, in mid-September, we will start with television ads in all the participating member states. [The] television ads will give a way and a mood to the changeover. These ads will then change to [emphasizing] the denominations and, at the end of the year, to the security features of the notes and coins."

Heinonen says the publicity campaign will not be restricted to the 12 euro-zone states but will be expanded to all of the EU accession countries, and to places like Russia, Ukraine, and the Balkan countries, where large amounts of European Union national currencies are in circulation:

"Naturally, we will also have a lot of information outside of the euro area. We will translate public information leaflets with 23 additional languages, in addition to the 11 [languages] which are used inside the European Union. We will also have advertising on international TV channels, which can be seen all over the world."

In Kosova and Montenegro that campaign is especially important since the German mark is the official currency there, and they, along with the nations in the euro-zone, will be switching to euros in January.