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Sat, Mar 02, 2002 - Page 21 News List

Few mourn the deaths of Europe's old currencies


Euroland's historic, glitch-free transition to the single currency completed its final stage smoothly Thursday night when all remaining national banknotes and coins ceased to be legal tender.

Spanish pesetas, Finnish markka, Austrian schillings and half a dozen other "legacy currencies" quietly joined the obsolete French franc, Irish punt and Dutch guilder which had earlier been replaced by the euro.

From yesterday morning, the 305 million people in 12 of the EU's 15 member states will be using only the euro, though remaining national currencies can be exchanged at central banks for several years.

Ending their lives with a barely noticed whimper, the outgoing currencies were little mourned, although the Spanish paper El Pais has been giving away collections of peseta banknotes in facsimile.

In Belgium, where extensive use of plastic cashcards helped to ease the changeover, Le Soir ran a cartoon of a sombre funeral procession for the 170-year-old franc, saying it had long been "clinically dead". Most people made the switch soon after "E-Day" on January 1, with some of the 15 billion crisp new euro banknotes and 50 billion coins filling wallets and cash registers well ahead of the final deadline.

Romano Prodi, the president of the European commission, said: "The euro changeover has been an enormous success, all thanks to the enthusiasm of the European people who have shown themselves capable and ready to rally with resolve and determination behind ideas that make good sense for them, their daily lives and future."

Surveys by the commission suggested that 81 per cent of the citizens judged the changeover successful, although 67 per cent thought prices had risen as a result. Consumer prices did jump by 2.5 per cent in January, up from 2.1 per cent in December. But economists say most of that rise appears to be the result of higher food prices, stemming in turn from bad weather. Now that the big switch is over, huge economic tests lie ahead for the eurozone. Earlier this month, Germany narrowly escaped a reprimand over its ballooning budget deficit, and there is concern at the slow pace of structural reforms and the euro's poor performance on the currency markets.

Yet, following the maxim that nothing succeeds like success, polls in Britain, Sweden and Denmark, the three EU members which have not yet adopted the euro, show growing enthusiasm for joining.

Roderigo Rato, the Spanish finance minister and the current chairman of the Ecofin council, said the proof of the euro's success lay in its increasing popularity outside the eurozone. "Public opinion is beginning to be more in favour," he said. "People in the 12 euro states have found the transition relatively painless.

"In the space of little more than a month it has become totally assimilated."

Mr Rato said that with the euro in place, the pace of economic integration would quicken. "Now, for a Spaniard who goes to France or Germany or Italy and wants to compare prices, it will be like being at home. That has very important political and social consequences."

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