BERLIN (dpa) – E-Day is fast approaching. But with only a matter of weeks to go before the launch of euro notes and coins, Germans still appear sceptical about the benefits of sacrificing their beloved mark to the cause of European monetary union.
Opinion polls continue to show that about half the German population are reluctant to allow the mark, which they see as a symbol of the country’s post-war economic fire power and financial stability, to be finally replaced by the euro on January 1.
Creation of the mark in 1948 was one of the major early steps in rebuilding post-war Germany, which has since emerged as modern Europe’s biggest economy. Now more than three-quarters of Germans fear that switch to the new euro cash will result in price rises.
Launching a new campaign this month to promote the euro, German Finance Minister Hans Eichel declared: “Acceptance of the euro is rising and scepticism is on the wane.”
The problem, however, for Germany’s political leaders in closing the gap between the views of the nation’s ruling elite and the wider population on the euro’s merits, is that the campaign promoting the currency has entered its final stage just as the public has been distracted by the terrorism crisis.
Indeed, the countdown is now underway to what is considered to be the biggest currency exchange in world history when more than 14 billion euro banknotes and 50 billion coins replace 12 national European currencies.
But Germans have already been through the trauma of at least three major currency changes and economic upheavals during the last century, which has added to their scepticism about monetary union and fusing the mark with other European currencies to form the euro.
This is particularly the case with those living in eastern Germany, which has emerged as one of the most euro-sceptical regions among the 12 nations now sharing the euro. Polls show that only about one-quarter of east Germans like the idea of the common currency.
After all east Germans saw having German marks in their pockets as a key part of changes unleashed by the breaching of the Berlin Wall a dozen years ago.
But the real test of the new money is likely to be in the forex market, with hopes appearing to fade of a euro rally to accompany the run-up to the changeover to the euro so as to ensure that the final stage of currency union gets off to a good start.
With the mark once considered one of the world’s strongest currencies, the euro’s decline since its launch in January 1999 has only served to compound concerns in Germany about sacrificing the mark for what could be a much weaker currency.
At its introduction almost three years ago, when those nations joining the euro linked their exchange rates, the euro was worth 1.18 U.S. dollars.
But since then the euro has suffered an almost uninterrupted decline, with the fledgling currency being hit by a rapid flood of funds out of the eurozone and into what were perceived to be the more growth-oriented and flexible investment markets of the United States.
In October 2000, the euro slumped to a record low of 82.50 U.S. cents, with the European Central Bank forced to intervene to prop up the struggling currency.
More recently, signs that the U.S. economy risked sliding into recession have helped to underpin the euro with September 11 giving the common currency a new firmer sense of direction, which surged above 91 cents in the immediate aftermath of the terrorist strikes.
The euro has, however, come under renewed pressure in recent weeks as the ECB and the forex markets have battled it out over the pace of rate cuts with many economists insisting that further reductions in borrowing costs are necessary to shore up eurozone growth.
Furthermore, with a national election in Germany set down for September 2002 and the chances of a German economic rebound fading, the euro could face the risk of being caught up in the political debate about the state of the economy in the build up to the poll.
