Brussels (dpa) – Having launched their single currency amid much euphoria 18 months ago, eurozone policymakers are now wringing their hands over the euro.
Robust economic news from euroland has yet to boost the European currency’s lacklustre performance on foreign exchange markets, so that at the moment the euro has lost almost 19 per cent of its value against the dollar since its launch rate on January 1, 1999.
Now, eurozone movers and shakers have a new concern: despite the scheduled historic switchover to euro notes and coins on January 1, 2002, many of the bloc’s 300 million citizens seem almost indifferent to the single currency.
Even more worryingly, say officials, despite repeated warnings by governments and banks, small and medium-sized companies are lagging behind in preparations for the “physical euro’s” introduction.
“The introduction of the euro is seen as too remote,” French Finance Minister and current head of the 11 eurogroup of nations, Laurent Fabius, said recently.
“We need to relaunch the whole process of public awareness of the euro,” stressed Fabius.
European Commission officials in Brussels are equally adamant that governments, banks and consumer organisations must work harder to increase public interest in the euro.
“We still have quite a way to go before all consumers feel at ease with a change of coins, notes and prices at the beginning of 2002,” European Consumer Affairs Commissioner David Byrne warned recently.
“Understanding pricing practices and learning to think in euros will take people longer than the very short period of dual circulation in early 2002,” Byrne cautioned.
“We do not want shoppers feeling disoriented or suspicious,” he warned.
Consumer apathy apart, eurozone monetary specialists are also worried that only 50 per cent of small European businesses appear prepared for euro usage.
Many mistakenly believe that they will be allowed to deal in national currencies until July 2002, thereby delaying utilisation of the euro for invoicing and accounting.
But the European Commission has warned that the change-over must take place on January 1, 2002 and that preparations for using the euro must start now.
The warnings are having little effect, however. Recent opinion polls show a 2 per cent drop in public support for the currency, with the number of people favouring the final move to the currency declining by 10 per cent in Austria, 8 per cent in the Netherlands and 5 per cent in Germany.
“Citizens still face a lot of uncertainty with regard to the specifics of the changeover,” concedes European Monetary Affairs Commissioner Pedro Solbes.
The Commission insists that public attitudes towards the euro are not coloured by the currency’s weakness. And even they are, buoyant economic growth in the eurozone – expected to overshoot 3.4 per cent this year – will soon put this right, they say.
“The euro area is set for a long and strong expansion,” the International Monetary Fund also confirmed in a recent report.
The Commission will be stepping up euro information campaigns in the autumn, encouraging more and more retailers to show prices in national currencies and the euro in the coming months.
Solbes plans to accompany domestic action with moves to make the euro more popular on the international front.
The euro’s use as a reserve currency by central banks remains modest as does its utilisation in international trade.
However, the euro is running neck and neck with the dollar as the debt market’s currency of choice.
The commission estimates that 360 billion euros’ (334 billion dollars) worth of bonds were issued in the first quarter of the year, with governments and companies in Europe, Asia and North America emerging as the most enthusiastic users of the European currency.
