Delors: euro must still be given time to prove itself

Date: 10/01/02

By Martin Banks

Former Commission President Jacques Delors has warned that it is still too early to say that the euro will be an unqualified success and that it must be given time to prove itself.

Delors, the man widely credited with being the prime architect of the single currency, said the euro had made a good start but added: 'The monetary and economic union does not yet stand up completely on its two legs. The monetary leg is doing well but the economic leg is still imperfect.'

By this weekend, the euro is forecast to have all but wiped out legacy currencies.

Already more than three-quarters of all cash transactions are now being conducted in euros with all ATM cashpoint machines now converted across the 12-nation eurozone.

In Greece and the Netherlands, more than 85 of transactions are being completed in euros, while Germany, Austria, Finland, Portugal and Ireland are not far behind.

While the largest currency changeover in history has gone smoothly so far, a few teething problems have inevitably cropped up.

There has been a shortage of small-denomination euro notes and coins in shops while public phone boxes, parking meters and vending machines in many countries have still not been converted.

But Pedro Solbes, EU commissioner for monetary affairs, said he expects all will have been converted by the second half of this month.

The Commissioner says he is 'extremely satisfied' with the roll out of euro cash and predicts that by this weekend 90 of all transactions should be taking place in euros.

Wim Duisenberg, president of the European Central Bank, admitted that there had been and would continue to be minor glitches, but the problems would be limited 'in time and in scope'.

The value of national banknotes in circulation within the eurozone has dropped 18 to €220.7 billion since 1 January, says the ECB.

Consumers in most eurozone states can use their old currencies for up to two months. So far, no cases of counterfeit notes have been reported.

Elsewhere, the political implications of the euro - the EU's most ambitious integrationist policy - were being mulled by those changing their cash.

Its relatively trouble-free launch has also led to a higher external value of the currency on the international currency markets - although the euro is still well below its initial value when it was introduced in 1999 in its electronic form.

This week, it reached a two-year high against the yen and ended nearly 0.90 against the US dollar for the first time since 11 September.

The launch of the euro will intensify the argument over the new currency in the three EU countries - Denmark, Sweden and the UK - which have not adopted it.

Meanwhile, the euro's effect is being felt well beyond its borders. It is now the official currency in Kosovo and Montenegro and French overseas territories, from Martinique in the Caribbean to the Reunion in the Indian Ocean - the first place to use the euro.

Former Commission President Jacques Delors has warned that it is still too early to say that the euro will be an unqualified success and that it must be given time to prove itself.

http://ec.europa.eu/comm/economy_finance/euro/our_currency_en.htm http://ec.europa.eu/comm/economy_finance/euro/our_currency_en.htm

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