Fears grow of euro cash launch chaos

Date: 31/05/01

By John Shelley

MEPS are warning that euro-zone states are nowhere near ready for the launch of the new single currency notes and coins next January and insist urgent action is necessary to minimise disruption.

The assembly's rapporteur on the subject, Dutch Liberal Jules Maaten, fears long queues and safety problems in the first days of 2002 and greater risks of counterfeiting and fraud unless small denomination notes are issued before 1 January. The European Central Bank has banned the supply of notes to the public, even in the last days of 2001."The European Parliament can no longer understand the stubbornness of the ECB in refusing this step," says

Maaten. "Most of their arguments are dubious. We are sure the benefits of front-loading will largely outweigh possible drawbacks."

In his report, discussed by the Parliament's economic and monetary committee for the first time this week, Maaten says that no matter how the changeover ultimately turns out people will be left with a lasting memory of the first few days of the new hard currency.

He says it is vital to make sure that the introduction of the 239,000 tonnes of coins and the notes which would span 1.9 million kilometres - or five times the distance from the earth to the moon - is as smooth as possible."Should serious problems occur, it might expose the entire European project to criticism. The stakes are high and there is no time for complacency," he said. "The next meeting of the euro-group ministers of finance must put these issues on their agenda."

The report states that so far the Union's information campaigns have been largely fruitless in prompting the use of the euro among consumers and companies.

"A general atmosphere of benign neglect has reigned among policy makers towards the introduction of euro notes and coins, downplaying this event as a mere technicality," says Maaten. "It isn't. It directly involves 300 million citizens."

He also expresses concern at the state of preparation of small and medium sized enterprises and of local authorities. Already computer software companies fear that many SMEs and local administrations will wait until the second half of this year before taking action. By then there will be insufficient capacity among software firms to help them, he warns.

Maaten proposes a list of actions which the union must take now, with many geared towards helping retailers who he says will bear the bulk of the cost of the euro changeover. The report also urges member states to round down administrative fees, fines and social support payments, to the benefit of consumers.

The economic and monetary committee is due to vote on the Maaten report on 18 June, the full Parliament is due to approve a final version of the paper in July.

MEPs are warning that euro-zone states are nowhere near ready for the launch of the new single currency notes and coins in January 2002 and insist urgent action is necessary to minimise disruption.