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EU nations participating in "Euroland" include Austria, Belgium, Finland, France, Germany, Holland, Ireland, Italy, Luxembourg, Spain and Portugal. The euro will also be adopted by Monaco, which now relies on the French franc. Opting out at this time are EU members Britain, Denmark and Sweden. Greece hopes to qualify in the near future.

The value of the euro has been made equal to that of the European Currency Unit, little-known to U.S. travelers. However, the ecu "basket" includes the British, Danish and Greek currencies, which will not be reflected in the euro; and does not include the Austrian and Finnish currencies, which will be. Thus the euroís value may lurch somewhat after its Jan. 1 inauguration.
 



The Coming of the Euro

On Jan. 4, 1999, the euro comes to life as the single currency of 11 nations in "Europeís single most daring venture of our time," according to Jacques Santer, president of the European Union. The euro will cover nearly 300 million people and a vast economy comparable to that of the U.S. It is now projected to trade at roughly $1.17, give or take a few cents.

EU nations participating in "Euroland" include Austria, Belgium, Finland, France, Germany, Holland, Ireland, Italy, Luxembourg, Spain and Portugal. The euro will also be adopted by Monaco, which now relies on the French franc. Opting out at this time are EU members Britain, Denmark and Sweden. Greece hopes to qualify in the near future.

But because the euro will not immediately replace national currencies, American visitors will experience relatively little impact over the coming year. All transactions with paper money and coins will continue in national currencies through Jan. 1, 2002; only then will euro notes and coins be issued. During the three-year transition period, the euro will be limited to electronic transactions. Some more specifics on what to expect during the transition period:

  • When you exchange dollars for notes or coins, you will still receive francs, marks, lire, etc., in return. The value of these national currencies will be fixed to the euro, and will be close to what they are today. Their exchange value versus the dollar will be determined by dollar-euro fluctuations. Thus, if the euro declines 4 percent versus the dollar, the franc, mark and lira will also decline 4 percent versus the dollar. The euro and the participating 11 national currencies will also fluctuate in tandem against all other currencies, such as the non-participating British pound and Swiss franc.
  • When you exchange one of the 11 national currencies for another, the rate will NOT fluctuate. As of Jan. 1, 1999, when these currencies are fixed permanently to the euro, they will also be fixed vis-a-vis each other.
  • You will find many prices posted in BOTH national currencies and in euros. This is intended mainly to acquaint Europeans with the value of the euro during the transition period. Again, all purchases with paper notes and coins will be in the national currencies. Travelerís Checks and Charge Cards: Several companies plan to add euro travelerís checks to their offerings. You would be able to exchange them for bank notes in national currency or make purchases directly, with any change coming to you in national currency. Also, credit-card purchases could be charged directly in euros (it will be up to the seller). The credit-card company would then convert the euro charge to dollars on bills you receive back home.
  • Comparison shopping from country to country will be much easier. Some analysts believe this will tend to push up prices in less-expensive regions and to push down prices in the high-cost areas.
The euro alone in 2002
With the inauguration of euro notes and coins on Jan. 1, 2002, U.S. visitors would begin receiving only euros when exchanging dollars in banks and at ATM machines, although they will still encounter national currencies in transactions with individuals and businesses. Withdrawal of francs, marks, lire, etc. will begin Jan. 1, 2002, to be completed by July 1, 2002.

At that date, the euro will stand alone in the 11 participating countries, just as the dollar stands alone in the 50 American states.

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