First Euro Notes Unveiled in Countdown to E-Day

The European Central Bank offered a glimpse of the new euro common currency Thursday for the 300 million people who will be using it in just four months--a move aimed at bolstering confidence in the fledgling currency as it stages a minor comeback against the dollar.

The Frankfurt, Germany-based ECB also lowered the 12-nation euro zone’s key interest rate for the second time this year, compared with the seven cuts by the U.S. Federal Reserve likewise intended to make borrowing easier so consumers will spend their way out of a global recession.

The unveiling of the seven colorful new bank notes marks the start of the ECB’s hearts-and-minds campaign to win the many Europeans reluctant to give up their trusted national currencies and worried about being defrauded by counterfeiters and swindlers.

“Feel--Look--Tilt” is the three-step test Europeans are being advised to take to become familiar with the new bills and their unique texture and security features. Each bill carries a hologram bearing its denomination, as well as a watermark and metallic security thread.

Many Europeans remain dubious about the cash changeover Jan. 1, when they must surrender the sturdy deutschemark, the tried-and-true franc and 10 other currencies for one that has dropped from $1.18 shortly after it was introduced for banking purposes in 1999 to as little as 82 cents in October.

But the euro has gained back about 10% of its worth against the greenback over the last two months. ECB governors are hoping public opinion is turning as they enter the logistically daunting home stretch toward E-Day.

Fearful of providing counterfeiters with too much detail about the new coins and bills, the ECB had kept the visual and security details secret until the Frankfurt news conference, at which bank President Wim Duisenberg also announced the quarter-point cut in the benchmark interest rate, to 4.25%.

Some economists and government finance officials had been pushing for a rate cut for months to lift slumping growth in the euro zone, especially here in Germany, which accounts for a third of the common market economy.

The ECB has been more hesitant than the Fed to lower interest rates because it also is charged with guarding against inflation as it monitors economic growth. Inflation reached an eight-year high of 3.4% in May because of rising energy prices and skyrocketing food costs resulting from recent outbreaks of livestock diseases.

Only last month did inflation cool enough to allow the central bank to feel confident about price stability, Duisenberg said.

Despite long-standing pressure for the move to ease borrowing, markets reacted negatively. Trading fell more than 2% on the Frankfurt DAX stock exchange, and the struggling, technology-heavy Neuer Markt index lost more than 7% of its value.

Offering Europeans a look at the new bank notes, albeit through TV cameras, served as the starting gun for a media campaign to win euro zone consumers. Polls in several member countries show persistent opposition to the impending cash swap.

In Germany, for instance, only 53% of respondents in the latest polls said they were happy about getting the euro in place of the deutschemarks that were introduced in 1948 and brought them the “economic miracle” years after World War II devastation.

Duisenberg also unveiled the first of a series of TV promotions, in which the euro’s arrival is portrayed as a historical event of the same magnitude as the fall of the Berlin Wall and the Apollo moon landing.

The ECB news conference was broadcast live on several all-news channels in the euro zone, but few were at home in midafternoon to watch it.

Most Europeans, even euro opponents, have taken a wait-and-see attitude toward the new money that soon will be their sole legal tender.

“I’m rather skeptical, as the deutschemark has always been such a stable currency and no one can imagine that the euro will be able to pull itself out of its current morass,” said computer operator Michael Winterfeld of Siegburg, near Bonn.

Others say they are trying to look on the bright side.

“Getting the euro is really not a bad thing. We travel a lot, and it will be a lot easier not having to exchange currencies at each place, and prices will be a lot easier to calculate,” said retired engineer Edgar Mueller of Bonn.

But he complained, as do many throughout Europe, that merchants are using the impending switch as an excuse to raise prices.