Germans Mark Days to Euro’s Arrival

Not much unites the German people, but the approaching arrival of the euro currency has just about the entire nation grousing in harmony.

Even supporters of the ambitious project to replace 12 national currencies in Europe with a single legal tender are complaining about the costs and gritting their teeth over expected troubles when the new notes and coins come into circulation in about a month.

The clamor in Germany conceals what to date has been a fairly smooth “front loading”--the delivery of cash to 50,000 banks across the country and its distribution to those among 400,000 retailers who want the money on hand ahead of its Jan. 2 release.

Contrary to the hand-wringing over security risks and claims of poor preparation, only one armored-car robbery has been reported since the front loading began in early September. The training of bank tellers and sales clerks is proceeding apace.

“About 80% of businesses are already in good shape,” said Jan Holzweissig of the Berlin Retailers Assn., who predicts that the rest will be ready on time. He concedes that there will be the odd corner store or small service provider not yet flush with euro when businesses reopen after the New Year holiday but says that the vast majority are exuding Germany’s renowned commitment to efficiency and order.

To hear the average citizen tell it, though, Armageddon awaits.

“No one has a good attitude about giving up the deutsche mark,” lamented Christel Lenk, a 69-year-old homemaker who fondly recalls the sturdy currency’s 1948 introduction in place of the weak reichsmark and the Wirtschaftswunder, or economic miracle, that followed.

Germans are probably the most skeptical residents of the euro zone, which also includes Austria, Belgium, Finland, France, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal and Spain. Germans have enjoyed what has long been the most reliable monetary system on the Continent and one that has created the world’s third-biggest economy, behind those of the U.S. and Japan.

A survey in October of 6,567 Europeans by polling organization Emnid showed that German respondents have the most negative attitude toward the change and are the least informed about the value of the euro in relation to their national currency.

But the European Union commissioner for monetary affairs, Pedro Solbes, notes significant progress as a result of the $73-million public relations campaign aimed at easing the impending transition. According to the Emnid poll, commissioned by the EU, 46% of the respondents in the zone didn’t know at the start of this year that the new currency would be in circulation after Jan. 1, but only 6% remain uncertain of the date.

Another poll, commissioned by the German government, reflects the odd mix of reluctance and engagement that characterizes the country’s approach to the euro. Although 68% of the 2,013 Germans questioned said they didn’t want a new currency, 93% acknowledged they were getting it anyway and most said they felt well-informed about procedures.

In fact, German consumers don’t have to do much to get ready. Bank employees have been told that they’ll be on duty through the New Year’s Eve holiday to stock cash machines and exchange booths for the switch.

As is the case in all nations of the euro zone, Germans will be able to spend their national currency for the first two months and get change in euro. Even after March 1, retired currencies will be indefinitely convertible for euro, but banks will be allowed to charge a small exchange fee.

Giant posters that show seven new bills and eight coins hang in banks, train stations, subway stops and grocery stores to familiarize consumers with the new money.

Major retailers, from Berlin’s KaDeWe department store Wal-Mart, have begun to teach employees how to check for counterfeit bills.

A third of the new currency is being distributed in Germany, where cash is still king and credit rarely used. Retailers have been complaining for months that they will have to shoulder a disproportionate share of the costs for conversion, estimated by the European Central Bank to be about $45 billion for the euro zone. Because German wages are higher than elsewhere in the region and the demands for cash on hand far greater, businesses are having to take out extra insurance and spend more on vaults, alarm systems and armored car transports.

Those complaints have given rise to fears that prices will go up to compensate retailers.

“Every participant is trying to shield himself from the costs,” conceded Kathrin Pingel, head of euro affairs for the National Assn. of German Retailers. “Banks are in a stronger position to pass on these costs because they have the money and everyone else wants it.”

Consumers can help defray the costs if they work through their marks ahead of Jan. 2, say those overseeing the transition. If they instead dump large bills on businesses during the first days, stores will have to keep huge sums of cash on hand to make change.

“The bedrock of the German economy is what we call the BMWs--not the luxury car maker but the bakers, butchers and barkeeps,” said Andreas Goralczyk, a department head for the Federal Assn. of German Bankers, referring to businesses whose German names begin respectively with B, M and W. “Each one of them will have to have five to eight times the normal amount of cash on hand daily to make change in the first days, which means about 40 times the usual cash volume for the first week. This presents huge problems and potential costs for small businesses.”

Even ahead of the transition, retail prices are rising slightly, said Maren Geisler of the Federal Assn. of Consumer Groups. The watchdog agency found prices were marked up beyond the exact mark-to-euro conversion on 17% of products recently surveyed.

“We’ve distributed a brochure to retailers explaining the proper way of rounding off prices, but it’s only advisory, and many consumers fear this is an opportunity for businesses to recover some of their costs,” Geisler said.

That is the primary worry of Germans and one that is not abating with the grudging acceptance.

“The stores are already hiding price hikes with these new signs in euro,” said Lenk, the homemaker, referring to prices now marked in both marks and euros.