Debut of Euro Marks a Major Currency Event

Nine days from now, visitors to Europe will find themselves in a grand economic experiment. On Jan. 1 the Continent will begin putting new euro coins and bills into circulation. And in about two months, the Italian lira, the French franc and the currencies of 10 other Western European nations will be kaput, if everyone keeps to schedule.

The euro, designed as a universal currency for Western Europe, is the most radical part of a decade-long effort to unify the Continent, which has also reduced customs and passport controls there. Since 1999, electronic transactions involving credit cards and banks have generally been recorded in euros. But on Jan. 1 the coins and bills make their first appearance.

In the long run, despite transitional trauma, the euro should make it easier for Americans to travel in Europe, experts agree. We will no longer have to convert currencies when crossing from, say, France to Italy. And because the euro, so far, is close in value to the dollar (about 1.11 euros to $1, as of last week), even the math-challenged can estimate prices. No more multiplying by 2,000 or so to get the Italian lira equivalent of the U.S. dollar.

Some questions that may be on your mind, especially if you’re traveling soon:

Question: Which nations will use the new currency?

Answer: Not everyone in Western Europe is joining in. The participating countries are Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Spain and Portugal. Also on the roster: Vatican City; the principalities of Andorra and Monaco; the republic of San Marino; and several island territories, such as the Azores (Portugal); Canary Islands (Spain); and France’s Guadeloupe and Martinique islands in the Caribbean.

So far, European Union members Britain, Denmark and Sweden have declined to adopt the euro, largely because of concern that relinquishing their own currencies will erode national sovereignty. Countries outside the EU, such as Switzerland, Norway, Iceland and all of Eastern Europe, are also keeping their own currencies.

Q: What is the currency like?

A: For a sneak preview, visit the Internet sites of the European Travel Commission, www.visiteurope.com (click on “The Euro Gets Real”), or the European Central Bank, www.euro.ecb.int, which post photos of them.

The bills, featuring images of windows, gateways and bridges, come in seven denominations: 5, 10, 20, 50,100, 200 and 500 euros. As the value increases, so does the size; different values are printed in different colors.

One side of each coin is embossed with a European map and other symbols, and the other has individual national symbols (such as the Celtic harp for Ireland). The coins are issued in 1- and 2-euro values, plus 1, 2, 5, 10, 20 and 50 cents. Generally, the greater the value, the heavier the coin.

Q: When will merchants in Europe stop accepting the national currencies?

A: Here’s where we enter uncharted territory. Officially, merchants in most participating nations are supposed to accept the old money through Feb. 28, then accept payment only in euros starting March 1. Some nations have set earlier cutoffs: Jan. 28 in the Netherlands, Feb. 9 in Ireland and Feb. 17 in France.

These deadlines were posted as of the Travel section’s press time Tuesday but may have changed since.

“Everything is in flux,” said Neil S. Martin, spokesman in New York for the European Travel Commission, an organization of 31 national tourist offices. “We wonder if even Feb. 28 is a final date.”

The uncertainty is partly the result of different rules in each of the 12 nations on how long banks will redeem local currency. Some will allow it for a few months or even years after March 1, some indefinitely. Thus a shopkeeper presumably could accept payment in local currency after March 1, then go to a bank and exchange it for euros, Martin said.

“I’m sure if someone wants to buy something for 50,000 francs [about $6,800], they won’t be turned down” after March 1, said Anne Volpert, spokeswoman for the French Embassy in Washington, D.C.

Q: Can I buy euros in the U.S. before leaving for Europe?

A: Yes. Several banks and currency exchanges I contacted said they didn’t expect to have the euro available until Jan. 2, the first business day after the transition, at the earliest. However, that could change. ICE Currency Services, which operates exchange businesses at LAX and nine other U.S. airports, expects to have the euro by noon Jan. 1, Koko Sarkari, its chief operating officer in the U.S., said last week.

Euro traveler’s checks are now available from American Express, Thomas Cook and other outlets.

Not having euros before your trip should not be a crisis, experts say. As with any currency, you can exchange U.S. dollars for them in Europe at airports, banks and other sites. Automated teller machines in Europe also can issue euros, drawing on your U.S. bank account, although there may be glitches at first. (See below.) And the local currencies will still be usable for a couple of months.

Q: Will things cost less with the euro?

A: Probably not, especially at first. It’s true that the U.S. dollar is worth more than the euro. But because exchange rates for currencies in the 12 nations have been fixed against the euro since Jan. 1, 1999, the changeover should make no difference--in theory. (These rates are posted at www.visiteurope.com and www.euro.ecb.int.)

I say “in theory” because there have been reports of shopkeepers rounding prices up when converting to the euro, sometimes by “more than a few cents,” the European Travel Commission’s Martin said. “Initially, things may cost a little bit more,” he added. In the long run, though, the euro should push some prices down by sharpening competition, experts suggest. It also will make it easier for travelers to compare, for instance, the price of a belt in Italy to the price in France.

Q: Will I be able to use ATMs in Europe to get the new currency? Will there be lines at cash registers?

A: Martin sees automated teller machines as “the single biggest bugaboo of the changeover.” Although many of the tens of thousands of ATMs in Europe had been retooled for euros by early this month, some hadn’t. In one survey, 83% of European banks said they expected to have their ATMs converted to euros by Jan. 1, and 98% within a week after, said Christopher Matthews, spokesman for the European Commission, the executive branch of the European Union.

As for lines, trial runs suggest wait times will grow “appreciably,” at least initially, Matthews said. “Stores plan to have a lot more people working the cash registers in the first two weeks” to help smooth the transition, the French Embassy’s Volpert added.

Q: What should I do with my outdated European currencies?

A: In the U.S., you should be able to exchange your bills for euros or U.S. dollars for some time after Jan. 1, but it’s not clear for how long. Two currency exchanges I contacted indicated they expect to buy the older bills for several months but had set no cutoff. In Europe, the time limit for redemption varies by nation, from several months to indefinite.

Coins are a different matter: Exchanges generally don’t convert them. But through Feb. 15, coins and small notes from the 12 nations adopting the euro can be donated to the Twin Towers Fund, managed by the city of New York to aid victims of the Sept. 11 attacks. Send to Euro Currency Project, care of the Bank of New York, 235 Main St., White Plains, NY 10601.

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Jane Engle welcomes comments and suggestions but cannot respond individually to letters and calls. Write Travel Insider, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012, or e-mail jane .engle@latimes.com.