Europe Braces for E-Day, When Change Comes to Almost Every Pocket

A nondescript warehouse the size of two soccer fields illustrates the immense challenge awaiting Europe in just 10 months.

The Royal Dutch Mint needs that much space to store its 2.8 billion shiny new euro coins, stacked no more than three crates high lest the building start sinking into the ground.

And that’s just the pocket change for one little corner of the continent.

For the past two years, the European Union’s single currency has existed only as a blip on currency trading screens or an extra figure on price tags for shoppers wanting to practice their conversion skills.

All that changes New Year’s Day when euro notes and coins become legal tender in 12 of the 15 European Union countries--the latest and biggest step yet in the continent’s long, slow march toward unity.

Almost 300 million Europeans are giving up one of their most potent symbols of nationhood--their francs, marks, drachmas, pesetas, punts, lire, guilders, escudos, markkaa and shillings--in exchange for something new and untested.

Scary scenarios abound. A recent simulation at Amsterdam’s central train station showed that on Jan. 1 the line for tickets would be 1,200 strong by the end of the day, with clerks fumbling on their calculators.

“I doubt very much whether passengers would actually queue quietly for so long at the ticket counters,” EU Monetary Affairs Commissioner Pedro Solbes said recently. “But the problem is real.”

Yet most Europeans are greeting the switch not in panic but with a mix of anticipation and resignation.

“That’s the way it goes. It’s evolution,” Hans van Bemmel, owner of a medical supply shop near Amsterdam, said at a “euro readiness” seminar sponsored by the Dutch central bank. “There are no borders anymore.”

Surveys still show an underlying unease in many countries over the perceived loss of national sovereignty a common currency represents--as evidenced last fall by Denmark’s vote to stay out, along with Sweden and Britain.

Making the switch are Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal and Spain.

Those driving the project forward say there’s no turning back. Failure, they say, could tear apart the ever-tightening union that European leaders have been forging since the end of World War II to ensure peace and prosperity on the continent.

“It’s an inexorable part of the integration of Europe,” says British historian Kenneth Dyson, an expert on monetary union. “That’s an important reason why European political leaders will prioritize making it work.”

A Move That May Morph Identity

Europeans see a common currency as the logical next step for a single market that began after the war with six countries pooling their coal and steel industries. It has grown to 15 member states with common policies on everything from agriculture to e-commerce.

The euro is intended not just to make life easier for travelers, who won’t have to change money every time they cross a border, but to bolster Europe’s financial clout in a dollar-dominated world and help its businesses compete in the globalized 21st century.

Psychologically, it’s also a huge leap toward tighter political union, and not just because governments have to coordinate their fiscal policies.

“Sharing a currency is one basis in which a shared identity emerges,” Dyson says. “It’ll be very interesting to see what the effects of that are.”

First, though, the challenge is to get people’s attention when the more immediate worry is the spread of mad cow and foot-and-mouth diseases that are devastating Europe’s meat industry.

The EU’s own surveys show many Europeans still have only a vague idea about the timetable for “e-day.” What they have heard has been mostly negative because of the euro’s poor performance since its introduction on Jan. 1, 1999.

After debuting at just under $1.18, the euro lost as much as 30% of its value against the dollar, largely because Europe looked weak next to the booming United States. With the recent U.S. economic slowdown, the euro has begun a modest recovery, but it’s still down more than 20% at about 93 cents.

To stir up interest, there are euro road shows setting up tents in town after town to teach people how to recognize the new bills and coins--and the expected fakes. Ad campaigns range from Ireland’s witty “The change is in your pocket” to Germany’s earnest “Real values will prevail.”

The European Central Bank this month unveiled its own $73-million publicity blitz, including a Web site, TV ads to begin in September and a mass mailing of 200 million leaflets in November.

When Jan. 1 dawns, “people must not have the impression that they are waking up in a foreign country,” Solbes told university students at a euro event last month.

From multinational conglomerates to the corner bakery, businesses deemed slow to get ready are feeling the heat from politicians.

“The situation, from my point of view, is still not satisfactory,” French Finance Minister Laurent Fabius said last month as he released a study showing 42% of French businesses with 500 or more employees had not even begun to prepare.

Conversion by the Ton

Starting next year, all bookkeeping, billing and tax payments must be done in euros, even if a company does zero business abroad.

Stores will have to give change in euros, although customers will be able to pay in old currency for up to two months, depending on where they live.

European mints and print shops have added emergency shifts to produce the 15 billion notes and 50 billion coins needed to fill the tills and vaults. That’s 250,000 tons of coinage--more metal than 35 Eiffel Towers--and, laid end to end, enough paper bills to circle the equator more than 50 times.

Tons of nickel and copper blanks have been imported from the United States, Chile, South Africa and even the Royal Mint in Britain--the EU country that’s been the most vehement about staying out.

Troops and military vehicles will be mobilized to move the cash to central banks and ATMs by e-day--and haul back the mountains of old national currencies as they are pulled from circulation to be melted down or shredded.

“It’s the greatest logistical effort in peacetime” for Europe, says Otmar Issing, the European Central Bank’s chief economist.

Getting people to change how they picture money is even more difficult. Ask the man from the Dutch central bank how much all those coins and raw material in his warehouse are worth, and he answers in guilders. Why doesn’t he give the euro figure?

“That’s still a problem,” Willy Dassen laughingly admits. “I have to start too.”

European Central Bank’s euro site: https://www.euro.ecb.int