More than 300 million Europeans adopted the euro as their common currency today, finally fulfilling calls for greater unity and integration by putting their money where their mouths are.
The long-awaited E-day arrived with much fanfare and self-congratulation, although it was hard to tell how much of the celebration was over the shiny new coins and colorful bank notes and how much was due to the traditional New Year's fireworks and revelry in the 12 participating nations.
Outside the European Central Bank here, the birthplace of the euro, pyrotechnics, ear-splitting explosions and a pall of smoke greeted 2002 and the advent of the world's second-largest monetary system after that of the U.S. From Helsinki in Finland to the Canary Islands, concerts heralded the euro and sound-and-light shows illuminated giant replicas of the coins and bills. The Pont Neuf in Paris, the oldest bridge in the City of Light, was illuminated with the euro's predominant color, blue, and adorned with national flags along its dozen arches.
While many Europeans continued to bemoan the loss of their trusted national currencies--especially in Germany, where the sturdy mark has been a symbol of stability for half a century--the euro enjoyed a modest rise in popularity amid the final countdown.
"It's a bit tragic," said Manfred Obels, a salesman waiting his turn to collect euros shortly after midnight at a Dresdner Bank cash machine. "We'll miss our marks, although I guess this is for the good of Europe."
Euros have been edging their way into continental consciousness for three years now, as exchange rates among the states were fixed with the Jan. 1, 1999, launch of the "virtual currency." The European Central Bank has controlled interest rates throughout the euro-zone since then, bank balances have been appearing in both currencies, and billions in euro-denominated stocks and bonds have been traded during the changeover.
But actually getting the money into their hands was a signal event for Europeans and the world's largest exchange of currency. Revelers lined up at automated teller machines at the stroke of midnight to get their first infusions of the 14 billion bills that had been withheld from the public to prevent counterfeiting and confusion. It took at least 10 minutes for most of the ATMs to load their new programs, but customers were getting their money in time to pay in euros for the last rounds of champagne and mulled wine.
The first of 52 billion coins minted for the cause began reaching euro-zone residents two weeks ago, when banks sold "starter kits" to get consumers used to the look and feel of the new money. More than 450 million of the eight-coin packs were sold for the equivalent of about $10 each--twice as many as euro planners had calculated and a sign that citizens were warming to the new money.
While economists and political leaders have been trumpeting the common currency as the crowning event in the creation of a powerful new economic bloc, the citizens of the larger euro countries have been decidedly less enthusiastic. The latest polls in Germany, the most populous and powerful of the euro states, have shown two out of three respondents still opposed to giving up their marks. In France, 55% of citizens are mourning the loss of the franc. Even in Greece, one of the countries expected to benefit most from the euro, half those surveyed Friday by the Greek Federation of Retailers said they were not yet ready for the euro.
Sharing a monetary instrument is expected to deepen the integration of European Union member states that began 50 years ago with the first, six-nation bloc coordinating coal and steel trading. Not only will euro-zone residents enjoy the convenience of using the same money wherever they travel within the region, but the Stability and Growth Pact aims to ease coordination among the countries' economies and to curb debt and inflation.
European economic stewards are hoping the euro will enjoy a resurgence now that it is a physical part of daily life. The currency has lost more than 20% of its value vis-a-vis the dollar since its introduction three years ago, falling from $1.17 to about 88 cents.
Hailing "this little bit of united Europe we now hold in our hands," EU Executive Commission President Romano Prodi said the 660 billion euros created--$580 billion worth--give Europeans a new identity and more clout in global financial affairs.
"To have the same currency is not just an economic decision, it's a political decision," Prodi said. "You have to harmonize many behaviors, organize decision-making processes in case of a crisis in one of the countries or erratic shocks."
Prodi and others reminded Europeans of the debt of gratitude they owe the euro's early proponents, notably former German Chancellor Helmut Kohl and the late French President Francois Mitterrand.
"Our money will be a true catalyst for integration," European Central Bank President Wim Duisenberg told journalists.
The euro's reach actually extends far beyond the member states--Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. Three other EU nations--Britain, Sweden and Denmark--have opted out of currency union for the time being, but much of their business will be transacted in euros and they are expected to eventually join. The Yugoslav republic of Montenegro and Kosovo, a province of its fellow republic, Serbia--where marks were legal tender--will now use the euro, as will colonies and territories of EU states ranging from French Guyana to the Indian Ocean island of Reunion. Andorra, San Marino, Monaco and Vatican City, as EU stepchildren, will also be euro states.
Preparations for swapping out the national currencies intensified in recent weeks, with vendors of soft drinks, snacks, transport and parking tickets racing to retool their dispensers to take the new coins and bills.
European Central Bank planners estimated that 70% of the euro-zone's 170,000 ATMs were ready with euro cash by midnight Monday. Coca-Cola alone had to adjust 288,000 vending machines, and Germany's 830,000 cigarette dispensers were all ready to accept both marks and euros.
The changeover has cost banks and businesses billions, but the euro has also been a boon for many. Charities and aid organizations like the Red Cross, Doctors Without Borders, Oxfam and land-mind awareness groups set up collection boxes at airports and train stations to gather small coins from consumers who didn't want to bother to trade them. Manufacturers of cash-register tills and wallets designed to accommodate the euro also cashed in. The Irish Independent reported that bus passengers outside Dublin could get free rides if they didn't have the exact change on E-day, since drivers had warned that their new cash dispensers didn't have enough slots for the coins.
Both euros and the national currencies will be accepted during a two-month transition period, but European Central Bank analysts expect 95% of transactions to be conducted in euros by mid-January.
In some countries like Portugal where ATM withdrawals are without commission, consumers tend to take out only small amounts of cash on a daily basis so are unlikely to have huge amounts of escudos they need to get rid of. Credit card use is also expected to rise, even among cash-oriented Germans, as a way of avoiding confusion until consumers are more comfortable with the euro.
One of the more enthusiastic euro-zone members, Finland, opened its central bank at midnight to allow its citizens a chance to change their markkaa for euros in person. Most euro countries simply left consumers to deal with ATMs or wait until businesses reopen Wednesday.
In Italy, where waiting until the last minute to deal with change is a matter of proud tradition, small-business owners conceded without chagrin that they weren't ready.
"If I don't have change in euros, I will give the change in lire. I cannot have huge amounts of money in my shop," said produce vendor Gianna Ballerina, who had yet to collect euros from the bank Monday.
Only about 4% of the country's 30,000 ATMs were loaded with euros on time, and most of them had been taken out of service throughout the weekend to get them ready.
Some euro nations braced for the change by stepping up defenses. In Spain, national police spokesman Jose Maria Seara said the number of officers on the streets was boosted by 12% for the changeover out of concern that the mix of drinking and unfamiliar transactions would lead to some heated misunderstandings.
"After celebrating and then getting their change, some people are sure to argue and even fight over being cheated," Seara said. "They'll wind up in the police station."
Times staff writer Marjorie Miller in London and special correspondents Maria De Cristofaro in Rome, Cristina Mateo in Madrid, Alison Roberts in Lisbon and Sarah White in Paris contributed to this report.