Britain Balks, But Rest of Europe Rallies Around New Currency

With fireworks, soaring rhetoric and last-minute controversy, Europe last night inaugurated its first single currency since the Holy Roman Empire.

As midnight ushered in the new year, the first of 304 million citizens from Lapland to Lisbon began withdrawing euro notes from cash machines to start the biggest currency exchange the world has seen. Within weeks the German mark, the French franc, the Italian lira and nine other other ancient currencies will be consigned to history.

Across the continent leaders urged doubting populations to celebrate rather than mourn an event that will bind Europe together as never before, establish the world’s second currency after the dollar, and the third largest monetary zone after China and India.

The introduction of 14.5 billion euro notes and 50 billion coins also represents the biggest leap towards integration since the European Coal and Steel Community was formed in 1951.

Yesterday continental newspapers and politicians bid goodbye to the various currencies: “Farewell Guilder” was the headline on one Dutch newspaper. “Le Franc Est Tombé” , proclaimed the front page of Belgium’s La Libre. But Gerhard Schröder, the German Chancellor, told his country: “We are witnessing the dawn of an age that the people of Europe have dreamt of for centuries — borderless travel and payment in a common currency.

“Many will be a bit wistful. The German mark meant a lot to us. We link the mark with memories of good times in Germany. But you can be sure even better times are ahead.”

Romano Prodi, the European Commission President, proclaimed: “The euro is your money. It’s our money. It’s our future. It’s a little piece of Europe in our hands.”

Wim Duisenberg, President of the European Central Bank, urged Britain, Sweden and Denmark — the three EU countries outside the eurozone — to “come and join us” , and Signor Prodi predicted that the introduction of coins and paper would have an “enormous influence on public opinion” in those countries.

British Prime Minister Tony Blair is understood to be drawing up plans for a “yes” campaign for a referendum on the issue in 2003 aimed directly at women and extolling the benefits of the EU as much as those of the euro.

In an interview with The Times Monday British Foreign Secretary Jack Straw sent his best wishes to the euro but insists that tough hurdles will have to be crossed before a referendum can take place. He says the introduction of notes and coins will alter the background of the debate, but will not change the nature of the decision — which remains whether adopting the euro would be in the national interest.

However, the Government continues to be criticised by pro-euro campaigners for its hesitancy. In an article for The Times today, Charles Kennedy says: “Britain is looking more and more out of step. While 12 of the 15 EU countries share a common currency, we are languishing on the sidelines.”

He urges the Treasury to take an immediate step towards entry by putting “downward pressure” on sterling so that the pound is not overvalued when the Government decides to join.

But he also gave ammunition to eurosceptics by saying the euro would inevitably lead to greater economic harmonization. “We have taken a major step which will lead ineluctably to greater convergence of economic rules,” he said.

The euro’s arrival after thirty years as a dream and three as a virtual currency was celebrated with fireworks, music and theatre at huge open air parties at the Cinquantenaire arch in Brussels, outside the ECB’s Frankfurt headquarters, at Berlin’s Brandenberg Gate, in Rome’s Piazza del Popolo, in Dublin’s Grafton Street and in the central square of the Dutch town of Maastricht, where almost exactly a decade ago EU leaders signed the treaty approving the single currency. Signor Prodi and Wolfgang Schüssel, Austria’s Chancellor, attended an opera in Vienna before using euros to buy flowers for their wives at midnight.

The first notes became legal tender in Réunion, a French island that rises from the Indian Ocean 500 miles east of Madagascar, two hours before they were issued in Greece and Finland. Over the next eight hours they became the legal currency not just of the eurozone, but of Montenegro, Kosovo, Andorra, the Vatican, San Marino, Monaco, the Portugese Azores, the French Carribbean islands of Martinique and Guadeloupe, French Guiana in South America and the St Pierre et Miquelon islands off Newfoundland.