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What is the Euro?

The European Union is coming!

All about money

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Propping up the Euro The U.S. Federal Reserve and its European and Japanese counterparts try to stem the fall of the Euro. (09/22/00)

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Euro a go-go
January 9, 2002

Imagine the U.S. economy merged with Canadian and Mexican economies. What would it take to exchange every single U.S. dollar, Mexican peso, and Canadian coin floating around for one single currency?

And, could we really change the George Washington one dollar bill for something totally different?

On the first day of 2002, twelve of the fifteen nations in the European Union, EU, merged their economies and surrendered their old coins and bills for new ones.

They hope a confederation of countries will make them stronger, similar to the way the union of 50 states makes the United States the strongest economic force in the world.

So at midnight, citizens said adios, adieu, and ciao, to their national currencies for the totally new "euro."

How much is that euro in the window?

There were some glitches. On New Years Day in Germany, one movie theater listed the price of a ticket as 8 deutsche marks. Viewers wanted to pay 8 of the German currency, worth about $3, but the ticket seller said the sign was a mistake. The ticket was supposed to be 8 euros, about $7.50.

After arguing that they should get the cheaper price, ticket buyers accepted the fact that such things will happen, and the transfer will take some patience and understanding.

Forgeries are also a problem. A customer at a gas station in Finland tried to pay with a 300 euro bill, which would be worth $268 - if such a thing existed. The attendant couldn't make change, however, and the customer left, promising to come back later. He didn't. The bill was a fake.

Since euro cash debuted Jan. 1, counterfeits have also turned up in Germany, the Netherlands, and Ireland.

Learning to love the euro

Of course, Europeans have been working and planning for the 2002 euro launch for nearly a decade.

By the fall of 2001, small business owners had begun exchanging their money supplies.

Everything on the small, microeconomic scale --like store price tags, personal bank accounts and ATM cash machines -- had to change.

On the macroeconomic scale, governments, banks and large companies had to translate their records and budgets into the new euro values.

So far, approximately 96 percent of all ATMs now only carry euros. Most bank accounts were converted into euros before Dec. 31, 2001. By Feb. 28, the European Monetary Union expects all citizens to rely on the new currency.

However not every citizen possesses euros, or even understands the purpose of euros.

The European Union conducted a massive public education campaign to teach 375 million people how the euro worked and how to change their money.

Commercials have been running with slogans promoting: "one currency, stable prices" and "Once the first few days of January have gone by, the euro will make life easier!"

Most storefronts display a "We accept euro" signs in 8 languages. Store cashiers, stock traders, and small business owners, received specific training on euro conversions and prices, and how to assist customers using the euro.

So far, most citizens have accepted the euro.

In Italy, however, Prime Minister Silvio Berlusconi dismissed his Foreign Minister for criticizing Italian's lack of enthusiasm for the euro.

And when 17-year-old Ilaria asked her Italian grandmother what she thought of the new money, her grandmother shrugged: "io so solo che sono stufa di sentirne parlare!"

Translated in English this would mean: "all I know is that I'm sick and tired of hearing about it!"

Ilaria says the changeover will be easy for young people who travel and may do business in other countries. But she worries that it's more of a hassle for older people who never leave their village and now have to deal with a big confusing change.

An historic moment

The euro's successful launch is part of a long experiment to create a united states of Europe that could rival the power of the United States of America.

Money by nature relies on trust, and European countries have decided over the past few decades that trusting each other is better than the world wars of the 20th century.

More than symbolic, the money portion of this adventure echoes an historic struggle in the 1780s.

After independence, the 13 former American colonies made the difficult decision to give up their own coins and bills and their loose confederation to form a more perfect union based on a federal dollar and a Constitution.

The payoff was huge. But whether the European Union can unite people of such different languages, cultures and long histories remains to be seen.

What do you think?

Is the euro a step in the right direction?

Should the U.S., Mexico, and Canada adopt a common currency?