December 3, 1998. Copyright, 1998, Graphic News. All rights reserved.

CONSUMERS CONFUSED OVER EURO
By Margot Nesdale

LONDON, December 3, Graphic News: WHEN the Euro blasts off into ÔEurolandÕ next month it is likely to leave many Europeans behind in its wake. Surveys leading up to the launch of the single currency show there is real confusion in some countries over what is about to happen.
As of January 1, European firms will be allowed (but not required) to conduct business in Euros and most big companies have indicated they intend to switch.
However nearly two-thirds of Britons, who will not join the launch, cannot even name the new currency. The Greeks, Danes and Swedes Ð also non-participants Ð are similarly ignorant about the name, as are the Portuguese, Irish and Italians, despite their countryÕs participation.
Only just over half of Europeans know that the Euro will not go into circulation until January 1, 2002. Nearly a quarter think they will have to change the Euro into their own currency in order to buy things with it.
Surveys show the Dutch, Finns, French and Germans are the best informed, with a French poll in August showing an astonishing 60 percent of the French correctly guessing the rough exchange rate of the Euro to the French franc.
In part these findings reflect the effort governments have made to inform people.
A new report released this week reveals that three out of five Britons want the pound to be kept as their only currency. A poll of 1,300 electors by the research group Social and Community Planning Research showed that just 17 percent supported a change to the Euro.
Banks will initially carry much of the financial burden associated with next monthÕs launch. Intra-euro foreign-exchange business worth about $3 billion a year will disappear and foreign-exchange revenues for EU banks are expected to slide by 70 percent.
But the biggest cost for most businesses will be updating information systems to incorporate the Euro. IT consultants The Garter Group estimate the cumulative cost will be between $150 billion and $400 billion. Merely going through the operating systems in the 75 million PCs in European businesses and teaching them to support the new Euro symbol could cost up to $20 billion.
When consumers get their hands on the Euro in three yearsÕ time a new set of problems will emerge. Old and new currencies will initially circulate together, during which time the entire note issue and coinage of the 11 member countries will have to be replaced.
Distributing the new currency will be a logistical nightmare for EuropeÕs banks, which will hand out the new notes, and shops, which will be the main source of coins. Shops Ð many in the thick of January sales Ð will have to carry larger floats of cash than usual to give Euro change and shoppers may become confused as shops display two prices Ð one in Euros and one in the local currency.
Cash dispensers, vending machines, parking meters, postal franking machines and pay phones will all need to be reprogrammed to keep up with the new money.
/ENDS

Source: The Economist