Issue 82, Autumn 1998.
national currency the punt or Irish £, is being swept away
as the new European currency, the Euro is launched. Although
it comes into effect on January 1st 1999, the actual euro
coins and notes won't be seen until January 1st 2002.
euro is a standardised currency that will apply across eleven
of the fifteen countries in the European union: i.e. Ireland,
Germany, France, Spain, Italy, Finland, Netherlands, Portugal,
Austria, Luxembourg and Belgium. Denmark, Sweden and Britain
have opted out (for the moment, but Britain intends to join
in the next five years), while Greece has not met the various
requirements. Once national currencies have been abolished
in the eleven, the same bank notes and coins will be used
Ireland first introduced its own excellently designed notes
and coins in 1928, with the graceful outline of Lady Lavery
on the banknotes and symbols of Irish animals and fish (like
the pig, bull, horse, and salmon) on the coins. This early
currency has come to be regarded as a Collector's Item,
and you can buy it at coin dealers.
present banknotes are also works of considerable artistic
merit, many of them having been designed by Dublin artist
currency was linked with sterling until 1979, so its period
of "independence" has been brief - less than twenty years.
With the new European Central Bank in Frankfurt, Germany,
coming into existence, all decisions on the new currency
and related matters (such as interest rates) will be taken
there on a centralised basis, and not in the Central Bank
of Ireland in Dublin, which was set up in 1942.
The euro coins will be in the following denominations: 1;2;5;10;20
and 50 cents and 1 and 2 euros. The Irish face of the euro
coins will feature the stars of the European Union, the
year of minting and the Irish harp. Banknotes will be issued
in 5;10;20;50;100;200 and 500 euro denominations. The face
of these banknotes show rather insipid designs based on
European bridges, but there won't be any national designs.
introduction of the Single Currency is all part of the plan
to create a single united Europe. By the same plan, duty
free shopping within the EU is scheduled for abolition at
the end of June 1999 (despite vocal protests from the Irish
substantial changeover programme to take account of the
new currency has already started in Ireland across all industrial
and commercial sectors. A Euro Changeover Board has been
set up by the Department of Finance to oversee a smooth
transition. Already, the currencies of the eleven European
states taking part in the scheme have been locked in to
the Euro. As from January 1st 1999 it will exist officially.
From that date, it can be used for any paperless transactions,
including cheque book and credit card dealings, accounts
and paying your income tax.
But the actual euro notes and coins won't be launched until
January 1st 2002. In the six months following this date
the national currencies and the Single Currency (Euro) will
run side by side. The plan is that by July 2002 (or possibly
earlier) national currencies will have been abolished and
the euro will take over as the sole currency in the eleven
that stage, every kind of money transaction, including bank
accounts, will have to be converted to euros. The exact
conversion rate won't be known until January 1st 1999, but
it is likely to work out at about 80p to each Euro.
long transition period has been strongly criticised. When
decimalisation came in 1971, it happened overnight. There
are many other criticisms too of the euro. Many critics
say that since the European Central Bank will be based in
Frankfurt, and Germany has been one of the main drivers
of the single currency, the new bank is only the Bundesbank
(the German Central Bank) under another name.
The euro will mean that common interest rates will prevail
across the member states. In countries where unemployment
is high (like France and Germany) the introduction of low
interest rates will be an advantage. But in countries like
Ireland, where economic growth has been much stronger than
anywhere else in Europe, lower interest rates won't be so
beneficial and the fear is that lower cost loans and mortgages
could push up inflation. Ireland has performed so strongly
that it doesn't need lower interest rates, goes the argument,
but under the euro regime any room for independent manoeuvre
will have been banished. In future, say the euro critics,
if a country wants to make cutbacks, it can only be done
by putting people out of work, a sure recipe for social
unrest. The space for national flexibility in managing national
economies will have gone.
major cause of concern is the transition from punts to euros.
Often prices are offered enticingly as (say) £2.99. But
punts may not translate happily to euros: if it translates
to 3 euros 73 cents, for example, shopkeepers could be tempted
to round them up - say to 3 euros 99 cents. Some maintain
that the conversion will be the cause of massive price inflation,
as happened when the currency went decimal in 1971 and inflation
a single currency will make comparison shopping across national
borders much easier, especially for people shopping on the
Internet. It will be very easy to see just how much the
same goods and services cost in each country in Euroland.
It will also make it easier for Irish-based firms to sell
elsewhere in Europe and for Irish consumers to buy goods
and services in mainland Europe.
If you are a visitor travelling through Europe, you will
find it much easier having just the one currency through
the eleven participating states. If you are claiming back
VAT (see Issue 80) on purchases made in Ireland as a non-resident,
that won't change, except that the calculations will be
made in Euros rather than punts as at present.
in Ireland, the two parts of the island will continue to
use two different currencies; In the Republic the euro will
be in ordinary use, but Northern Ireland will continue to
use sterling, so long as Britain remains outside the Single
advent of the euro is doing away with a lot of history:
The French have had their own currency for 638 years, but
they have been the first European country to mint euro coins.
The first French francs were struck in 1360 by King John
the Good, to signify that his part of France was "franc
des anglois" or free of English domination.
the hope is that the euro will become a world currency to
match the US dollar. But a reminder of the earlier times
will be around for years to come: The symbol of the euro
is a lower case 'e' with two diagonal lines through it.
Existing keyboards still have the £ sign and it will
be years before the euro symbol comes into universal use
on keyboards. The introduction of the euro might seem neatly
bureacratic to the pen and mouse pushers of Brussels, but
the whole enterprise is still fraught with uncertainty.
Its introduction coincides with the great computer conversion
to make computers year 2000 compliant. Many sources say
that European businesses have been putting more resources
into converting to the euro than making sure that their
computer systems run correctly come January 1st 2000.
wonder that one newspaper in Germany (where the deutschmark
is being very reluctantly relinquished in favour of the
euro) had a very anti-euro cartoon: It was in the Neues
Deutschland in Berlin and showed a cheering crowd giving
the euro a good send-off: But the Euro looked like an airship
- and we all know what happened to those!
The exchange rate of the Irish punt to the Euro is an irrevocable
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