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Euro Undergoes First Real Test

January 2, 2002

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BRUSSELS, Belgium (AP) _ After a smooth holiday debut, Europe’s new single currency was surviving its first real test Wednesday as stores reopened and people headed back to work with unfamiliar money in their pockets.

Despite some shortages of new euro cash among stores and customers alike, the worst fears of endless queues and angry scenes at cash registers were mostly unfounded.

``It hasn’t been too bad,″ said Veronique Patte, manager of the Franprix grocery store near the Champs-Elysees in Paris. ``Customers understand that it isn’t easy. It could be a lot worse.″

Even currency traders were impressed by the relatively glitch-free introduction, sending the euro up well over 1 percent at midday to above 90 cents.

``I can’t really see anything that ... could interrupt the optimism towards the euro at the moment,″ Bear Stearns currency analyst Steve Barrow said in London.

Some people still had trouble getting their hands on euros, whether it was an aversion to long bank lines in Austria or problems finding the right automated teller machine.

Although EU officials reported 80 percent of ATMs across the 12 countries using the euro had been converted by Wednesday, the percentage varied from almost all in Germany to about half in Italy.

Shopkeepers reported the majority of customers were still unloading their old, national currencies.

``It slows us down quite a bit as we give change only in euros,″ said Eeva Ekblom, a waitress at the Cafe Via in Helsinki, Finland. ``But people seem to like the new money.″

``Most people are paying in German marks, but ... it’s only the first day,″ said Mehmed Tasar, serving croissants and sandwiches to morning commuters in Frankfurt. ``In another week there won’t be any German marks here any more.″

In central Rome, customers were paying in lire only at a pharmacy on Via Gambero, forcing staff to convert back from euro prices.

``It’s a bit chaotic,″ said pharmacist Roberta Panocchi, as she punched in the euro price for a tube of toothpaste into the register, then figured out the lira price for her customer, Valentina Monaco.

``These are the first days,″ Monaco said apologetically. ``We’re not used to it.″

National currencies will circulate side by side with the euro for up to two months to help ease the transition, but European Central Bank officials are hoping that most people will use only euros after the first two weeks.

The foot soldiers in the switch are Europe’s retailers, who are expected to take in the old and hand out the new in change to help remove national currencies from circulation.

But that wasn’t happening everywhere.

``My problem is I don’t have enough bills,″ said Mourad Mahoudi, who runs a grocery near the European Union headquarters in Brussels.

When people came in with 50 euro notes _ worth about $44.50 _ he was forced to hand out change in Belgian francs, going against the whole spirit of the operation. ``But I hope to get to the bank later in the day,″ he said.

At one Madrid cinema, the cashier insisted on paying back change in pesetas, explaining she was trying to get rid of the old coins too.

The euro became legal tender in 12 EU countries with the dawning of the new year, representing the most dramatic step toward integration in Europe’s postwar history.

Most Europeans, however, were less concerned about the grand significance of the change than they were about prices that were bumped up along with it, from subway tickets in Brussels to the libations in a bar in Duesseldorf, Germany.

``That’s outrageous!″ one midday customer, who didn’t want to give her name, complained about the 10 percent hike in a glass of beer.

Italian Economy Minister Giulio Tremonti warned shoppers to be attentive to the conversions to prevent ``clever″ salespeople from rounding up the prices unfairly.

Some stores saw marketing advantages in the confusion.

The big German supermarket chain Aldi rounded its prices down, resulting in price cuts averaging 2 to 3 percent _ and advertised the move as ``the biggest Aldi price cut of all time.″

Rival Rewe dropped prices on about 250 items and promised it wouldn’t raise any prices. ``We’ll set our prices in such a way that they are competitive,″ spokesman Wolfgang Schmuck said.

Some minor problems cropped up, such as computer bugs that kept about 200 of the 1,300 post offices in the Netherlands closed Wednesday.

Bank unions in France and Italy tried to stage strikes but drew little support and caused only minor disruptions on the historic day.

``For the moment, knock on wood, it’s going over extremely well,″ said French Finance Minister Laurent Fabius.

Overall, EU Economic and Monetary Affairs Commissioner Pedro Solbes said things were going even better than expected _ although no one was ready to relax yet.

Still to come is the first Saturday shopping rush _ when stores normally ring up as much in sales as they did the previous five weekdays.

``It will be interesting to see what happens,″ he said.

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