Euro causes confusion among many consumers

Early reactions to new currency mixed

January 3, 1999
Web posted at: 2:25 p.m. EST (1925 GMT)

In this story:

• Britain also affected
• Challenging the dollar
• Asia may benefit
• Related stories and sites

(CNN) -- International investors are poised to weigh in Monday with their reaction to the euro, after working through the weekend to retool banking systems to accept the new common European currency.

But on the streets and at airport money exchange counters over the weekend, the euro was already getting a cool reception.

"As far as I'm concerned the euro is a load of rubbish," said one German.

"I really don't understand all this," said a Japanese tourist trying to exchange yen for European money at Tokyo's international airport.

For the moment, the euro only exists electronically. It can be charged to a credit card or written as a check, but coins and notes will not appear until January 1, 2002.

In the meantime, German marks, French francs, Italian lira and other individual European currencies will represent the euro in cash transactions.

Many major stores in Europe were showing prices in both euros and their national currencies -- but in Germany, most shops posted only marks.

Britain also affected

The United Kingdom is one of four European Union countries not taking part in the launch of the single currency. But it cannot escape the impact of the euro.

With 500 international banks based in London's financial district, London bankers and traders spent the weekend preparing to launch into the uncharted waters of a single European currency.

"The conversion has been one of the largest logistical operations ever undertaken in the London market," said David Clementi, deputy governor of the Bank of England.

Peter Letley, managing director of business operations for HSBC Investment Bank, said his company did 90 percent of the work they would have done had Britain joined the other 11 members of the E.U. in adopting the euro.

Challenging the dollar

Many in the United States feel far removed from the impact of the euro.

"I'm sure it affects us," said one woman in New York, "but it doesn't affect me day-to-day, so it's not really a big deal to me."

But U.S. tourists are used to the dollar being welcomed virtually everywhere they go -- and some analysts expect the euro to challenge the U.S. currency for supremacy in the world markets.

"Europe will no longer have to put up with the whims of the dollar," said Jean Boissonnat, a former member of the Bank of France's monetary council, writing in Sunday's Le Journal du Dimanche.

Asia may benefit

Asia is hoping the euro's challenge to the dollar can help boost sagging economies. Analyst Tommy Koh of the Asia-Europe Foundation listed several reasons he thinks the single European currency will benefit Asia.

"One is that the euro will in time rival the U.S. dollar as a store value and as a medium for international transactions," he said. "Second, the euro creates opportunities for both Asian businesses and for Asian governments. And my final point is that the time has come for east Asians to learn the lessons of Europe about reunification."

Correspondents Kim Underwood, Fiona Foster and

Reuters contributed to this report.