Euro the new word to be familiar with
By Manuel García Sánchez
Apache Co-editor
We can begin to say goodbye to francs, marks, pesetas, and liras because a new currency unit is going to take their places on 2002. The new unit is the euro.
Euros will circulate in 12 of 15 countries, members of the European Union, starting on Jan. 1, 2002.
David Gordon, economics instructor, said that the euro is meant to succeed. Looking back historically, any time either a nation or groups of nations have gotten together and have had common currency, their economies have been helped.
“If we go back when the U.S. first started, there were the 13 colonies that did not have a common currency,” Gordon said. “Once there was a common currency, that helped increase the economic activity; it made it easier to exchange goods and services.”
Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Spain and Portugal are the 12 countries embarking on this venture. In this monetary union, these 12 countries are giving up their independent control over their money supply.
England, Denmark, Sweden have decided not to participate in the monetary union.
The euro will bring both benefits and obstacles to U.S. companies.
According to Gordon, the euro will bring some benefits to the U.S. Since the U.S. has many corporations doing international business on various levels like importing and exporting goods or investing capital in foreign countries, the euro will reduce currency risks.Now, with the euro, a U.S. company can deal more easily with more than one European country if those countries are using the euro as their economic unit.
On the negative side, the euro will increase intra country trade at the expense of those countries that do not belong to the monetary union. The trade within those countries may speed up.
“It is probable that the euro will enhance the economy in Europe,” Gordon said. “That may drop some business away from the U.S.”
At this moment, one euro has a value of 90 cents; however, this exchange rate changes everyday.
There will be eight different coins that will have a common side, a European Union map, while the other side will be customized in each country. The coins will have the following values: 2 and 1 euro and 50, 20, 10, 5, 2, and 1 cent.
The bills will be identical for the 12 countries. Bills of 500, 200, 100, 50, 20, 10 and 5 euros will vary in size and color as the value increases.