On January 1, 1999 the Euro dollar became the official currency of 11 countries: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal and Spain. The United Kingdom, Denmark, Sweden and Greece can choose to join at a later time.
The exchange rates between these 11 countries' currencies are established, but the Euro will not be used for cash transactions until January 1, 2002. On that date individual countries' currencies (the mark, franc, etc.) will cease to be issued, and the Euro will be legal tender for all monetary transactions. Denominations for the new Euro currency will be issued in amounts of 1, 2, 5, 10, 20 and 50 for coins and 5, 10, 20, 50, 100 and 500 for banknotes.
The national currency of the participating countries may be used during a transition period from January 1, 2002 to July 1, 2002. During this period the price of goods will be quoted in both local and Euro currency.
Currently, traveler's checks may be purchased in Euro dollars and can save on exchange fees. For example, if you are converting francs to marks, francs first are converted to Euros, and then the Euros are converted to marks. Therefore, it will pay to purchase only small amounts of local currency. To try these conversions for yourself visit this web site. To convert directly from U.S. dollars (or any other currency) to Euro dollars try here.
For the U.S. traveler, exchange rates until July 1, 2002 will depend on the exchange rate between the U.S. and Euro dollar. For example, if the U.S. dollar goes up 5% against the Euro, the number of francs, marks, etc. for the dollar will also go up 5%. However, Euro prices for the same goods can be higher or lower in different countries. Currencies of non-participating countries will continue to move independently against the U.S. dollar.
The Euro is now the official currency for conducting banking transactions in the member countries; therefore credit card purchases made in local currency will be converted and charged to your bankcard based on the Euro-US dollar exchange rate.
In the end monetary transactions will be simplified as you no longer juggle francs, marks, lire, etc., and prices on the same goods in different countries will be easy to compare.
©1999 Barbara Ballard. Reproduction of this work in whole or in part, including reproduction in electronic media, without the expressed written permission of the author is prohibited.
Questions?
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