ADVENT OF EUROS MAKES IT A BRAVE OLD WORLD FOR TRAVELERS

 In six weeks, a major new currency will debut on the world's marketplaces. After centuries of discussion, the euro will replace the present monetary units in 11 of the nations participating in the European Economic Union: Austria, Belgium, Finland, France, Germany, Holland, Ireland, Italy, Luxembourg, Portugal and Spain. Three European Union countries, Britain, Denmark and Sweden, have opted not to participate at this time, though they may join at a later date. Greece, another EU member, didn't meet the fiscal and economic standards mandated in the Maastricht Treaty, the basis for the monetary change. Non-EU members, such as Norway, Switzerland and Iceland will not be using euros, unless they choose to join the union. Neither will Eastern European countries, but the EU is considering expanding into that region.

On Jan. 1, or actually Jan. 4, the first business day of the year, a new bank, the Frankfurt-based European Central Bank, will take on a role similar to the Federal Reserve, setting interest rates throughout the Euro zone. The influence of national banks, such as the Bundesbank and Bank of France, will decline. Some, though not all, national stock exchanges will start operating in euros.  So say goodbye to francs, pesetas, lira and marks. The foreign exchange rates of the currencies of the 11 participating countries will be irrevocably fixed against one another and against the euro. The exchange rate between the U.S. dollar and the euro will not be set until Jan. 1, but it is believed it will be about $1.18 to 1 euro. From that point, all foreign currency exchanges will be made against the euro, rather than the individual currencies.  How is this change likely to affect your next European trip?  Not a lot, at first. Actually, the transformation will be somewhat more gradual. Though it becomes an official currency Jan. 1, euro transactions will be limited to electronic bank transfers, credit card transactions and traveler's checks for the first three years. Actual euro bank notes and coins aren't scheduled to enter circulation until January 2002, with the individual currencies of the 11 countries becoming obsolete six months later. Euro banknotes will come in 5, 10, 20, 50, 100, 200 and 500 euros, coins in 1 and 2 euros and in 1, 2, 5, 10, 20 and 50 euro cents.  But until 2002, travelers who spend money in those countries will continue to receive national currency in exchange for their dollars, though the exchange will be based on the value of the euro. Also, although you can buy euro traveler's checks, when you spend them, you'll receive national currencies as change.  Other changes will be more evident. On Jan. 1, merchants in the 11 countries have been asked to begin pricing their goods in both their national currencies and the euro. Whether they do so is another question.  When the currency conversion is complete, travelers will enjoy the obvious simplicity of only having to deal with a single currency across most of western Europe, instead of the present colorful confusion of paper and metal. Gone will be the need to memorize various conversion calculations, along with the anxiety over fluctuating exchange rates.  Changing money also will be less expensive. Travelers now have to pay a fee and commission every time they transfer one currency for another. Reducing that to a single exchange will cut costs and reduce waste.  The cost of multi-country tours also should drop. The price of goods and services will be more transparent and easier to compare from country to country. Euros also may have a leveling effect, raising prices in less-expensive regions and lowering them in high-cost areas.  A common currency also will make it easier to compare costs from one country to another. That'll result in more standardized prices, increased competition, and better bargains.  But mostly, the euro heralds the emergence of a brave new Europe, one that's been a long time coming. For more information on euros, www.europa.eu.int/euro


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