Euro has smooth start but real test begins now

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The Independent Online

On its first day of life the baby euro appeared to be thriving, but its parents remained anxious about the harder tests that lie ahead – such as its second day.

On its first day of life the baby euro appeared to be thriving, but its parents remained anxious about the harder tests that lie ahead – such as its second day.

With most businesses across euroland closed for the New Year's Day bank holiday, Europe's single currency had a successful but relatively undemanding first 24 hours. A run on cash machines was reported throughout the eurozone.

But with a partial bank strike looming in France and a central bank strike also being threatened in Italy, and with millions still to spend their first euro, officials were braced for a series of minor bottlenecks and glitches when Europe returns to work this morning.

Still, the European Commission and the European Central Bank breathed a huge sigh of relief at the quietness of the first day of the largest monetary conversion ever attempted. "It seems that all the reports are positive," said the commission's spokesman, Gerassimos Thomas. "Nothing much is happening. No news is good news."

Brussels forecast that more than half of all cash purchases in the eurozone, stretching from Greece to Finland and from Ireland to Germany, would be conducted in euros by the end of this week.

Pope John Paul II gave the newborn his blessing at a New Year's Day mass in St Peter's Square. He offered "a special wish for peace and prosperity to the nations of the European Union, which today, with the single currency, accomplish a historical goal". The Vatican, which has traditionally used the Italian lire, is now part of euroland and has issued its own version of the euro coins.

In most of the eurozone, politicians staged photo-opportunities at which they were seen spending their first euro. The French Prime Minister, Lionel Jospin, went to a street market in Paris where he bought two large bunches of roses for 76.22 euros. "This is fun," he said. "I am very proud."

European officials and national governments are relying on two ways of filling people's wallets and purses with euros as rapidly as possible: an instant conversion of almost all cash machines to euros; and pleading with shops, restaurants and bars to give euros back as change for the old, national currencies.

The first route appeared to have worked well yesterday. The European Central bank estimated that, by last night, 80 per cent of all automatic cash dispensers across euroland were issuing euros. Belgium reported 600 cash withdrawals per minute in the first two hours of the new year.

In France, 34m euros had been withdrawn by 9am yesterday. A total of 150m euros was expected to have been withdrawn by last night – four times the equivalent amount normally taken out on New Year's Day.

In Germany, banks reported that almost 100 per cent of cash points had switched to euros in the first hour of the new year.

But the other planned fountainhead of euros – change given by small businesses for national currency – appeared to be working patchily at best. First reports from France, Italy and Belgium yesterday suggested that many shopkeepers and bars were ignoring government advice and only giving euro change for euro payments.

There were reports yesterday of some businesses were running out of change in France, Belgium, Greece and Finland. Embarrassingly, even the European Commission's own bar ran out of euro change before a press conference called to report on the single currency's first day.