Poles border on confusion as new currency looms

Click to follow
The Independent Online

The visitors first glimpse of this Polish frontier town is a poster advertising the euro, stuck on a soot-covered wall that flanks the railway station. Poland, of course, is not in the eurozone, nor is it a member of the EU, at least not yet.

But this boom town lives off trade with the Germans just across the Oder so the locals need to stay informed when the colour of German money changes. The hairdressers, supermarket staff and even the undertakers who collect DM10m (£3m) on a typical day are soon going to be in trouble, however. They only know the euro from the posters.

"I have seen only specimens, not the real money," says Marek Komorowski, the director of the local Fortis Bank. "People think here that the euro is only virtual money," he adds. "But in January it becomes physical."

The story is the same all over town. Business is prepared for the euro, shopkeepers know the exchange rate to the last decimal, but they will be embarrassed when the first German walks in with crisp new notes. At the Radisson hotel, in the new high-rise commercial centre, the staff started converting the accounts last month. They will happily make out the bill in euros but will be praying that the customers will not want to pay with the damned things.

Wioletta Szczepanska, the hotel's director of sales, says: "We have not received the money. When we will get it, I don't know."

People in the eurozone have seen euros but no special provisions have been made in the borderlands of east-central Europe where deutschmarks, schillings and lira sustain the local economy.

The people of Szczecin will no doubt become used to the new money quickly. A more difficult question is what to do with their redundant wads of cash. Unlike the citizens of euroland, no central bank is offering them a free swap.

The savvy Poles, driven to currency speculation more than 20 years ago by the collapse of the communist economy, have found a solution that is unlikely to please the European Central Bank. Money changers in this Pomeranian city, known as Stettin in the days of the German Reich, are buying US dollars with their deutschmarks. Amid the uncertainty, the smart money is steering well clear of the euro.

The dumping of the once mighty mark is causing head-aches for bankers. An uncertain proportion of the foreign currency in Poland stems from the "grey economy", untaxed and not entirely legitimate. Then there is an estimated DM50bn held by Russian and other criminals that is difficult to exchange in the banks of Western Europe. Mr Komorowski says: "We have people coming in trying to sell DM200-500 without documents."

Despite the problems, most Poles are enthusiastic about the next European adventure. "It's a chance for us," says Stanislaw Flejterski, an economics professor at Szczecin University. "You will be able to compare prices across the board, and that will benefit us." Wages and the cost of services are about a sixth of those in Germany, he points out.