THE PRECISE exchange rates at which 11 member currencies are locked against the euro were published yesterday, ahead of the midnight launch of the new European single currency.
The ceremonies creating an economic superpower to rival the United States were clouded, however, by the reopening of a festering disagreement over the presidency of the European Central Bank (ECB). The ministers gathered in Brussels - excluding Gordon Brown and Germany's Oskar Lafontaine - made a determined effort to damp down the latest eruption of the dispute.
The pound, which will buy about 1.42 euros at the current exchange rate, lost value, as did the dollar after the official publication of the conversion rates. The dollar was trading at an initial value of $1.1685 to the euro.
Many analysts believe the pound and dollar will weaken further against the new currency when trading picks up in the new year.
The main European stock markets were closed, and the foreign exchanges and bond markets were exceedingly subdued. In the City, where technical steps to implement the conversion got into full swing at lunchtime yesterday, there was a sense of anti-climax.
"It's like the aftermath of an elaborate wedding. It was a symbolic moment, but it's the least important part of the marriage," said Alison Cottrell, an analyst at PaineWebber.
One less-than-enthusiastic trader said: "It's New Year's Eve and we all just want to get to our parties."
The formal rates were close to the end-of-year market rates, and therefore sprang no surprises on the financial markets.
Some volatility is expected on the foreign exchanges next week as investors and dealers get accustomed to the euro. In the longer term, most analysts expect the pound to fall against the euro.
"When we come back on Monday, sterling will be a small currency. It's a huge change from being the biggest European currency," said Ms Cottrell.
Investors - including central banks seeking to adjust their foreign exchange reserves - are expected to sell dollars and sterling to boost their holdings of euros. "There is a very good case for believing the euro will be a strong currency," said Ian Harwood of Dresdner Kleinwort Benson, the investment bank.
Just a few analysts hold the contrary view that the pound will strengthen as investors seek a safe haven against the euro.
The French government insisted yesterday that Wim Duisenberg, the ECB's president, must step down after four years in favour of a French candidate.
Mr Duisenberg had said, in an interview published in Le Monde yesterday morning, that he would not stick to the four-year compromise struck last May, but would instead stay on for more of his eight-year term.
Jean-Claude Juncker, Prime Minister of Luxembourg, probably spoke for the rest of the EU governments when he arrived at the historic finance ministers' meeting yesterday. "It's not of overwhelming political intelligence to reopen the debate," he said.
France's stubbornness in insisting last spring that Jean-Claude Trichet, the Banque de France governor, should get the ECB job had exasperated other member governments. But equally, most will despair of Mr Duisenberg's sense of timing.
The controversy-prone central banker said yesterday - a day too late - that from now on he would have no comment about the question.
A spokesman for the European Central Bank in Frankfurt insisted: "His contract runs for the full eight years and that is untouchable."
But Dominque Strass-Kahn, France's Finance Minister, referred back to Mr Duisenberg's indication last May that he did intend to step down early. "His comments were enshrined in writing, they are public and everybody knows them, and therefore I see no reason to fear that Mr Duisenberg will not stick to what he said."
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