The Brancatelli File



January 10, 2002 -- Jenny Harrison, a frequent-flying Bostonian currently based in Helsinki, thinks she has a good handle on the Euro, which became legal tender on New Year's Day for 300 million Europeans in 12 countries.

"When I got to Finland two years ago, I got a mobile phone that worked everywhere in Europe, regardless of country or language," she explains. "If my phone can do that, why can't the money? I mean, money isn't rocket science."

In point of fact, monetary policy may be the economic equivalent of rocket science, but let's leave that discussion for another time. Harrison's basic thought--that Europe in general and business travelers in particular really should have one kind of money that obliterates language, cultural and national boundaries--is exactly what makes the new Euro so damned attractive as a day-to-day proposition.

Business travelers, who've spent centuries juggling envelopes full of German marks and Portuguese escudos and French and Belgian francs, are a built-in constituency for the one-size-fits-twelve Euro. After they burn off their supplies of "legacy" national currencies, they will be able to bounce around vast swatches of Europe with just one type of bank note and one type of coin. Europeans, who hope to build a unified commercial market, can latch on to the Euro without sacrificing too much of what makes them Italians, or Spaniards or Greeks.

Ten days into the conversion, there remain a few kinks in the Euro system. Bank lines are long and many bankers are ignoring pleas to change currency for all comers. There is a growing shortage of the smallest notes, the 5 Euro (worth about US$4.50) and the 10 Euro. Europe's winter sales are on and many retailers are bewildering customers with four prices (the original and sale price in both Euros and local currency). To keep small cash transactions--buying a newspaper, a coffee or a few groceries--from turning into a long day's journey into algebra, many local shopkeepers continue to give change in local currency when customers offer local currency in payment. That's technically against the rules and it also keeps legacy currencies in circulation.

And, as many predicted, there's been a disturbing trend to "round up" prices. In France, bread is about 10 percent higher in Euros than it was in francs. Hotels and restaurants in some German and Austrian cities raised their rates as they converted. Overall, some analysts think January prices in the Eurozone will be about 2 percent higher than they were in December. Others peg the eventual cost of rounding-up at 550 Euros per family.

Still, sooner rather than later, and no later than March 1, the Euro will be the only legal tender in the 12 Eurozone countries. And that, as Jenny Harrison says, "is the only way to fly."

Here's what you need to know about the Euro--and your stocks of legacy currency--if you're headed to Europe in the next few months.

The Euro is now legal tender in Austria, Belgium, Finland, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, The Netherlands and Portugal. It is also the de facto legal currency in city-state nations such as Andorra, Monaco and San Marino. Overseas European territories (such as French Guadeloupe and Martinique in the Caribbean) will also switch to the Euro. And the Euro is expected to circulate widely throughout Eastern Europe, where German marks were previously considered the "safe" alternative to the local currency.

The Euro was fixed in value against the 12 currencies it officials replaces (see countries below for specific details). It floats freely against the world's other currencies. It has been selling in a range of 85 to 90 U.S. cents for the last few months. A quick way to convert a Euro price: Consider it the equivalent of a U.S. dollar price, then give yourself a 10 percent discount.

There are seven Euro notes and you can recognize their denominations by size and color. As the denomination rises, so does the physical size. The 5 Euro is gray and about the size of an Italian 1,000-lire note. The 10 Euro is reddish brown and about as high as a U.S. note, but not as long. The 20 Euro is brown and the 50 Euro is orange. The largest notes are the green 100, the yellow 200 and the purple 500. Euro notes have a range of anti-counterfeiting features, including iridescent stripes and holograms. The have generic designs--windows, arches, gateways and bridges--so as not to offend any of the participating nations' patriotic pride.

There are eight coins. The 1-, 2- and 5-cent pieces are bronze colored. The 10-, 20- and 50-cent pieces are gold colored. The 1- and 2-Euro coins are bimetallic. The coins get larger and thicker as the value increases. The 2-cent Euro coin is about the size of the U.S. penny. All coins have a generic denomination side that lists their values. The so-called national sides differ by country: The German 2 Euro has a "fat" eagle, for example. The Italian 1 Euro features the graceful Leonardo man. Cervantes appears on the Spanish 10-, 20-, and 50-cent pieces. The Eire harp appears on all the Irish coins. Regardless of where they are minted, however, coins are valid tender in all 12 countries.

The Euro is represented by a stylized "E" with a rounded spine and two slashes in the middle. The laptop I'm using can't generate it and my version of Microsoft Word seems equally helpless. But some U.S. computers may generate the character by typing ALT-SHIFT-E or ALT-SHIFT-4. When all else fails, use EUR rather than the symbol.

Austria: One Euro is worth 13.7603 schillings, which will continue to be accepted at retail until February 28. After March 1, banks may convert schillings at their discretion. Austria is further behind in conversion than most Euro countries.

Belgium: One Euro is worth 40.3399 Belgian francs, which will continue to be accepted at retail until February 28. Francs will be convertible at banks until December 31. A last-minute glitch by the operator of about half of Belgium's ATMs slowed Belgium's conversion.

Finland: One Euro is worth 5.94573 markka, which will continue to be valid at retail until February 28. After March 1, banks will convert markka at their discretion. Finland was quick to convert in the urban areas, but some distant regions near the Arctic Circle are lagging.

France: One Euro is worth 6.55957 French francs, which will continue to be accepted at retail until February 17. Banks will accept francs for conversion until June 30. A shortage of 5 and 10 Euro notes has been reported and there have been numerous examples of rounding up during the conversion.

Germany: One Euro is worth 1.95583 marks, which is no longer legal currency. However, most retail operations will accept them until February 28. Commercial banks must accept marks until February 28. Unfortunately, most currency-exchange bureaus and airport change booths refuse to accept marks now. Germany's "big bang" approach forced Germans to switch to the Euro almost immediately, but it has also caused extremely long lines at banks. A major department store is offering a discount to customers who pay by credit card and that has unleashed a legal battle over Germany's voluminous, and extremely specific, retailing laws.

Greece: One Euro is worth 340.75 drachma, which will continue to be accepted at retail until February 28. After March 1, banks will accept drachma for conversion at their discretion. Greece was making excellent progress converting to the Euro until a record-breaking storm blanketed the country in snow and paralyzed most retail activity.

Ireland: One Euro is worth 0.787564 Irish punts, which will continue to be accepted at retail until February 9. After March 1, banks will accept punts for conversion at their discretion. Ireland has made extraordinary progress converting to the Euro.

Italy: One Euro is worth 1936.27 lira, which will continue to be accepted at retail until February 28. After March 1, banks will convert lira at their discretion. Italy's conversion to the Euro has been very spotty and hampered by a shortage of smaller Euro notes. The popular foreign minister resigned over the weekend to protest the government's slow implementation of the Euro.

Luxembourg: One Euro is worth 40.3399 Luxembourg francs, which will continue to be valid at retail until February 28. Francs will be convertible at banks until June 30.

Netherlands: One Euro is worth 2.20371 guilders, which will continue to be valid at retail until January 28. Banks will convert guilders until December 31. The Netherlands' aggressive conversion deadline has helped the country adapt quickly to the Euro.

Portugal: One Euro is worth 200.482 escudo, which will continue to be accepted at retail until February 28. Banks will convert escudo until June 30. Portugal has been slow to convert to Euros and rural areas are still far behind the rest of Europe.

Spain: One Euro is worth 166.386 peseta, which will continue to be accepted at retail until February 28. Banks will convert peseta until June 30. Spain assumed the rotating presidency of the European Union on January 1 and has gone out of its way to speed its transition to the Euro.

There are no limits on the commission that currency-exchange bureaus may charge for conversion to the Euro. Most currency-exchange bureaus at U.S. airports say they now have Euro notes in stock. All credit-, charge- and debit-card transactions since January 1 have been charged in Euros. Legacy bank notes will be accepted for conversion to Euros at each country's central banks for at least 10 years; coins can be converted for at least two years.

This column originally appeared at

Copyright 1993-2004 by Joe Brancatelli. All rights reserved.