What the Euro Has Been Up To for the Past Three Years --- Tuesday Is Debut of Cash, But Common Currency Already Has Made a Mark

• Published in: The Wall Street journal. Eastern edition
• Main Author: By Wall Street Journal staff reporters Geoff Winestock in Brussels and G. Thomas Sims in Frankfurt
• Format: Newspaper Article
• Language: English
• Published: New York, N.Y Dow Jones & Company Inc 28.12.2001
• Edition: Eastern edition
• Subjects: Central banks; Consumers; Currency; Euro; Eurozone; Fiscal policy; Foreign exchange rates; Monetary unions; Prices
• ISSN: 0099-9660

The euro has had its share of struggles. It started out bright-eyed and bushy-tailed, trading at $1.17 apiece, but soon took a dive, falling to about 83 U.S. cents. The European Central Bank had to intervene on behalf of its beleaguered currency. (The euro has appreciated since and now buys 88 cents.) The changeover has also been tainted by price increases of several tenths of a percentage point, because shopkeepers are rounding prices up when they convert. It remains to be seen how quickly monetary union will vanquish price variations among the euro zone countries -- Germany, France, Austria, Ireland, the Netherlands, Belgium, Luxembourg, Spain, Portugal, Italy, Greece and Finland. Prices for cars, food and electrical goods can be as much as 50% more expensive in one nation than in another, and regulatory obstacles can make it difficult to purchase outside the national market. But executives at AutoScout24 GmbH, a German Web site with a database of 500,000 motor vehicles for sale, are convinced that the new ease of comparison will even out differences in prices. Some hope euro notes and coins will act as a stimulus for the euro zone countries to forge a more unified fiscal policy to match the unified monetary policy of the European Central Bank. The failure of the U.S. Congress to pass a budget stimulus package this year underlines the technical and political difficulty of fine-tuning fiscal policy even in a single country. That uncertainty is magnified 12-fold in the euro zone.