ECONOMY

Euro glass half-full

Preparations for the introduction of the common currency in the European Union on January 1 are going relatively well, but the degree of preparedness varies among sectors and member states and considerable work remains to be done to avoid teething problems, an EU official said in Athens yesterday. All countries are ready to adopt the euro but what has not yet been achieved is preparedness for the first week of circulation, said Gerasimos Thomas, spokesman for Economic Affairs Commissioner Pedro Solves. Our goal is not to be ready on February 28 or at the end of January, but rather on the first week of January, Thomas said, adding that the latest available data at the end of October showed the glass to be half-full. Not everything is ready, the degree of preparedness differs from sector to sector and from country to country, he said. All countries have introduced the legislation required but a considerable amount remains to be done at local government level throughout the union, particularly in terms of computerization, he explained. Thomas said that to date banks were the best prepared firms to meet the new currency, as their role is crucial. Most problems are being reported among small and mid-sized enterprises, and only few say they are fully ready. In Greece there are significant delays in the advance supplying of coins and bank notes to small commercial enterprises as businessmen have not been adequately informed, and there practical problems as well. An effort is also being made for banks to supply through ATMs notes of 10 and 20 euros, rather than of 20 and 50 euros as originally planned. Thomas said the European economy cannot run very fast in its present state and cannot meet the economies of other countries on the same terms. When the US economy ‘runs,’ it does so at rates of 5 or 6 percent, but the European economy can only run at 2 or 3 percent. We may be in a better macroeconomic position than other countries, protected from outside shocks, but we have not yet developed the momentum to become the locomotive of the world, he said. Thomas estimated that the growth rate in the eurozone will be around 1.5 percent both this year and next. The Association of Supermarket Companies (SESME) has announced it will not accept any price rises from suppliers until the end of February 2002, when the drachma will be completely withdrawn. SESME said in a statement it has already committed itself to ensuring, both to consumers and the government, that the transition to the euro and the ban on loss-leader practices (the sale of products below cost to attract customers) as of January 1 will not lead to price rises. Both SESME and respective suppliers’ bodies have signed relevant memorandums with the government.