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No joy in euro's rise - EMUbusiness - Issue 27

EMUbusiness - Issue 27
19 September 2001
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EMUbusiness top stories
1. Reynders puts early availability of euro banknotes on agenda
2. Banks making significant progress on euro changeover
3. EU candidates should take their time before joining EMU
4. Deutsche Bank advocates simpler approach to monetary policy
5. Vending industry claims it is being ignored

Publisher's Note
In the last few days, the euro has strengthened against the
dollar. One might almost say 'Alas!' These are not the
circumstances under which I would have wished to see a euro
recovery. A recovery based on political circumstances of the worst sort rather than economic fundamentals was not what any of us would have wanted. I am writing this exactly one week after the tragic events in New York. To the readers of this newswire who are in the United States, may I take this opportunity to offer my sympathy.

Marion Bywater
Publisher, EMUbusiness

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1. Reynders puts early availability of euro banknotes on agenda
The decision not to provide consumers with euro banknotes in late December is irrevocable, according to Belgian Finance Minister and Eurogroup President, Didier Reynders. There can be no question of reversing the decision that while starter packs of coins will be available sale from mid-December, there will be no notes until January 1. Nevertheless, Reynders told a conference in Brussels on September 19, he is asking the European Central Bank and euro-area states to look at the possibility of loading euro notes into some ATMs just before the New Year. The significance of this measure is that it would go some way towards meeting the fears of some retailers that not enough is being done to get notes into circulation quickly at
the beginning of next year.
Full story:

2. Banks making significant progress on euro changeover
Banks are making significant progress in their preparation for the euro changeover, the European Commission has concluded. Commenting on the results of a second survey on bank preparations, Pedro Solbes, EU Commissioner for Economic and Monetary Affairs, said he was very encouraged by the way the banking sector has endorsed the Commission's recommendations on the changeover. Further efforts were clearly needed in some countries and by some banks, he said, but "I am confident that by working all together we can succeed."
Full story:

3. EU candidates should take their time before joining EMU
Countries which are candidates for EU membership should not try to meet the convergence criteria for Economic and Monetary Union prematurely, European Economic and Monetary Affairs Commissioner, Pedro Solbes, said in Budapest September 13. He urged these countries to concentrate in the run-up to accession on structural and economic reform leading to strong, well-functioning market economies. This also requires build-up of the appropriate administrative and institutional capacity.
Full story:

4. Deutsche Bank advocates simpler approach to monetary policy
The European Central Bank's approach to monetary policy is too complicated and internally contradictory, the Deutsche Bank has concluded in what it calls an interim assessment of whether the so-called two-pillar approach is working. It says the Bank should target inflation and nothing else.
Full story:

5. Vending industry claims it is being ignored
The European Vending Association is calling for words of support for small and medium-sized businesses to be translated into action. It says its requests for a meeting with the President of the Ecofin Council to discuss the costs to the industry of the changeover to the euro "are so far only being ignored." The cost to this industry of the changeover will be "dramatic", it warns in a new statement.
Full story:

These articles are provided by Euro-impact. Euro-impact is a monthly newsletter on the regulatory, practical and strategic impacts of the euro for companies. Articles may be reproduced with acknowledgement of the source and Euro-impact. Every reasonable effort has been made to ensure the information is correct at the time of writing.
Coming in the October 2001 issue of Euro-impact: How patterns in wholesale trade in banknotes will change from next year; the latest on SME preparation; the lessons to be learned from Carrefour's pilot projects; European Commission conference on cross-border payments; new study shows how queues will build up early next year.
The latest issue of the monthly newsletter on the impact of the euro can now be downloaded for GBP 55 + VAT. . For subscription
information .

Other stories on EUbusiness in September

ECB follows US rate cut
Following an earlier announcement by the US Federal Reserve that it was cutting its federal funds rate by half a point to 3 per cent, the European Central Bank on Monday cut the benchmark euro-zone interest rate by half a percentage point to 3.75 per cent. The ECB's action came as a surprise to the markets, who had expected the bank to wait till the Governing Council's next meeting in 10 days' time.
Full story:

Euro-zone government surplus 0.3%, debt at 69.6% of GDP in 2000
Debt ratio to GDP continued to decline last year, while the
government balance of both the euro-zone and the whole EU15
moved into surplus. New Eurostat figures for 2000 show that even excluding UMTS licence sales the declining trend in the government deficit continued.
Full story:

Euro-zone, EU15 GDP rises 0.1 pct in quarter, but rate slows: Eurostat
Gross domestic product grew by 0.1 per cent in the second
quarter of this year over the first quarter in both the euro zone and EU15, Eurostat said last Thursday.
Full story:

French leftwing presidential candidate calls for delay in euro changeover
An outside, leftwing French presidential candidate has called for a delay in the changeover to euro cash in the euro zone, citing instability created by terrorist attacks in the US.
Full story:

Fall in producer prices led by energy sector
Industrial producer prices fell by 0.4% in July in the euro-
zone, and 0.3% in the EU as a whole, compared with the previous month. Eurostat said the figures confirmed the slowdown of price rises recorded since October 2000.
Full story:

This newsletter is produced in association with FEE, the
Federation des Experts Comptables Europeens. FEE is the
representative organisation for the accountancy profession in Europe. It is a "non profit" organisation which groups together 38 professional bodies from 26 countries, including all 15 Member States of the European Union and the 3 main member countries of EFTA.
The FEE Euro Information Service is at:

Internet Monitor

Eurosystem's tender operations
The European Central Bank has announced changes to the
indicative calendar for the Eurosystem's tender operations in 2002. Press release:

Frontloading outside the euro area
On 13 September, the Governing Council decided that from 1
December national central banks of the euro area may frontload non-euro area credit institutions specialising in the wholesale distribution of banknotes, subject to certain conditions. Press release:

Duisenberg's testimony
The European Central Bank President's statement to the Committee on Economic and Monetary Affairs of the European Parliament in Brussels on 12 September:

EMU diary
22-23 September, Informal ECOFIN Council, Liege
16 October, ECOFIN Council, Luxembourg
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