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Saturday, October 24, 1998

Euro gains acceptance; wins over sceptics 

Nick Antonovics  
Brussels, Oct 23: From demand for chocolate Euros to opinion polls, the evidence is clear: the single currency has now gained acceptance among even the most ardent sceptics.

When corporate confectionery maker Belgium's Best mailed banks across the continent in March to persuade them to buy its new line of Euro coins it did not expect any replies from Britain, one of four European Union countries not joining EMU.

"We did not expect anything whatsoever in the U.K. but we got...two or three sales," said managing director Guy Desseaux.

Desseaux believed the decision, rubber stamped in May, to launch economic and monetary union (EMU) with 11 countries led to a sea-change in attitudes towards the new money.

"There's an evolution of course, because people know more and more about it," he said, noting Euro information campaigns were now common throughout the EMU bloc.

Desseaux's anecdotal evidence is backed up by the latest European Commission surveys, based on monthly telephone polls of 800 people in eachEU country (1,600 in Germany).

Surge In Support

These polls, which are not normally published, indicate support has surged this summer -- a period when Euro zone politicians and central bankers praised how the new currency was a "safety belt" protecting the bloc from a financially-troubled global economy.

The rise in support appears especially strong in countries not taking part in EMU from January and whose currencies and bond markets have come under speculative attack.

When the Commission conducted its twice-yearly public Eurobarometer poll this spring, when the EMU decision was already known, it found support for the Euro already up sharply to 60 per cent from the 50 per cent level of the past five years.

The monthly polls conducted since for use by the Commission's services show support now near 70 per cent, and higher among the 11 countries due to launch the Euro in January.

The latest poll, from September, found support even in EMU abstainers Denmark, Sweden and Britain at 50 per centor above for the first time and up sharply since the previous July poll.

There was no poll in August, when Russia's devaluation of the rouble sparked renewed chaos on financial markets around the world and fanned expectations of a global economic slowdown.

Support matched in other surveys

Privately-sponsored surveys have produced similar results.

In a poll published last Saturday, Sweden's SIFO institute found opposition to the Euro had dropped from 51 to 44 per cent between May and September, placing support at 39 from 32 per cent.

Two out of three recent polls in Denmark showed EMU supporters outnumbering opponents for the first time since the country rejected membership of the single currency in a 1992 referendum.

Both countries saw their currencies suffer this summer as the fallout from the Asian and Russian financial crises gathered pace, while neighbouring EMU bloc monies were stable.

Swedish central bank deputy governor Stefan Ingves on Tuesday directly attributed the turmoil tothe uncertainty created by Sweden's decision not to seek early EMU membership.

"We have been able to see recently that this has given rise to certain uncertainty on the currency markets even if the underlying economic conditions have hardly changed," Ingves said in a speech.

The head of the Danish parliament's European affairs committee Jacob Buksti suggested last month the country could bring forward a referendum on EMU should its "out" status cause it further problems in the future, although Danish government members said there were no such plans.

Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.


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