EURO INTRODUCTION IMPACT ON


THE EAST








By Radulescu Cristian Robert
Seria D grupa 121
Fac de Management



The euro will change the lives of people living in Western Europe when it is introduced into circulation at the start of next year. But it will also affect people living in Eastern Europe and the former Soviet Union, where the German mark is widely held and used as a transaction currency. Those marks will cease circulating shortly after the euro's introduction. In this third of a three-part series on the common currency, RFE/RL correspondent Mark Baker looks at what impact the euro will have outside the 12-nation euro-zone.
Prague, 15 June 2001 (RFE/RL) -- The German central bank (the Bundesbank) estimates that more than one out of every three German marks circulates outside of Germany -- signifying billions of marks. The banks says the majority of them are in Eastern Europe and the territory of the former Soviet Union.
Because of the mark's stability, and Germany's role as a place of employment for Eastern European workers who send their money home, the mark has evolved into a de facto second currency in the lands to the south and east of Germany's borders.
Montenegro and Kosovo have even adopted the mark as legal tender. Other countries have pegged their currencies to the mark through currency boards. Bosnia uses a unit of exchange called the "convertible mark," which trades on a one-to-one basis with the German mark.
But the mark -- along with the other currencies of the European Union's 12-nation euro-zone -- is about to disappear.
On 1 January 2002, more than 250 million people in Western Europe will begin exchanging their national currencies for the euro. Older currencies and euros will circulate together until the end of February. After that, the national currencies will no longer be used.
That does not mean the currencies will be worthless. Central banks will continue to exchange them for euros