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UC Students Witness History In The Making
As Europe Gears Up For E-Day

Date: Sept. 4, 2001
By: Marianne Kunnen-Jones
Photos by Dottie Stover
Phone: (513) 556-1826
Archive: General News

The EC's Jo Vandercappellen talks with UC student Dan Themann

The Belgian and French franc, the Dutch guilder and the Finnish mark will all become history within the next six months. So will the currencies of eight other nations as the European Monetary Union adopts a new common money, called the "euro," beginning Jan. 1, 2002.

That makes the 20 College of Business Administration juniors traveling through Europe this summer witnesses to a very significant moment in European history. This class from UC will be the last in the Honors-PLUS program to tour Europe under a decentralized monetary system. On Aug. 30, the EMU unveiled the look for the new euro notes, which are described as "dull and soulless" in the headlines of one British newspaper.

The trip's itinerary is not letting this turning point pass without student notice. The students on Aug. 30 visited the European Commission in Brussels, meeting with Jo Vandercappellen, EC directorate-general for education and culture. Just the day before, ABN-AMRO, Europe's eighth-largest banking group, provided the students with an opportunity to quiz one of their economists preparing for the transition.

During their stay at Universite Catholique de Louvain in Belgium, the business students also have participated in student discussions led by Belgian professors Marc Ingham and Nathalie Tousignant.

At the EC are students Jennifer Yale and Kim Hais, with Belgian professor Marc Ingham and UC prof Raj Mehta The groups focused on how European Union policies might affect the strategies, organization and corporate culture of multinational companies.

The students themselves see the advantage it would be to have a European currency -- at least as travelers who are crossing the borders into four different countries within 32 days.

"It would simplify matters tremendously," summed up Dan Themann, a graduate of Cincinnati's Queen of the Rosary Academy who is now an Honors-PLUS scholar majoring in industrial management.

Themann, like the CBA students accompanying him, started with Finnish marks, switched to Dutch guilders two weeks later, is now using Belgian francs for six days and will then make payments with French francs for the journey's final six days in Paris.

Just prior to exiting the Netherlands, Themann discovered that he possessed a surprisingly large amount of Dutch change - about 30 guilders or $15 U.S. Because coins are not accepted by exchanges, including U.S. banks when Americans return home, Themann scrambled to spend as many of the guilders as he could before moving on to Louvain-la-Neuve, Belgium.

Regina Schneider, an Honors-PLUS junior who has traveled to Europe at least four times prior to this summer's tour, agrees that the euro will make future travel less troublesome.

The new European Union currencyBut she will miss the different currencies. "I think we'll miss some of the local color," she lamented. "Dutch money, for instance, is more artistic and modern." Indeed the 50 guilder note - or vijftig gulden note - features yellow sunflowers. Belgian francs of 100 and 200 denominations feature famous figures in music and theater. French money honors prominent figures in literature and art.

From a more academic point of view, Jeri Ricketts, CBA faculty member in accounting and academic director of Honors-PLUS, predicts the new currency will be a very stong one. "It's bound to be," she said. "I am wondering if you can buy futures in the euro."

Although E-Day, as Europeans have dubbed Jan. 1, is the first day that euros will be used by the public, supplies will begin to be distributed Dec. 15-17, said Nico Mensick, economist for ABN-AMRO, a banking group with more than 3,500 branches, 110,000 employees and assets around 543 billion euros.

There will be a period of time, Mensick explained to the UC students, when nations will allow dual use of the euro and native currencies to assist in a transition that is supposed to be completed by Feb. 28, 2002. The transition period varies from nation to nation, however.

Honors-PLUS scholar Zach Osborne asked what would happen to stashes of old currencies that are not discovered until years from now. Mensick said the old currencies, even if found months or years from now, could be exchanged for euros. As the transition occurs, the old money will be destroyed.

One of the public's biggest worries about the new euro is that it will result in inflation. Mensick said that Europeans fear that when companies convert prices to euros, they will round up to the nearest 95 or 99 cents, in order to avoid prices that end in weird numbers.

"There will be an impact, but we think it will be modest," said Mensick. The inflation rate increase is expected to be in the range of 0.3 percent to 0.5 percent, he said.

Although the UK so far has opted out of the euro system, the new currency is expected to join the Japanese yen and the U.S. dollar as one of the world's three strongest currencies, Europe Commission official Jo Vandercappellen told the students in Brussels. He spoke to the students in an EC conference room at the Van Maerlaat Building, where the students sat in a semi-circular auditorium surrounded by glass booths housing microphones that are used by translators for each nation.

The EU currently includes 15 nations, but another 12 are candidate countries. Where once passports were required to pass over borders, except for Ireland and UK, they are no longer needed, once a traveler has entered Europe.

Step by step, the continent is integrating, Vandercappellen suggested. A unified currency, for example, may put pressure on European nations to formulate common fiscal policies. A Rapid Intervention Force is being discussed for coordinated military responses.

But is Europe fated to become a "United States of Europe?" as Honors-PLUS Scholar Zach Osborne asked Vandercappellen at the EC.

"Anything is always possible," the EC official answered.

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