Category: Archive

Goodbye punt, hello euro

February 16, 2011

By Staff Reporter

By Stephen McKinley

On Jan. 1, the Irish will say farewell to their currency, the punt, and, along with 11 other European states, embark on a new journey with the common currency unit, the euro.

After the last midnight of 2001, in Germany, Finland, France, Belgium, Luxembourg, Greece, Italy, Austria, the Netherlands, Spain, Portugal and, of course, Ireland, trucks will deliver euro coins and notes to every corner of the countries and retrieve the old currencies for destruction.

Belgium and tiny Luxembourg have shared the same currency for many years already, so in reality only 11 currencies will be replaced.

It is a momentous change, yet one that Europeans appear to be greeting with general insouciance. Economic counselor Breifne O’Reilly at the Irish Embassy in Washington, D.C., said that the Irish general public were in a “wait and see” mood.

“The effect will be considered when it happens,” he said. “At the moment, the effect isn’t being felt.”

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One reason for this is that the Irish have been living with the euro for a couple of years already — bills and receipts, for example, have been tendered in both Irish pounds and euros since 1998. Large electronic payments within the European Union have been conducted in euros as well. Awareness of the coming change has been high.

The next thing that is about to change, however, is the most visible and symbolic: the money in people’s pockets. Hence the Irish government’s recent awareness campaign slogan: “Think euro — the change is in your pocket,” reads one billboard that has been plastered all over Ireland. Since the end of November, the public has been able to buy “starter packs’ of five Irish pounds of euro coins — 6.35 euros, to be precise.

Single currencies have united Europe in the past. During the Roman Empire, buying and selling was conducted with the denarius, a coin usually stamped with the image of the emperor of the day. That currency survived for about 800 years — today’s European bureaucrats planning on beating that track record, and then some.

In World War II, Hitler tried to unite Europe by force and hoped to make the swastika-adorned reichsmark the single currency.

It was the utter collapse of Europe after Hitler’s bid for dominance that led to the founding of the European Union, that in turn has taken 12 of the EU’s 15 members to the momentous moment on Jan. 1: a slow but steady journey toward ever closer, peaceful political and economic union.

But it is a massive undertaking that has been planned for years. Philip Hammel of the Irish Government Euro Changeover Board in Dublin explained some of the changes happening between Dec. 31 and Jan 1.

“After midnight on the 31st, all ATM and cash machines will be shut down, punts will be removed and replaced by euros. The machines will be converted to work in euros. And the majority will be back online by 1:30 a.m.,” said Hammel, emphasizing that the transition ought to be a smooth one. New Year’s Eve revelers have been told that bars and pubs will continue to take Irish currency until last call. The next day, a bank holiday, will be the first day when all change will be given in euros. Feb. 9 is the last day on which punts will be accepted for payments in cash.

“There has been a huge amount of preparation for this,” Hammel said. “The bulk of the currency is already out there.” Most retailers and merchants have taken delivery of euro coins already, so that on Jan. 1, they can give change in euros.

Gradual preparation

In County Monaghan, Raymond Douglas’s business is probably typical — he and his staff have been preparing gradually for the changeover for the last six months.

Douglas runs a glazing and glassworks company called Douglas Glassworks, founded by his father. The factory, situated three miles south of Monaghan town, employs about 30 workers using the latest high-tech computerized equipment to cut and manufacture windows and mirrors to order.

“It hasn’t been as bad as people expected,” Douglas said, ” We swapped over in October. We’ve been running dual pricing on any quotes or invoices. We had our software changed over six months ago, and in December, we started doing payroll in euros.”

Douglas agreed that most of the invisible changes have taken place already, but that the big test will “be getting your head around the actual notes and coins.”

But Philip Hammel in Dublin said that even this will not be so great a change. “It’s a bit like the U.S. in this respect, ” he said. “In recent times you’ve had state quarters, with a state symbol on one side of the quarter” — euro coins will have a pan-E.U. symbol on one side, and a country symbol on the other. In Ireland’s case, this will be the harp.

“For Ireland we’ve minted a thousand million euro coins and 200 million notes,” Hammel said. “There are very, very high quality controls. The notes will be indistinguishable anywhere in Europe.”

However, there are still fears that the scale of the changeover will leave loopholes that will be exploited by criminals. Governments have admitted encountering unforeseen obstacles. For example, the sheer weight of the old and new currencies, coins and notes, was so heavy that special bunkers have had to be built with reinforced floors.

Already, Garda in Limerick found evidence of gangs offering interest-free loans as they attempt to launder their ill-gotten punts. The government has admitted that a lot of counterfeit Irish money could be spent in the last few days of December, with users safe in the knowledge that the soon-to-be-destroyed currency will never be detected.

On this side of the Atlantic, any significant amounts of Irish cash should be taken to a bank and converted into dollars before Feb. 9. Generally, O’Reilly said, the impact will be felt minimally by the general public in the U.S. On European visits, Americans will be able to enjoy the ease of traveling from country to country without worrying about an array of confusing money with different values. An official at Country Bank in New York noted that there had been a “small trickle” of Irish coming in and changing small amounts of punts into dollars.

In spite of massive planning and preparation, there is still plenty of uncertainty and one of the most interesting cases is that of Northern Ireland. As part of the UK, Northern Ireland will still use sterling. But will Northern Irish retailers gradually list prices in sterling and euros in order to appeal to customers from the south? Philip Hammel thinks yes, especially in areas close to the border.

“If there’s a business reason for doing something, people are going to do it,” he said.

As Ireland’s 73-year-old currency comes to an end, there seems to be little nostalgia for it, barring the raising of a few pints in farewell on New Year’s Eve, as customers throw their last few punts across the bar. In Monaghan, Raymond Douglas seemed to typify the national, and the European, mood of progress. Would he miss the punt? He paused and thought for a moment.

“No, I don’t think so,” he said. “There’s no general feeling of wanting to hang on to the punt.”

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