Getting to Know the Euro: Some Tips for Tourists

So at last the euro is here. American Express has printed special Travelers Cheques. The euro logo, a sort of sideways trident, peeks from the windows of forward-looking retailers. Already, sellers of black-market cigarettes and fire-department damage estimators are reporting their numbers in local currency and euros.

But if international money-handling were an Olympic event in 1999, 2000 or 2001, the euro would be a demonstration sport.

Euro coins and bills don’t go into circulation until January 2002, and national currencies of participating countries (Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain) won’t be banished from circulation until six months later, on June 30, 2002.

Thus, in the nations of “euroland,� the euro’s main role for now is to hover behind every credit-card transaction and every trade of one national currency within euroland for another. Here are some questions and answers for Americans planning to head to Europe soon:

So what changed on Jan. 1? Even though it’s still invisible, the euro became the monetary common denominator for 290 million Europeans. It was designed to boost efficiency and strengthen the economic clout of its 11 member nations, but it will also simplify life for American tourists and save them a few dollars.

“We estimate that somewhere in the neighborhood of 5% of all travel costs are essentially currency conversion [expenses],� says Mike Sherman, vice president for corporate relations at Visa International. The savings may not show up in any single transaction, but as the European economy becomes more efficient, with expenses reduced and prices trimmed, Sherman suggests, “you’re going to see travelers with 5% more in their pockets.�

Not everyone is that optimistic about savings, but the new way will eventually be simpler than the old. Shortly before Jan. 1, the euro’s value was locked in against the franc, the lira, the peseta and the eight other currency cousins. Now, doing battle on their behalf against the world’s other currencies, the euro floats against the dollar, yen and others. In its first few weeks, the euro’s trading rate versus the dollar has fluctuated between $1.15 and $1.20.

Will I have to handle money differently on my next trip? Probably not. Credit cards are still the most prudent way to do most of your spending, many veteran travelers agree, and as ATMs continue to proliferate, they get easier and easier as sources of walking-around money in local currencies.

At Montrose Travel, a large San Gabriel Valley agency, senior travel counselor Dan Wise welcomes the currency simplification as a boon for American travelers. But until the euro is available as cash, he’s telling his Euro-clients to stick with their existing habits.

“The only time that they’re going to see anything different is on their credit card bill,� which may list a euro price alongside the dollar price, Wise says.

What happens when I buy something with a credit card? A few euroland merchants already have euros built into their billing systems, and their numbers are expected to grow in coming months, especially in heavily touristed areas like airports. At the moment, when you make a credit-card purchase, most merchants will probably hand you a charge slip calculated in their national currency. When you receive your statement at home later, it will include the national currency and a dollar amount, but no euros.

The most rapidly adapting merchants, however, can give customers a choice between charging in euros or national currency. If you choose euros, charge company officials say, that transaction entry on your statement will include figures only in euros and dollars.

So what do those euro logos in the shop windows mean? That the merchant displays at least some prices not only in his national currency but also in euros. But a logo in the window, authorities say, is no guarantee that the merchant inside is equipped to record your credit-card purchase in euros.

What if I want to fill my wallet with francs or lira or another lame-duck, old-world currency? Until July 1, 2002, no problem. When you exchange money, your dollars first will be translated into euros (with the exchange company taking a profit in the difference between the fluctuating buying and selling prices, just as before). Then the invisible euros will be traded for your chosen currency.

If I need to trade francs for lira once I’m in Europe, will the transaction be free? Probably not. The exchange rate will be locked in. But European Travel Commission spokesman Neil Martin notes that money-changers are permitted to charge a handling fee, which must be clearly posted.

Can I buy euro travelers checks? Yes. Companies offering them include American Express, which has 50-, 100- and 200-euro travelers checks now in circulation. Visa has come out with euro travelers checks, too, and markets them through Thomas Cook exchange bureaus. As this year advances, the checks are likely to become available from more sources. (One potential drawback to shopping with travelers checks, however, is that the transaction will probably leave you holding change in a national currency. With a charge-card purchase, there’s no change to handle.)

For how long after the June 30, 2002, switch-over will it be possible to exchange national currencies for euros? “Traditionally,� says a European Union fact sheet, “old cash is exchangeable for new notes and coins for several years after it has ceased to be legal currency, and there is no reason to assume this will be any different for national currencies replaced by the euro.�

What if I have more arcane questions? On the Internet, try the European Union’s official euro page: https://europa.eu.int/euro/.

Reynolds travels anonymously at the newspaper’s expense, accepting no special discounts or subsidized trips. He welcomes comments and suggestions, but cannot respond individually to letters and calls. Write Travel Insider, Los Angeles Times, Times Mirror Square, Los Angeles 90053 or e-mail [email protected].