Tне EURO grand entrance

The EURO is the name of the new European currency. The EURO makes it easier to travel and to compare prices, and the common currency gives a stable environment for business, stimulating growth and competitiveness. On January 1, 1999, 11 of the European countries adopted the EURO: Belgium, Germany, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal and Finland. On that day of conversion rates between the EURO and the old national currencies were fixed. January 1, 2001 is the date when Greece also became a part of the EURO zone.

Now - some details about three-stage launching of a new currency.

January 1, 1999 - December 31, 2001

> National currencies remain legal tender; the use of EUROs is optional. Supermarkets, department stores and other major retailers display prices in both EUROs and national currency (many have begun in 1998) and accept credit card and debit-card payments and checks in EUROs. Cash registers now automatically convert to EUROs;

> Consumers may choose to pay for mortgages, rent and utilities in EUROs;

> Banks and credit-card companies offer the option of accounts in EUROs;

> The European Central Bank sets a single monetary policy in EUROs; foreign exchange transactions are done in EUROs;

> Businesses may make settlements with each other in EUROs by mutual agreement;

> Stock exchange and other financial markets begin doing business in EUROs;

> Consumers and workers get introductions to the EURO through videos, seminars, brochures and the media.

January 1 - June 30, 2002

> EURO bank notes and coins go into circulation and member states start withdrawing national bank notes and coins, which are still legal tender;

> Retailers complete their transition to the EURO.

July I, 2002

> Deadline for the withdrawal of national bank notes and coins from circulation, they are no longer legal tender.

The introduction of EURO represented the last phase of the "single market concept". This concept outlined a European market in which all obstacles to free circulation of persons, goods, services and capital would be removed. Currency fluctuations were a final obstacle that could not be eliminated for a long time.

Economically the EURO is meant to complete the European single market, cross-border mergers, improving price transparency and eliminating exchange-rate risk. Enthusiasts also hope it will be a rival to the hegemonic dollar.

Now the EURO is viewed as a strong and stable currency that is supposed to resolve these problems and complete the process of European unification. The EURO is a real currency. Its value is based on the values of the most stable European currencies.

Read the text Money and match the English equivalents of the following:

Бути загальноприйнятим для оплати, коливатися, накопичувати, бути вартим менше бартерна економіка, головна перевага грошей, тривалість життя, гравіювання,

накопичення цінностей, високоякісний папір, підробляти, вартість грошей, мірило цінності, засіб обміну, встановлювати ціну, валюта, дозволяти, монети, банкноти.

Money can be anything that is generally accepted in payment for goods and services.

Although anything can serve as money, as a practical matter the material should possess the following qualities:

Stability. The value of money should be more or less the same today as tomorrow. In societies where value of money fluctuates {goes up and down) people will hoard it in the hope that its value will increase, or spend it immediately thinking it will be worth less tomorrow. Either action could be harmful to the economy.

Portability. Modern money has to be small enough and light enough for people to carry. Bowling bails would not be a practical form of money.

Durability. The material chosen has to have a reasonable life expectancy. For that reason most countries use a very high quality paper for their money.

Uniformity. Equal denomination of money should have the same value. It's easy to see that if some quarters or dollar bills were worth more than others, things could be pretty confusing.

Divisibility. One of the principal advantages of money over barter is its ability to be divided into parts, in other words, while making change for a dollar is easy, making change for a chicken is more difficult.

Recognizability. Money should be easily recognized for what it is and hard to copy. The quality of the paper and the engravings make paper money extremely difficult to counterfeit.

We can also define money by what it does, which is to provide: A Medium of Exchange; A Measure of Value; A Store of Value.

A Medium of Exchange. The principal difference between a barter economy and a money economy is that in a barter economy you must find someone who has what you want and wants what you have. In money economy people can sell what they have to anyone and use the money to buy what they want. Money, therefore, is the medium that enables exchanges to be made easily.

A Measure of Value. Money enables us to state the price of something in terms that everyone can understand. We can say the eggs we have for sale are worth 85 cents a dozen. That is far simpler than having to figure out how much milk or meat or clothing we would expect in payment for a dozen eggs.

A Store of Value. Money enables us to use the value of something that we sell today to make a purchase sometime in the future. For example, our egg seller could put the money from the day's sale toward a college education sometime in the future. You can imagine the difficulties if that person tried to save one or two year's worth of eggs toward a college education.

Currency. The money you are most familiar with, currency, consists of the paper money and coins that you almost use daily.

Read and dramatize the following dialogue:

А.: In what currency will payments be made?

В.: We'll provide for payments in local currency in our contract.

А.: Is currency conversion allowed under your local legislation?

В.:Yes, it is.

А.: How will currency fluctuations be taken into account?

В.: To avoid currency losses we shall provide for a currency clause in our contract.

А.:How will the currency be exchanged?

В.: At the rate of the day.

А.: To avoid currency losses we suggest including into the contract a currency clause pegging the currency of payments to SDRs in US dollars.

В.: No objections. And in what cases will payments be adjusted?

A.: Payments will be adjusted if the cost of one SDR changes.

В.: We believe that you will use the adjustments of the International! Monetary Fund.

A.: Yes, certainly. Please note that if the amount of the letter of credit is not sufficient the Customer will have to increase the letter of credit accordingly.

Read the general information below that advises people what sort of money to take with them when travelling abroad. Answer the following questions. 1. How many different methods of carrying money are mentioned? Name them. 2. Which method is the most preferable for you? Share your ideas with the entire class. DEALING WITH FOREIGN CURRENCY AND MONEY ABROAD Money - usually the lack of it - is a universal problem for travelers, whatever the amount they take there are some ways to carry it. Since each has both advantages and disadvantages, a combination of two or three is advisable, taking into account financial circumstances as well as destination. Traveler's checks: will be replaced if lost or stolen, theoretically within 24 hours. Foreign currency: carry a full amount (for taxis, porters, telephone calls, tracks) until you can get to a bank. Most banks need advance notice of your requirements, otherwise change currency at the airport or port (though exchange rates are less favorable). The commission and rate of exchange vary but shopping around is rather impractical. Some countries restrict the amount of their currency that you can import. You should also carry some currency for necessary expenses when return. Credit cards: Access (linked to MasterCard in the US and EUROCard in Europe) and BarelayCard (linked to Visa) are accepted in nearly 5 million outlets each though they vary in their acceptability – BarelayCard, for example, is stronger in France, Spain and Italy, whereas Access is most useful in Germany and the US. They may also be used for cash advances and instead of a deposit on car hire. Charge cards: American Express and Diners Club are less widely accepted than credit cards and the interest-free settlement period is shorter but there is no pre­set spending limit. In addition to the initial starting and annual fee for the cards, both charge one percent processing charge for bills converted back into currency. EUROchecks: can be used to withdraw local currency as well as pay for hotels, restaurants, garages and other services. The checks, made out to the exact amount you require, are then debited to your account in the same way as a domestic check.  

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