CITY AND SUBURBAN
The euro in your pocket has not been devalued, but don't bet your savings on it
CHRISTOPHER FILDES
So that's all right then. The euro in your pocket has not been devalued. Wim Duisenberg says so. It is true that there are no euros in anybody's pockets yet, but soon they will be on the way from the mints and presses of Europe and into the shops. In companies' bank accounts they maintain a furtive presence and are the currency of choice for paying bills. Clever companies borrowed euros from day one and the bur- den of their debt has become lighter ever since. In that time the euro, measured by such old-fashioned yardsticks as the pound, the dollar, or gold, has lost anything up to a fifth of its value. As president of the Euro- pean central bank, whose currency this is, Mr Duisenberg has been trying to reassure the citizens of Europe. Their savings, he tells them, are perfectly safe in the euro. As he speaks, that earnest Dutch face and its thatch of white hair seem to shimmer and transform themselves into a pudgy image from the days when television broadcasts came in black and white. Yes, it is Harold Wilson, looking (as he would say) gritty and purposeful, telling the nation that, after three years of hard pounding, the pound had been knocked off its perch. He, too, sought to reassure the citizens. They would think, so the Treasury feared, that a deval- ued pound was no longer worth (in those pre-decimal days) 20 shillings. 'The pound in your pocket,' he told them, 'has not been devalued.' It had, though. It went on to lose nine-tenths of its purchasing power. A coin cannot have two sides with two different values, heads strong and tails weak. Mr Duisenberg knows that. His political mas- ters may think they know better, but they have thought that since this ill-conceived project began.
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