Europe’s Ecu Gaining as Coin of Realm

KEERBERGEN, Belgium —  Foreign guests at the Berkenhof luxury inn needn’t worry about having enough Belgian francs or translating from francs to their own money.

In Jean-Pierre Koch’s elegant hotel-restaurant, surrounded by towering pines and blooming spring flowers, prices are figured in the Ecu, which may be Europe’s currency of the future.

Ecu stands for European currency unit, the once-obscure accounting device used by the 12-nation European Community as it plans an economic union with a single central bank and currency.

Some pronounce it eh-KOO, others EH-cue. Its value, now about $1.24, is calculated on the basis of the community’s dozen currencies.

No Ecu notes or coins exist so far, but the unit is used increasingly to denominate bonds.

Visionaries say that will change. Within this decade, they see the Ecu pushing aside the British pound, French franc and German mark to become the trading bloc’s only money.

“A common currency is essential,” said Daniel Gros, senior research fellow at the Center for European Policy Studies in Brussels.

Henning Christophersen, an EC vice president, agrees a single currency is needed, he said, to “make the creation of EMU (economic and monetary union) a more irreversible thing.”

“Symbolically, it’s extremely important” and “will help in fostering a common European identity,” said Yehuda Lukacs of American University in Washington.

Leaders of the EC nations began negotiations in December on changing the 1957 founding treaty to bring about the economic merger. Other bargaining looks to a political union with common policies in foreign and security matters, possibly even defense.

The ultimate goal is a loosely knit federation of the 12 EC members: Belgium, Britain, Denmark, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain.

For Europeans and foreigners alike, the single currency would be the most visible sign of a monetary union.

For Koch, the restaurateur, the Ecu makes sense.

“It will be easier for people who travel to compare prices,” he said at his hotel north of Brussels. “You will no longer lose money” changing currencies. “You will no longer lose time.”

His restaurant accepts payment in Ecus either by check or charge card.

“We believe in Europe,” is the way Koch explains his policy, but acceptance of the Ecu as Europe’s only money is not inevitable.

Britain has doubts. Instead of making the Ecu the single community currency, the British suggest it be a 13th, for commercial use.

Finance Minister Jean-Claude Juncker of Luxembourg favors allowing those who want a quick monetary union and a single currency to have it, with the others to join later.

John Major, the British prime minister, has dismissed a two-speed system as “fatal for Europe,” but also has softened Britain’s position since succeeding Margaret Thatcher, a fiery opponent of European unity.

Major has said he opposes a single currency but will go along if “peoples, governments and markets so choose.”

Community officials believe negotiators will produce a compromise this year that does not mention creating a single currency on a fixed date, leaving a final decision for later.

Other contentious issues remain.

Germany, known for strict economic policies, wants fellow EC members to meet its standards, but the economies of Spain, Portugal, Ireland and Greece are no match for the German powerhouse.

Italy’s deficit spending is “a significant stumbling bloc” to economic union, a community source said, on condition of anonymity.

Spain wants wealthier members to subsidize poorer ones. Some richer nations favor penalizing any country that strays economically.

All but Britain have agreed a central bank should be established Jan. 1, 1994, called Eurofed and patterned after the U.S. Federal Reserve. Plans call for a fixing of internal exchange rates about three years later and a single currency by 2000.