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James Skinner
The European Union have decided to upset all this Dickensonian world of international trade transactions. They’ve invented the wretched Euro!

‘January 1st marks the beginning of a new era. Twelve European Union states will introduce the Euro, the new common currency. The Economist, in its December 1st edition has amply analysed its effects, its pros and its cons, and its impact on the future of Europe as governments, businesses and citizens begin to taste the introduction of the new bills and coins. From practical handling difficulties by retailers and the rounding up or down from the old currencies, to price differentials of goods and services between countries, the survey has been written in a thorough and professional manner. Although it covers the impact on Europe as a whole it does not touch on, for obvious reasons, the intricate peculiarities of individual cases.

Old standing historical commercial transactions across borders happens to be one of them. A typical example is that between the towns of Valenca in northern Portugal and Tuy, Galicia (Spain), two border towns separated by the river Minho. Without delving into the vast historical background of both countries, suffice to say that Portugal was, ‘off and on’ a part of the Spanish Empire. Following a war that lasted for decades, Portugal finally attained its independence in 1668. Galicia on the other hand, floated throughout the centuries in a kind of ‘no-mans-land’ of feuding amongst royal families, tribes, religious fanatics and other misfit factions. Although it ended up as an autonomous Spanish region in today’s Europe it somehow managed to maintain an identity of its own. It does however, share a great deal of common interest and customs heavily interwoven with its Portuguese neighbour.

Valenca and Tuy did not escape these historic feuds. In fact they were a sort of cross over point between both countries. The extremely beautiful and preserved fortifications of both towns were built in 1661 and are today’s most important tourist attractions. Although strife continued to plague the peninsula in the XVIII and XIX century, with the usual war mongering assistance from France and Britain, progress finally came to unite these two important border communities. The Eiffel Company built the first railway and road bridge across the river in 1881-1884, and in 1993 the new bridge linking the North South European motorway finally brought together both countries under the European Union banner. Trade, of course, managed to survive centuries of military and political differences.

Everyone loves coffee and foreign currency. Despite years of dictatorships in both countries that followed on from WWII which brought about extreme border controls, the Galicians always found a way across the River Minho to continue their traditional trade with their counterparts in Portugal. There was no problem in the usual bartering process as their language (Galician) is a mixture of Castilian and Portuguese. Galicians affinity for coffee, hand woven linen and other exotic ‘foreign’ elixirs, soon brought about a regular exchange of Portuguese ‘colonial’ products for hard Spanish currency. Before the economic growth of the 60’s and 70’s that introduced massive motor transport, human movement across the bridge was confined to broken down post war buses and, naturally, the north south international train. The Wednesday ‘ferias’ were always a must for most Galician housewives. The whole process was a real weekly adventure. But not all trading was strictly legal.
‘I remember years ago, how smuggling and poaching was the order of the day along the banks of the river. The bribing of border officials permitted a complete lack of control of the Minho’, said Francisco Sanchez, the 84 year old retired head of the Marine Administration in Tuy. ‘I tried to put a stop to it then by prohibiting the tips, yet the ‘uppers’ couldn’t do without their monthly coffee intake’, he adds. Other more mundane trading tended to be both-ways. Fat ladies dressed in mourning dresses carrying heavily laden baskets on their heads would walk for miles to bring their agricultural products to market. Anything ranging from local cheeses to a recently slaughtered pig would attract the foreigner to the weekly marketplaces on both sides of the river. Border trade throughout the world is no different, although in those days it was confined to ‘innocent’ products. Today’s illegal trafficking is much more lethal and dangerous and its complexity goes beyond the mere payment of a few shekels to the under nourished border controllers. But what about the money?

Oddly enough, and avoiding the introduction of incomprehensible economic formulae and statistics, the Spanish Peseta and the Portuguese Escudo have managed to maintain a consistent differential. The peseta has always been ‘slightly’ higher than the escudo – 20 % to be exact. Nevertheless, Portuguese banks thrive with exchange rate outlets that have popped up like mushrooms along the Valenca High St. Regardless of these facilities, the Portuguese retailers, from bars to supermarkets will willingly accept pesetas from Tuy’s buyers, albeit with that little extra ‘profit’ on the exchange rate. The pigs are still being slaughtered and the fat ladies continue to bring the ‘pieces’ to market, smiling, as they place the exchanged ‘duros’- the Spanish currency nickname - into their grubby handbags. But trouble is looming from up North. The European Union have decided to upset all this Dickensonian world of international trade transactions. They’ve invented the wretched Euro!

‘I think it will make things easier all round’, was Pedro Jimenez, a local Galician bank manager’s answer. ‘To start with, the percentage difference that we charge on exchange rates will disappear. The modern cash machines will only charge a fixed usage rate. Goodbye to the extra exchange rate charge,’ he added. His final statement was: ‘modern banking institutions no longer depend on profits from exchange rates. In fact they are more trouble than its worth. Good riddance to the peseta and the escudo’. Josefa, a Valenca wine shop owner was not so sure. ‘I think we will have problems to begin with. During the transition period we not only have to deal with the euro and our national currency, but if the Galician’s come with pesetas we have a third currency to worry about’, was her concern. ‘In the long run it will be beneficial, at least we hope so’, she concluded.

The best comments came from a Valenca taxi driver: ‘I’m sure some of my clients will feel that Portugal has been annexed to Spain. Yet again!’
‘Why?’ I enquired.
‘When the Galicians start bringing their Euro coins over here with King Juan Carlos’ head on the reverse side...
Eh!? You figure it out!’

© James Skinner. 2001.

James on Gibraltar

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