There was no disguising the delight at Frankfurt's stock exchange this week following Monday's smooth launch of Europe's new currency. "A dream start for the euro," trumpeted the Handelsblatt financial daily, while the mass circulation Bild proclaimed that the euro was "as strong as a bear".
German stocks soared on Monday as traders were swept up in a wave of "euro-phoria" but, by yesterday, many euro-powered gains had already been lost. Unexpectedly poor results from the software maker SAP set the gloomy tone in Frankfurt but a nervous mood reflected a sense of uncertainty about the implications of Europe's new currency.
Despite the lengthy, painstaking preparations for the euro launch, most bankers and traders in Frankfurt admit that they are assessing the new currency's impact hour by hour.
Most agree that they will have to "Europeanise" their portfolios and many are taking a keen interest in Ireland as one of the few euro-zone regions showing strong growth. In this context, the DAX is becoming less important for German traders as the Europe-wide Stoxx becomes more interesting.
"The national indices are becoming less important minute by minute. The Euro Stoxx is the new star," according to Mr Christoph Burns, a fund manager at Union Investment in Frankfurt.
The Frankfurt stock exchange has been talking of nothing but the euro for days and even the most ungenerous critics admitted that the exchange handled the launch immaculately. But, beyond Frankfurt, the introduction of the euro has had a quieter impact and few Germans feel as if much has changed.
Small businesses are generally ignoring the introduction of the new currency although big firms such as DaimlerChrysler, Hoechst and Deutsche Bank have already converted their entire accounting systems into the euro.
"For a company to convert to the euro on January 1st, 2002 is like driving a sports car into a concrete wall at 250 km per hour," according to Mr Wolfgang Hartung, who is in charge of DaimlerChrysler's conversion to the euro.
The firms that are converting early are hoping to steal a march on their competitors by getting over euro teething problems now rather than later. The business of converting accounts costs millions of pounds but many businesses are more worried about another possible cost of the euro - pressure to reduce prices.
German consumers have long complained that, although Germany manufactures more cars than any of its neighbours, cars are more expensive than in most European countries. The European Commission estimates that car prices in Germany are 4 per cent more expensive than in Italy, 5 per cent higher than in France and an astonishing 11 per cent more than in the Netherlands.
At present, such price differences are masked by exchange rates but once everything is priced in the euro, German manufacturers will not long be able to resist the pressure to cut prices. For a company like Volkswagen, such price cuts could cost more than 1 billion deutschmarks (511 million euros).
The German government declared yesterday that the euro had passed its first major test with flying colours, a verdict few would contradict. But its biggest test will be to win the confidence of the public, particularly in Germany, where currency stability has long been so highly prized.
Some observers feared that the noisy clashes between Germany's Finance Minister, Mr Oskar Lafontaine, and the president of the European Central Bank (ECB), Mr Wim Duisenberg, would undermine confidence in the euro.
In fact, they may have had the opposite effect, as the reassuring Mr Duisenberg was seen to stand up to the Finance Minister's attempts to influence central bank policy.
Most Germans will learn to love the new currency if they perceive the ECB as an expanded Bundesbank and the euro as the deutschmark by another name. As the former Finance Minister Mr Theo Waigel once put it: "Der Euro muss Deutsch sprechen" (the euro must speak German).
The euroview column, written by staff and contributors in the different euro markets, will appear weekly
