Europe's new currency is running into difficulty with small companies and banks.

Some bankers have speculated that the problems are pushing down the value of the euro against the U.S. dollar.

The inability of back offices at European regional banks to handle euro- denominated payments has stalled tens of thousands of transactions and has left some banks holding billions of euros worth of unreconciled payments.

"Large corporations and capital markets were ready for the euro, but small and medium-size companies were not," said George M. Doolittle, a senior vice president and managing director at First Union Corp. in London. "There's been a lot of hesitancy and reluctance to move quickly."

Most companies in the European Union countries still invoice in their national currencies.

The euro is unlikely to gain full acceptability until after European companies have dealt with year-2000 computer problems, bankers here said.

"Everybody has decided that they're not going to do anything until it is absolutely necessary," said Anthony Davies, a managing director at Chase Manhattan Corp. in London.

Though the euro was introduced Jan. 4, people and companies are allowed to handle accounts in either their national currencies or the euro until Jan. 1, 2002.

Letting companies wait until 2002 for a full euro conversion will create enormous pressures in 2001, bankers here said.

"So long as the euro remains a memorandum item, no one is going to make the shift," Mr. Davies said. "The transition period is too long, and the pressures that were anticipated at the front end are getting shifted to the back end."

Bankers said many large euro-clearing systems are still not being used. Given the problems reconciling euro payments at regional banks and confusion over currency values, large numbers of Asian and other non- European companies have shifted to billing in U.S. dollars or Japanese yen.

This, some bankers said, has contributed to the steep fall in the euro's value against the dollar-from more than $1.18 per euro in January to $1.06 this week.

"The simple fact is that people are worried about the value of the euro," Mr. Doolittle said. "We haven't seen any real demand for euros from the U.S., and corporations here haven't set up invoicing in euros."

The bankers' observations came as European officials emphasized that the euro's slide has been more a consequence of the U.S. economy's strength than of any shortcoming in Europe.

However, efforts to stabilize the euro have been undercut by European officials' conflicting statements on whether intervention is needed to bolster the multinational currency.

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