-Caveat Lector- from: http://www.aci.net/kalliste/ <A HREF="http://www.aci.net/kalliste/">The Home Page of J. Orlin Grabbe</A> ----- Single Currency 11 to Set Sail for Euroland Jan. 1, 1999 PARIS More than 17 centuries after the Romans attempted to establish one currency for all of Europe, 11 European nations are poised to try once again in a momentous leap of faith that monetary union will transform the continent into an economic superpower. On New Year's Day, Germany, France, Italy and eight other countries will begin merging their currencies into a new money called the euro. The merger won't mean the end of marks, francs, lire and the other national currencies until 2002, when euro coins and bank notes make their debut. But as of Friday, the 11 currencies will be immediately and irrevocably linked to one another and to the untested euro, and the look and feel of daily commerce across the continent will be fundamentally altered. If it works as designed, this massive undertaking in its scale and scope the most complex economic transformation ever attempted will create a truly united economic zone for the first time in European history. To the dreamers of Europe, the single currency also is a step toward the more illusory, and contentious, goal of political unification. While a politically united continent remains a distant dream, proponents believe the single currency will help Europeans put aside their linguistic, cultural and political differences and become a global economic rival to the United States. "When we look back at this time 100 years from now, we will find this was a step of historic proportions," said Ulrich Cartellieri, a member of the supervisory board of Deutsche Bank in Frankfurt. "There may be hiccups, there may be problems, but it still will lead to a fantastic economic dynamism in Europe." The enterprise begins Friday, the day after finance ministers from 11 of the European Union's 15 members Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain give their final approval to the exchange values between their currencies and the euro. EU members Britain, Sweden, Denmark and Greece will not be taking part, at least initially. The move to the euro will be an odd transformation, for the first stage of European Monetary Union does not involve cash. The 290 million citizens of Euroland, as the single-currency zone has been dubbed, have until 2002 before they begin paying for their baguettes and Sacher tortes in euro cash. Even so, the real economic transition happens now. On New Year's Day, the 11 national currencies essentially become subdivisions of the euro. The French franc will be more accurately described as 0.15 euros, the German mark as half a euro, the Irish pound as 1.25 euros. The new European Central Bank and its 17-member governing council will assume monetary authority now held by 11 national central banks, deciding on interest rates and inflation policy for all Euroland members. Monetary union will have a swift impact on finance ministries, board rooms and trading floors around the world as the single currency takes its place alongside the dollar and yen as a global unit of exchange. When business resumes after the New Year's holiday weekend, all stock prices in the 11 countries will be quoted in euros, as will all government borrowings. Banks, brokerage houses and other financial institutions will operate in two currencies the euro and their national currency. Tens of thousands of employees of financial institutions across the continent plan on working right up until the start of the first trading day to complete what has been a herculean task of adapting computer software programs to convert stock shares, bonds, deposits and loans into euros in time for the markets' opening bell on Jan. 4. The effects of the transformation will spread through every level of European business and society. A Belgian food wholesaler buying Spanish tomatoes, for example, will no longer have to worry about an increase in the value of the peseta raising the price he must pay in Belgian francs. A Dutch investor deciding whether to buy shares in Fiat can look at the company's bottom line without worrying about whether a devalued lira will dilute his dividends. A Finnish family planning a trip to Germany can compare fares on Lufthansa and Finnair with ease. When added to the EU's near-nonexistent border controls, currency union will ease travel and commerce for millions of people across the continent. "We'll be able to move about Europe just as we now take the Metro," said Casey Slamani, 32, a Paris lawyer who travels extensively for business and pleasure. If the euro is more than cash, say those who dreamed it into existence, it also is more than money. The advent of the euro, it is widely believed on this side of the Atlantic, will create from the euro countries a giant, efficient economic engine whose global weight will far exceed the sum of their economies and banking systems. Alexandre Lamfalussy, a Belgian economics professor who headed the precursor institution to the new European Central Bank, explains the importance of the euro with an American analogy: Imagine the United States with 15 regional currencies. That, in a sense, is what economic Europe is today. "Could you really be a free market with 15 different currencies?" Lamfalussy said. "How could you engage in long-term planning if the exchange rate between Texas and Massachusetts was subject to fluctuation?" To Christophe Lambert, head of a French advertising agency that thinks on a European scale, the euro is one manifestation of a cultural and political coming-together of nations that over the centuries have fought countless destructive wars. "We are witnessing a phenomenal acceleration of history that the euro can only increase," said Lambert, president of CLM/BBDO. "Europe as a political entity is going nowhere, but the Europe of people is coming together incredibly quickly." Indeed, while the euro is certain to define what Europe is, it also will underscore what it is not. Euroland will have a single currency, a central bank and a common monetary policy, but it will still be led by 11 separate governments overseeing 11 distinct economies. It will have a central banker, but 11 finance ministers. Monetary union will tightly mesh the Euroland countries economically, but it will not create a budgetary or political superstructure to oversee them. And while 11 nations can agree on the creation of the euro, they have shown very little unanimity on what policy to pursue in Iraq or, closer to home, Kosovo. A common foreign policy remains a distant dream. The euro also is not Europe. Four of the 15 EU nations are not joining the single-currency club. In Britain, the government of Prime Minister Tony Blair is interested in joining albeit probably not until after the next general election and the City of London, Europe's historic financial center, is busily preparing itself for the euro's launch. But the British population has been skeptical about the continent's single currency, and Britain will not join until voters approve in a referendum. Sweden and Denmark are staying out for similar reasons of skepticism. Greece would like to join but has not come close to getting its economy into the shape required relatively low inflation, budget deficit and interest rates, and a stable currency to meet the membership criteria. Norway and Switzerland are not EU members and thus not eligible to join, and neither wants to. Europe's newest democracies, such as Poland, Hungary and the Czech Republic, will be outside Euroland even as their economies continue to integrate more fully with Western Europe. Critics contend real economic unity is impossible without political unification. Euroland's 11 economies vary enormously in size and strength, and are growing at various rates. They are led by governments of different ideological persuasions pursuing in some cases somewhat disparate policy objectives. Throughout the past year of global economic upheaval, the European economy has shown remarkable resiliency, which has helped smooth the run-up to the euro's launch. But some doubt whether the 11 Euroland countries will be able to hold together in the face of financial-market or currency turmoil, or a severe recession, that strikes closer to home. Others fear that the very benefits the euro is supposed to bring about greater efficiency and competition will meet resistance in some countries whose industries have for decades been protected from the harshest of market forces. Despite these potential problems down the road, monetary unification already has achieved a remarkable convergence among the 11. The 1991 Maastricht Treaty which set out the goal of currency union by 1999 committed euro applicants to applying fiscal rectitude and monetary stability so their economies would be roughly in line by the time the single currency arrived. In the space of a few years, they lowered inflation and budget deficits, in some cases dramatically. A few budget tricks were used as well, but the fiscal discipline helped revitalize the European economy. While many Europeans believe the United States is fearful that the euro will dethrone the dollar as the world's reserve currency, Clinton administration officials contend that the euro will be a boon for the global economy because it will make Europe a stronger trading partner. "If you look around the world today, everything is in the toilet except Europe," said David Aaron, undersecretary for international trade for the Department of Commerce. "If our exports are going to grow back, they will have to go to Europe. I think the euro will have a really positive effect." For the most part, citizens of Euroland agree. In a Louis Harris poll conducted in six euro countries in late November, six respondents out of 10 said the euro would be good for them and their daily lives. The proportion varied by country. Seventy-three percent of the French were favorable, for example, while support in Portugal reached 46 percent. But in no country including long-skeptical Germany did doubters outnumber believers. "I think the euro is a good thing," said Monika Herbst, 52, who with her husband owns a handicraft shop in Berlin. "We'll be able to pay with the same currency everywhere in Europe. Wonderful! For traveling, it's a clear advantage." Herbst was unable to think of many ways the euro conversion will change her life or her business before euro bank notes and coins are introduced. Her store does not take credit cards or foreign checks, and she does not plan to convert her bank account into euros. There is no reason to yet. For individuals and households, the coming of the euro will mean little change to everyday activities. Individuals can write euro checks on their bank accounts if they choose. Their credit cards already work in other countries, but consumers will be able to compare prices more easily. They will be able to see prices in both national currencies and euros in many stores and on their bank statements. For businesses, however, the transition will be immense. Nonfinancial companies do not have to begin pricing in euros and alter accounting practices immediately, though some will. Such well-known corporations as DaimlerChrysler, Philips Electronics MV and Fiat SpA are making the conversion over next weekend, as is every financial institution in the 11 single-currency countries. Many have had teams working on the transition for more than a year. At the Paris office of Barclays Bank PLC retail banking group, for instance, the euro project began in 1996. Employee training culminated in a euro trivia test for 300 employees that even included a final at the Stade de France, the huge soccer stadium in Paris. A full-scale rehearsal of the euro transition was run in early November, and on Nov. 11, the Armistice Day holiday, employees worked while the financial markets were closed. "We created a parallel bank that functioned in euro," said Jean-Bernard Vincent, euro project director for Barclays' retail banking in France. "We have every confidence that things will run smoothly in January." A team of 40 to 50 people will work over New Year's weekend making the final computer changeovers, he said. The euro also will change the operating environment for European business. Already, a spate of mergers within Europe and between European and American companies has enabled companies to position themselves for the greater openness of the euro world. The diminution of currency-trading revenue for financial institutions operating in the euro zone means they will have to cut costs and find new markets, most likely in other countries. Smaller businesses and professionals will take some time to convert. No one except those in finance is required to until 2002, though many are expected to change before then. Rome dentist Marco De Felice, 41, for instance, expects his office will go euro by next September. "If I see that in business the conversion is beginning to take hold," he said, "I'll convert too." The Washington Post, Dec. 27, 1998 History ERWIN ROMMEL, The Desert Fox Fooling the British with fake tanks During World War II, Field Marshal Erwin Rommel, known as the Desert Fox, duped the superior forces of his enemies in North Africa and dealt them a humiliating blow that made Winston Churchill grind his teeth in frustration. Rommel was a devoted soldier and brilliant tactician who perfected the art of seizing victory with only a few pawns. He did not take pleasure in unnecessary killing, and showed great consideration toward his prisoners, so that even his enemies came to respect him. The first time the British experienced his fox-like cunning was in the Libyan desert in 1941. He convinced them that they were being attacked in force by using wooden frames to transform Volkswagens into a fleet of bogus tanks. * * * It was late afternoon on March 31, 1941, when the German forces suddenly attacked the English base at Mersa el Brega in the Libyan desert. An enormous cloud of dust rose against the desert sunset. Bomber planes swooped suddenly from the sky. Believing that the enemy had launched a major offensive to break through their lines, the British troops panicked and fled their base. Rommel had ordered his troops to place the tanks at the front while the other vehicles raised as much dust as possible. By other vehicles, he meant fake tanks---Volkswagens with wooden frames covered with canvas. The first stage of his offensive was a resounding success. Rommel reached the North African front on Feb. 12. The main force of the German Africa Corps had not yet arrived. The British estimated the Germans could not stage a major offensive for some time, but Rommel was to prove them wrong. As soon as he arrived at his post he set up a fake tank factory in Tripoli. A German war photographer who saw the products asked, "General, are those the tanks for our army corps?" "Yes," came the reply. "Except they're fake." Rommel repeatedly told his troops, "The most important thing is to convince our enemies that we have great numbers." In mid-March, a month after his arrival, he paraded his tank division in Tripoli. Rommel's aide, 2nd Lt. Heinz Schmidt, was at first amazed by the number of tanks. As he watched, however, he noticed that one tank with a scratch kept reappearing. The same tanks were being driven repeatedly past the crowds to dumbfound any spies within the local populace. The dust cloud that convinced the British army that they were being attacked by overwhelming numbers was created by cars dragging brooms and chains that followed behind the tanks. Rommel now switched to pursuit. Within a mere two weeks, he forced the British from Cyrenaica, territory which they had spent two painstaking months wresting from Italian troops, and drove them out of most of Libya and back into Egypt. During this campaign, Rommel came across a pair of dustproof goggles in an occupied British base. Clapping them on the top of his visor, he claimed them as war booty. These became the Desert Fox's trademark. * * * Rommel was born in 1891, the son of a teacher in southern Germany. Embarking upon a career as a soldier, he distinguished himself in northern Italy during World War I. By taking a circuitous route over the mountains, he took his enemy by surprise, capturing 8,000 Italian soldiers with just 300 German troops. For this brilliant maneuver he won the highest decoration. Yet he was barred from becoming a key commander. The German Army was controlled by members of the Prussian aristocracy and elite officers within the General Staff. Rommel belonged to neither. But Adolf Hitler, who had been scorned by the military elite himself, had his eye on him. He promoted the talented Rommel to high rank. A full colonel at the time of the invasion of Czechoslovakia in March 1939, Rommel rose rapidly through the ranks to become the youngest field marshal in the German Army, in June 1942 at the age of 50. In February 1940, Hitler followed Rommel's request to be appointed commander of a Panzer Division. The military elite were concerned that he did not have enough expertise in the operation of tanks. Rommel's 7th Panzer division, however, was always in the front lines during the blitz invasion of France. Rommel had already perceived that tanks would play a decisive role in modern warfare and he made full use of radio communications. Whereas British headquarters only had wireless connections with some of its tanks, Rommel equipped his tanks with radios so that they could communicate among themselves. This difference gave Rommel the ability to attack unexpectedly and vanish without a trace. Rommel was pleased with Hitler's praise and promotions, but he distanced himself from politics and did not join the Nazi party. His only son, Manfred Rommel, 69, who served as the mayor of Stuttgart until recently, remarks, "My father was a simple man, not an intellectual. But he loved mathematics, and always strove for clarity." Once, when he was 15, Manfred parroted racist Nazi theories to his father and was sharply reprimanded. "Don't speak such nonsense in front of me." Rommel did not present his family to Hitler or key Nazi officers, and he had little interest in socializing. Once, at his wife's insistence, he attended a ball in Vienna. Gorgeously dressed women surrounded him, admiring the great war hero. Although he only needed to exchange a few civilities, instead he bellowed, "Let me pass!", dampening his fans' ardor. Nor did he have patience with formalities. Manfred recalls, "My father enjoyed hunting. Once he wanted to take me with him but it was a school day. Brushing aside my mother's protests, he sent a message to the school that I was ill and took me hunting anyway." Rommel cared a great deal for his family. He sent his wife as many as 1,000 letters from the front lines. David Fraser, an American historian, comments, "His inner absorption was in his soldiering and in his family." * * * After overthrowing the fortress of Tobruk in June 1942, Rommel pushed on as far as El Alamein, about 250 kilometers from Cairo. The British Embassy staff in that city paled at the news and hastily burned the embassy's secret documents. Anwar Sadat, subsequently president of Egypt, was serving as a captain in the Egyptian Army, then under British command. In his autobiography he reveals that with Rommel's army so close, he and many young officers dreamed of using the German Army's strength to expel the British and overthrow the corrupt Egyptian royal government. The citizens of Cairo demonstrated in front of British troops, exhorting Rommel to press onward. Whether he willed it or not, his prowess in battle ignited the fires of Arab pride. Churchill was heard to mutter Rommel's name through gritted teeth. Rommel was always with the soldiers at the front. They trusted him and acted as his hands and feet. During the attack on Tobruk, his troops were brought to a halt by a mine field. Rommel silently climbed down from the command vehicle and began digging out a land mine with his bare hands. The other officers followed his example and the path was soon cleared. Rolf Muninger, 77, who was Private 1st Class with headquarters staff, recalls, "When Rommel was there, we thought that nothing was impossible." Once they captured a troop of Jewish soldiers. Orders from Berlin stated that Jewish soldiers were not to be taken as prisoners but were to be shot on the spot. Rommel burned the orders. Even the British soldiers held Rommel in respect, to the extent that British headquarters had to issue a decree that Rommel was not to be viewed as superhuman. * * * Rommel died on Oct. 14, 1944. The cause of death was announced as "war wounds" and he was given a state funeral. The following year, just before the German surrender, an American military paper revealed that Rommel's death had been suicide by poison, forced by Hitler. On Oct. 23, 1942, the British commenced an overwhelming counter offensive on El Alamein. Judging that they had no hope of victory, Rommel requested permission to retreat. Hitler's telegraphed reply, however, was callous. "Victory or death. There are no other paths." Rommel was astounded. "The Fuhrer is a criminal. Does he intend to fight until our country is annihilated?" He ordered his troops to retreat on his own authority. In the summer of 1944, the war entered its final stage. The Soviet army was relentlessly approaching from the East. The Allied forces had landed at Normandy. Rommel, who had been transferred to the front line in France, felt that there was no justice and no hope of victory in this war. If victory was impossible, then they should stop fighting immediately and make peace with the West in order to prevent the advance of communism into Europe. At a meeting with the Supreme Commander of the Western Front, he tried to appeal to Hitler to surrender, but Hitler flew into a rage and ordered him to leave. This was the last time they ever met. On July 20, an assassination attempt was made on Hitler. Some members of the resistance movement who were exposed as the perpetrators were said to have given Rommel's name as Hitler's successor. On Oct. 14, a messenger from Hitler came to call. Rommel told his family that he was being accused of treason. "I have been given the opportunity to take poison. They have promised not to harm my family or subordinates if I do so." Rommel took the poison handed to him by the messenger in his car, parked in some woods about 300 meters from his house. It is difficult to prove the extent of his involvement in the insurrection. But for the German people who have borne the shame of Nazism in the postwar era, the fact that Rommel resisted Hitler is surely a great comfort. Asahi Shimbun, Dec. 27, 1998 Year 2000 A Race for Security & Against Time The code war In a windowless room two stories below ground level, Lyudmila Zavlyanova sits in what could be a scene from the Cold War. People are hunched in front of computers in cramped cubicles, speaking to one another in hushed tones in Russian. But they are in New Jersey and this is an entirely different kind of global struggle: the code war. Mrs. Zavlyanova and about 40 other immigrants from the former Soviet Union are in the sub-basement of the Newark headquarters of Public Service Electric and Gas Co., New Jersey's largest utility. They are here not because they understand Russian but rather Cobol, a computer language that runs many of the United States' mainframe computers but is so old that relatively few American programmers know it. Mrs. Zavlyanova, a 27-year-old from New York, is one of tens of thousands of programmers throughout the world racing to head off the havoc that could ensue because many of the computers that underpin today's wired society do not understand that a year can begin with a number other than 19. She and her colleagues have spent the better part of this year painstakingly sifting through a program consisting of 7 million lines of code that, to the uninitiated, resembles gibberish. And that is just to fix one program. In all, Public Service has 728 programs with a total of 46 million lines written in 27 programming languages. How well they are fixed or replaced could determine whether the lights and heat stay on in New Jersey come Jan. 1, 2000. That might seem far away. But the Y2K problem, as it is known in computer jargon, is already draining hundreds of billions of dollars from companies and governments struggling to tame what some call the millennium bug. The direst situations that are predicted -- financial chaos, societal strife, food shortages and persistent, widespread blackouts -- are highly improbable. But it is not hard to find reputable alarmists -- computer experts who say they will not fly or schedule surgery at the onset of the year 2000, or even an economist who predicts that the computer bug could set off a recession. The first wave of disruptions has already hit, with 40 percent of the largest U.S. and European companies experiencing at least minor breakdowns because some software has already had to deal with dates in 2000 and beyond. Many retailers have had difficulty processing credit cards that expired in 2000 or later, for example. At BankBoston, some ATM cards were seized because cash machines responded as if the cards had expired in 1900. Another spate of disruptions could begin on the first day of 1999, because a host of other computer programs -- like those used to prepare budgets, schedule appointments and pay unemployment benefits -- deal with dates up to one year in the future. All the threat stems from the fact, by now well known, that computer programs frequently use two digits to represent years, like 98 for 1998. So when 1999 ends, computers might appear baffled about what comes next or might respond as if 00 means 1900 instead of 2000. Afflicted machines could crash or, just as dangerously, spew out erroneous data. With computers running everything from power grids to bank machines to air traffic control, the range of services that could be affected is vast. The problem has proved more intractable and expensive to fix than most experts had expected. The Gartner Group, a consulting firm, estimates that the Y2K problem will cost the world $1 trillion to $2 trillion, as much as $300 for every man, woman and child on the planet. "It's the biggest business problem in human history," said Capers Jones, a software expert and year 2000 alarmist. Year 2000 activity swirls far beyond computer programmers like Mrs. Zavlyanova, sweeping up lawyers, insurance companies, government regulators and even many ordinary citizens. Other electronic equipment besides computers may also be vulnerable. So engineers everywhere are clambering over pipes, behind walls and into closets in a giant scavenger hunt for computer chips that control factories, oil platforms, aircraft, traffic lights and building-security systems. New York Hospital-Cornell Medical Center, for instance, is determining whether 16,000 medical devices -- electrocardiographs, infusion pumps, defibrillators and even beds -- will work correctly in the next century. The Y2K problem is also becoming a cultural phenomenon, appearing in comic strips and Hollywood screenplays. For those prone to believe that the apocalypse is coming with the start of the new millennium, the millennium bug looks like the means to the end, a digital echo of Noah's flood. For many more people the Y2K problem plays on a sense of unease that society is growing dependent on a lattice of technology that is now so far-reaching, interconnected and complex that no one completely understands it, not even the priesthood that writes its digital code. Many moves toward economic efficiency -- automation, just-in-time delivery of parts to factories, globalization -- have been aided by computers. Yet those same practices now make the economy more vulnerable to computer malfunctions. Several potential Y2K problems have been discovered during simulations. When Chrysler Corp. set the clocks on the electronic equipment at one of its factories ahead to 2000, for example, the security system locked all the doors. Such problems can be readily fixed, one at a time. The fear, though, is that the early days of 2000 could bring a huge flood of them. Many experts say there is simply too much software left to fix and too many microchips to check before the immovable deadline. Still, they say, there is time to reduce the impact by fixing what is possible and making contingency plans for failures that cannot be prevented. The school board in Albuquerque, N.M., recently voted to keep the city's public schools closed in the first week of January 2000 to make sure that the district has time to repair unexpected breakdowns. Experts say caution is in order, but not panic. "The level of disaster is still fundamentally our choice," Howard Rubin, an information technology consultant, said. Town Criers: Escapist Movement Expects the Worst The year 2000 problem raises vexing questions for consumers. Most home appliances and cars should work fine, manufacturers say, though many people will have to test and fix personal computers. But a few people have gone even further. Nervous residents in more than 200 U.S. cities have formed community preparedness groups, advising neighbors and urging local officials to make contingency plans, like setting up emergency food banks, shelters and neighborhood-based power generation. Many groups passed out leaflets at shopping centers before Christmas with Y2K-inspired shopping suggestions, like first-aid kits, firewood and batteries. "The best chance I would have would be to be in a community that is well prepared," said Jay Golter, 42, a financial analyst at a federal agency who went to a PTA meeting at his son's school in Springfield, Va., last January and invited the other parents to a strategy session on the Y2K problem. When the day came, no one showed up. But gradually concern took root, and the Northern Virginia Year 2000 Community Action Group now boasts more than 200 members. In Boulder, Colo., where people who are worried about the year 2000 problem are organizing neighborhood by neighborhood, some 70 residents of the 80304 zip code gathered in a school recently to listen to Kathy Garcia, a specialist in group dynamics. "We are asking people to prepare for four months, enough to get you through the winter," Ms. Garcia said, detailing how her family spent $600 setting aside a supply of rice, beans and other staples. The group then discussed plans to ask grocers to stock foods that would be needed in a crisis. They fretted about how to ask neighbors, without seeming intrusive, about special medical needs, so hospitals could be asked to prepare. Then they broke into pairs to practice approaching strangers to discuss the Y2K problem. Efforts are under way to foster more cooperation nationally among the community groups, which are already loosely linked through the Cassandra Project, a group in Louisville, Colo., that operates a widely used Web site dedicated to Y2K concerns. Some alarmists scoff at the notion that such organizing will stave off the societal breakdown they see coming from large-scale computer failures. So in a throwback to the bomb-shelter mania of decades past, they are moving to rural areas, drilling wells, setting up generators and even buying guns to fend off the hordes they fear will come from the broken cities in search of food. Entrepreneurs are catering to the survivalists, selling everything from seeds to wooden "survival domes," or even trying to develop entire communities. God's Wilderness, in Finland, Minn., bills itself as a relocation site for Christians, offering land complete with cabin, well, pump, stove, greenhouse, shed and outhouse. David and Johanna Hecker, who own the site, say on their Web page that they knew nothing about Y2K worries until they tried to sell some land and got inquiries from people looking for a place to escape. But many experts say that preparations like stockpiling food and withdrawing savings are unnecessary and will only invite burglars and rats. In addition, business leaders and public officials have already begun to worry that such hoarding could produce the very chaos that some doomsayers had predicted from computer breakdowns. The American Red Cross, for instance, recently suggested that people fill the gas tanks of their cars just before Jan. 1, 2000. But the gasoline distribution network may not be able to handle such demand, as was proved by the 1979 oil crisis when millions of Americans waited in lines, drove up prices and in some cases got into fights in the mistaken belief that oil imports were drying up. Bankers are especially worried about possible major withdrawals. The Federal Reserve Board has already said it will set aside an extra $50 billion of currency reserves at the end of 1999. "When we get down to 1999, the retail public is going to panic and want cash, and we better have it for them," said David Iacino, head of the year 2000 program at BankBoston. Penny Wise: How a Money-Saver Became So Costly The millennium bug is not really a bug at all, in the sense of a coding error. Using two digits to represent the year was considered a clever way in the 1950s and 1960s to save expensive computer memory. Leon Kappelman, co-chairman of the year 2000 working group for the Society for Information Management, estimates that use of two-digit years in a program written in the 1960s would have saved more than $1 million per billion bytes of data stored over the following 30 years. Those savings would more than offset the cost of fixing the code now to handle the change to 2000. But through force of habit, programmers continued to use two-digit years well into the 1990s, even as data-storage costs dropped to one-ten-thousandth of their 1960s level. Denver's $4.3 billion international airport, styled as the airport of the future when it opened only three years ago, is spending millions to ensure that its safety and flight information systems are free of Y2K bugs. >From the start, some programmers foresaw problems in 2000, but the danger seemed theoretical. Computer technology was changing so rapidly it was assumed that programs with two-digit years would be retired long before 2000. Instead, it was the programmers, not the programs, who retired first. Even when companies realized the problem, they procrastinated about fixing it. Data-processing managers, constantly swamped by demands for new programs, did not dare propose devoting resources to a problem that would not hit for many years. Some assumed that a quick fix would be invented as the deadline neared. The information-processing department at Bank of America awarded a plaque in the late 1980s to the first manager with a program that encountered a year 2000 problem. But the bank did not start fixing its code until 1996. Now, even those who saw the trouble coming are finding how deep-rooted two-digit coding is. Ronald Asala, director of technology services at Zurich American Insurance Group in Schaumburg, Ill., remembers ordering programmers who were writing claims-processing software in 1986 and 1987 to use four-digit years. "I would have sworn on a stack of Bibles that the system was Y2K-compliant," Asala said. But a recent test found 18 two-digit functions, two of which would have stopped the program cold. The Code War: A Battle Fought Line by Line If writing a new program is software's equivalent of carpentry, Y2K work is more like asbestos removal. It is a job as tedious as replacing all the light bulbs in Las Vegas but not as easy, because much of the software was written years ago by programmers who have quit or retired. The repair project undertaken by Public Service Electric and Gas is a case in point. Mrs. Zavlyanova works for Keane Inc., a contractor for the utility. Because programmers are in short supply, Keane offered $1,000 bonuses to employees who recruited their friends, and word quickly spread through the Soviet immigrant community. These programmers are fixing the software that keeps track of bills and other data related to the utility's 2 million electricity customers. An error in any one of the 7 million lines of this program could cause problems in billing and service. Mrs. Zavlyanova and her colleagues are the final backstop in a search through every line of code for places that contain two-digit years. Sometimes such work is straightforward because programmers refer to dates using abbreviations like YR or DT. But in other cases the designations are quirkier and not obvious, like the names of movie characters or the programmer's acquaintances. One day this summer, Mrs. Zavlyanova was inspecting a tiny 523-line segment. A special computer program had already quickly scanned all 523 lines, picking out 18 with numbers that could be dates. One of those lines contained the name of a 25-digit serial number. Suspicious, Mrs. Zavlyanova zeroed in on this segment and there it was: a millennium bug! Six of the digits in the serial number referred to a date: two for the month, two for the day and only two for the year. Now the question was how to repair it. The utility wanted to expand the serial number to 27 digits, adding two digits to represent the year. But such an expansion was not as easy as it sounded, because it would throw off the position of the other numbers. A number that was in position 15, which might have stood for, say, a customer's geographic location, would move to position 17, which the program might react to as if it refers to the meter reader's route number. So expanding the serial number could require changes to many other lines in the program. Before she undertook this task, however, Mrs. Zavlyanova checked and found that another programmer who had encountered the serial number in another part of the program had already expanded it. But that programmer apparently made an error, so more work would be needed. "Y2K work isn't as easy as a lot of people think," said Mrs. Zavlyanova, who has on her desk a certificate praising her as a top performer. "There are all kinds of complications that come up." PSE&G is not fixing all its software. About 125 programs are being replaced by new software that is free of Y2K problems. One program is being scrapped because the company cannot find any programmers who know the language in which it was written. Another 25 percent to 30 percent of the programs are being retired because the company found that no one was using them anymore. "There's stuff that would print out downstairs and it would go to someone and that person would be gone," said Vincent Scatuccio Jr., who is in charge of software repair. One of the few silver linings of the Y2K problem, Scatuccio noted, is the chance to clear the cobwebs from a company's data-processing operations. To save time, PSE&G is not expanding years to four digits in most programs, but is instead using a technique called windowing. Years are left as two digits but the computer is instructed to interpret 00 to 49 as being 2000 to 2049, and 50 to 99 as 1950 to 1999. Of course, if the program is still in use in 2050, it will have to be fixed again. As for crucial software that helps balance electricity supply and demand, the utility is saving millions of dollars by not fixing it at all, because the company plans to buy new software eventually. Until then, it is simply setting the clock back so that the program will function as if it is 1972 instead of 2000; the dates in 1972 fall on the same days of the week as in 2000. The bottom line, however, is this: Despite these shortcuts, despite budgeting $91.6 million for Y2K work and despite starting its cleanup more than two years ago -- earlier than most utilities -- PSE&G will not finish on time. So, like many companies, it is resorting to triage, fixing the most important programs first and worrying about minor ones later. Double Checking: 'Trust Nothing, Test Everything' On a recent Sunday, when most of the executives and tellers of AmSouth Bank in Birmingham, Ala., were relaxing with their families, computer specialists from the bank gathered in a run-down former auditorium they called the "war room" and traveled through time. They set the date on a multistate network of computers ahead to the year 2000 and put the powerful machines through their paces, crunching fake loan applications and money transfers. In another room, bank employees repeatedly inserted and withdrew colorful play money from automated teller machines, watching the balances on their receipts rise and fall. The elaborate process was part of a test to make sure AmSouth bank's computers will work in 2000. Experts say that even after software is fixed, it should be tested, because some dates might have been missed. In addition, the correction of one problem often introduces another. The Internal Revenue Service mistakenly sent default notices to 1,000 taxpayers because of an error made in fixing the millennium bug. Year 2000 consultants say that testing could take up more than half of a Y2K budget. Yet many companies, pressed for time, are skimping on testing. "You've got to take a 'trust nothing, test everything' attitude," said Asala of Zurich American, chastened by his encounter with the faulty Zurich code he had assumed was clean. That warning extends to software from outside vendors, who can never fully test their products for all the ways they are used by customers. "We have found 10 major Y2K problems with applications vendors told us they had tested and found compliant," Asala said, adding that Zurich American's problem programs included software from giants like IBM and Computer Associates, companies that Asala credits with doing a good job on Y2K problems. Smart testing requires cooperation between business partners because computers routinely interact with other machines outside the company, but it is not always possible. Bell Atlantic, whose wires carry billions of dollars in financial transactions, said it had more banks wanting to test with it than it could accommodate. There is a human toll too. Because computers are usually in use during the day, testing often must be done at odd hours, which is why the computer specialists at AmSouth Bank did their work at night and over a weekend for five days in October, with workers subsisting on snacks and pizza. Diane Lambert, a systems manager, said she considered herself lucky if she could say yes when her 14-year-old daughter called asking, "Mama, will you be home before midnight tonight?" Jan. 1, 2000, was not the only date tested. One day the computers were made to believe it was Jan. 3, the first business day of 2000. Another time it was Feb. 29, a leap day. Then it was March 31, 2000, the day the books would close for the first quarter. While programmers worked in the war room, technicians in Chicago were busy executing mock money transfers to AmSouth's big clients. Employees at AmSouth's phone service center in Pensacola, Fla., at a check-processing office in Atlanta and at a branch in a Birmingham suburb were all participating. The far-flung electronic menagerie was also linked to a computer center in North Bergen, N.J., that is usually rented to companies whose own computers are disabled by a natural disaster. Comdisco, the owner of this disaster recovery site, has found a sideline in leasing such sites for Y2K testing. AmSouth's test went well. The only glitch found was one that would have prevented AmSouth from signing up new bank-by-phone customers on Feb. 29, 2000. Sara Simon, the technician who had originally installed the program, identified the error within two hours. It was quickly corrected, setting off a round of cheers. But no testing program can cover all the possibilities. "That's why I call it the year 2000 lottery," said Donald Estes, a testing expert in Lexington, Mass. "Some will do a lot and still get hit. Some won't do enough and luck out." The Hidden Problem: At the Mercy of Microchips If the year 2000 cleanup involved fixing only business software it would be hard enough. But the potential for Y2K problems also lurks in the tiny computers that have permeated all corners of modern life. The flow of chemicals in a refinery, the injection of fuel into automobile engines, even the flushing of some toilets is controlled electronically. Sometimes the controller is a single chip, like one in a factory that merely opens or closes a valve based on readings from a temperature sensor. In other cases, an entire computer with more complex software is used. Experts say that only a small percentage of such systems -- called embedded systems because the computer or chip is embedded in some other piece of equipment -- will have date problems. But with billions of such chips in use, even a small percentage is enough to scare Y2K experts. British Petroleum's giant Grangemouth refinery complex identified 2,132 embedded systems and found that 15 would fail in a way that would shut down operations if they were not fixed, said Ian Jenson, the project manager. The embedded-chip dimension of the Y2K problem surprised many companies. International Paper Co. doubled its estimate of its year 2000 repair costs to $135 million, largely because it belatedly identified vulnerable electronic controls in its mills. The investigations have turned up some good news. Despite popular fears about airplanes falling from the sky, for instance, Boeing Co. has concluded that there are only three embedded Y2K defects in its aircraft, all easily dealt with and related to navigation data. But medical equipment remains a major area of concern. The Veterans Health Administration found a $150,000 machine used in radiation therapy for cancer that could theoretically calculate wrong dosages after 2000. The machine uses the date to calculate the age of the patient and the strength of the radiation, which decays over time. In the 1980s, several patients were killed because of software errors in a different radiation machine. At New York Hospital, Louis Wetstein, a 31-year-old biomedical engineer, is trying to determine the status of the hospital's 16,000 medical devices, about 2,500 of which contain microprocessors. Robots and electronic machines perform tests on vials of patients' blood without human intervention. Infusion pumps deliver medication with a precision beyond human capability. Even the beds contain microprocessors, which adjust the bed's position and weigh the patient. To test an electrocardiograph machine, Wetstein and colleagues first hooked it up to another electronic device that simulates a heartbeat. Then they set the electrocardiograph's internal clock to 23:58 on 31-DEC-99 and waited two minutes. The machine continued into 2000 without missing a beat, printing the squiggly lines of an electrocardiogram on a strip of paper and recording 00 as the year. A four-digit year would be ideal, but this was not bad. Then the clock was set back again to just before midnight for a second test. But this time the machine was shut off. When it was turned back on two minutes later, the printout still read 23:59. The machine was stuck in the last century. The date on the printout made no sense at all -- 03-MAR-A6, with A6 being an error code. Nevertheless, the machine was still able to record heart rhythms, because it did not need to know the date to do that. Wetstein said he had found similar record-keeping problems with some defibrillators and ventilators, but had never found a problem that would cause the equipment to stop functioning. "Medical equipment is not designed to stop working," Wetstein said. "It is designed to keep working. The failure is not to shut down." Still, incorrect date-stamping could pose legal problems or contribute to incorrect diagnoses. At New York Hospital, electrocardiograms are stored in a computer so doctors can log on from their homes or offices. But if the dates were wrong, doctors might conceivably not be able to find the EKG or might look at the wrong one. Moreover, some experts say, even if a machine does not need to have the date to perform its job, it might be built with off-the-shelf components that do keep track of the date and might shut themselves off if they cannot handle the transition to 2000. So to be safe, some companies are checking everything, and there is disagreement on the risks. "I would have surgery at midnight," Wetstein said confidently, referring to the start of 2000. But the head of the hospital's overall Y2K effort, Susan Auman, whose background is in data processing, was more cautious, saying: "I wouldn't schedule surgery. I wouldn't fly." Enter the Lawyers: Efforts Stymied by Fear of Lawsuits One reason to test everything is to avoid being sued. The Y2K problem has attracted armies of lawyers, who have done more than anything else to elevate it from a concern of programmers to one of top management. The lawyers are needed to deal with regulators like the Nuclear Regulatory Commission and the Securities and Exchange Commission, which are requiring companies to prepare Y2K plans and to disclose their progress. In other cases, top management is worried about being sued if computer malfunctions disrupt business enough to make the stock plummet or hurt a customer. The year 2000 problem has led some law firms to set up specialized Y2K practices. "It's the bug that finally gives lawyers the opportunity to rule the world," Evelyn Ashley, an Atlanta lawyer, said at one of the several Y2K panels at this year's American Bar Association meeting in Toronto. Some 30 lawsuits have been filed already, mainly focusing on whether software companies like Intuit and Symantec are obligated to provide free upgrades to programs that cannot handle the date change. Other questions being raised in court include whether insurance policies will cover damage caused by the year 2000 problem. But if legal fears have pushed companies to take the Y2K situation more seriously, they have also made it harder to solve the problem, because companies are afraid to disclose information about problems they have. The lawyers' defensive instincts are generating volleys of letters from companies to their suppliers, asking whether the suppliers will be ready for 2000. Sometimes the letters come with a threat to cut the supplier off if it is not moving fast enough. The initial mailing from a group set up by five big automakers surveyed 39,000 auto-parts manufacturers, because an entire assembly line could be idled if even one crucial part were not delivered. The airline industry has hired a consulting firm to survey the air traffic control, fuel supply, luggage handling and other systems at all 550 airports in the United States. "Everyone is sending letters to everyone," Iacino of BankBoston said. "We're like ants in an anthill. We're all stepping on one another." But the same lawyers who advise customers to query their suppliers are advising the suppliers not to answer the queries, or to answer them only vaguely. That is because statements about a company's readiness can be used against it in court. The legal gridlock has caused alarm. "We've got to get this litigation monkey off our back so we can do our job," said Philip Rock, who is supervising Y2K work at the Bell Atlantic operations center in Framingham, Mass. Several medical groups and members of Congress have publicly rebuked makers of medical devices for not disclosing information about potential problems. Responding to concerns, Congress hastily enacted a law in October to shield companies from lawsuits based on wrong information they provide, as long as the disclosure is neither reckless nor fraudulent. But lawyers are advising that the law's protections are limited, which has discouraged companies from dropping their guard. The Y2K Economy: New Strategies and New Jobs Lawyers are only part of a whole new niche in the economy created by vast spending on the Y2K problem. So many companies offer fix-it services or software that stock indices have been created to track them. Programmer shortages, though not as great as was initially feared, have pushed salaries of Cobol experts to $75 an hour in some cities. To retain its best programmers, Bank of America is offering bonuses of up to $75,000, half not payable until May 2000. Some of the work has been shifted to India and other countries where programmers are cheaper. Retired or laid-off Cobol programmers are getting second chances. Randall Bart, 41, of Torrance, Calif., who specializes in Unisys mainframe software, could not get another programming job after being laid off in 1988. "I had dead-end experience," Bart said. He worked as a poker dealer, among other odd jobs. But this year, he found work as a programmer again, fixing millennium bugs on the Unisys computer of a pen maker. "Come 2001, I'll still have experience that people don't want," he said. "But at least I'll have made some money by then." Investors are already moving away from some companies seen as vulnerable to year 2000 problems. The stock of Executive Risk Insurance of Hartford, Conn., dropped sharply in July after Moody's, the credit-rating agency, said the company could face huge claims from clients that experience business breakdowns in 2000. On a broader scale, Global 2000, an international committee of major banks, is planning to issue a report card on the readiness of different countries in February, a move that politicians fear could cause capital flight from lagging nations. The millennium bug is also helping reshape corporate strategies. Corestates Financial Corp. of Philadelphia said the escalating cost of technology, including year 2000 repair, was one reason it agreed to be acquired this year by First Union Corp. of Charlotte, N.C. Some 18,000 Massachusetts Medicaid patients were recently forced out of the Tufts Health Plan because Tufts decided it could not reprogram its computers to handle changes in Medicaid while also fixing Y2K problems. "It was a very difficult decision for us because serving the Medicaid population is part of our mission," said Richard Shoup, Tufts' chief information officer. "But this is about business survival." Jan. 1, 2000: Ready or Not, Deadline Nears As midnight approaches on Dec. 31, 1999, some people will be happily participating in the greatest New Year's celebration of the last 1,000 years. Others will be bracing for disaster. But the final accounting will not necessarily come quickly. Indeed, Gartner Group projects that less than 10 percent of the disruptions will strike in the first two weeks of 2000. Edward Yardeni, the chief economist for Deutsche Bank Securities in New York who built a strong following on Wall Street by correctly forecasting the stock-market boom of the 1990s, has said that there is a 70 percent probability that the millennium bug will cause a worldwide recession equivalent to the one that followed the 1973 oil shock. Enough computers will fail, Yardeni argues, that economies will not be able to maintain their current level of output. Many other economists, however, think the economic impact will be more transient, like that of a hurricane. The clashing prognosticators agree that, like the weather phenomenon El Nino, Y2K will be blamed for some problems in which it has no role. But also like El Nino, Y2K problems are certain to cause real disruptions. Many companies and government agencies are simply too far behind to finish in time. And some that seem to be on schedule will fall behind, because software projects are notorious for missing deadlines. Some big companies are confident that they will be ready. "I'll probably be here that night because they'll probably want me here, but I'll be here yawning," said Rock of Bell Atlantic. Robert Green, Y2K manager for Public Service Electric and Gas, had a similarly calm forecast. "Hopefully on December 31, 1999," he said, "the only ball dropping will be at Times Square." Cap Gemini, the consulting firm, found in a survey of 1,680 multinational companies that spending on the year 2000 problem had doubled in the six months ending in October, a positive sign. Still, the U.S. companies had spent only 61 percent and Europeans 48 percent of their year 2000 budgets, meaning that a huge chunk of work still lies ahead. As of the end of the third quarter, Chevron Corp. had spent only $40 million of its projected $200 million to $300 million. And companies are finding the problem more costly than they thought. Merrill Lynch & Co. raised its budget in the last six months by $100 million, to $400 million. The estimated cost to fix the federal government systems has almost tripled, to $6.4 billion from $2.3 billion in March 1997, with numerous agencies, including the Defense Department, rated by congressional overseers as hopelessly behind schedule. Even if the big companies are ready in time and the federal government catches up, surveys have shown that many small businesses, as well as federal, state and local government agencies, are way behind. So are many foreign countries. A minister in Jamaica said it would take that Caribbean nation until 2004 to be ready for the year 2000. Economic crises are diverting attention in Russia and Asia, while European companies must grapple not only with Y2K problems but also with the reprogramming needed for the new currency, the euro. Peter de Jager, the Canadian consultant who is perhaps the best-known year 2000 Paul Revere, now predicts that the world will probably muddle through without the catastrophe he once foresaw. It might not be a glorious goal, but many Y2K experts would be delighted if it were attained. After all, the world is now so dependent on computers that there is no going back. "We cannot go back, because the infrastructure that undergirded our entire society 25 years ago has been dismantled," Sen. Robert Bennett, R-Utah, who is chairman of the special committee on the year 2000 problem, said this summer. "The skills are gone, the people are gone, the equipment is gone. Like it or not, we have no choice in this situation but to plow forward and, one way or the other, make it work." The New York Times, Dec. 27, 1998 ----- Aloha, He'Ping, Om, Shalom, Salaam. Em Hotep, Peace Be, Omnia Bona Bonis, All My Relations. Adieu, Adios, Aloha. Amen. Roads End Kris DECLARATION & DISCLAIMER ========== CTRL is a discussion and informational exchange list. Proselyzting propagandic screeds are not allowed. Substancenot soapboxing! These are sordid matters and 'conspiracy theory', with its many half-truths, misdirections and outright frauds is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. That being said, CTRL gives no endorsement to the validity of posts, and always suggests to readers; be wary of what you read. CTRL gives no credeence to Holocaust denial and nazi's need not apply. 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