January 1, 1999
Web posted at: 4:18 p.m. EST (2118 GMT)

BRUSSELS (CNN) -- Even though European consumers in the 11 euro nations will not have new coins and bank notes in their pockets for some time, Friday's formal launch of the single currency as official tender has brought the price differences for everyday items into stark relief.

Observers believe the psychological effect on consumers of seeing prices cheaper across the border for certain products could result in increased competition and reduced prices -- for instance, in the more expensive northern European countries.

Tax variations among the euro countries -- particularly for gasoline, alcohol and cigarettes -- will account for some of the price differences. Proposals to remove tax discrepancies have been unsuccessful.