WASHINGTON, Dec 26: International Monetary Fund Managing Director Horst Koehler on Wednesday welcomed the January 1 introduction of euro notes and coins, but said there are still challenges ahead for European integration.

He said greater political cohesion and progress in economic reforms would pave the way for stronger growth in the region.

“The introduction of notes and coins will give new impetus to common pricing across the euro area and the lowering of transactions costs,” Koehler said in a statement.

“Given the economic importance and potential of Europe, in time the euro’s role as a major reserve currency will increase, adding to Europe’s global economic responsibility.”

On Jan 1, the European Central Bank will start issuing euro banknotes and coins and begin the process of exchanging member countries’ domestic currencies for euros.—Reuters