Europaudvalget 2001-02 (2. samling)
EUU Alm.del Bilag 469
Offentligt
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COUNCIL OF
THE EUROPEAN UNION
Brussels, 8 March 2002 (11.03)
(OR. fr)
7020/02
ECOFIN 108
UEM 28
MI 49
COVER NOTE
from :
date of receipt :
to :
Subject :
Mr Sylvain BISARRE, Director, Secretariat-General of the European
Commission
8 March 2002
Mr Javier SOLANA, Secretary-General/High Representative
Communication from the Commission to the European Council: Review of the
introduction of euro notes and coins
Delegations will find attached Commission document COM(2002) 124 final.
________________________
Encl.: COM(2002) 124 final
7020/02
DG G
mip/AM/kjf
EN
1
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COMMISSION OF THE EUROPEAN COMMUNITIES
Brussels, 6.3.2002
COM(2002) 124 final
COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN COUNCIL
Review of the introduction of euro notes and coins
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COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN COUNCIL
Review of the introduction of euro notes and coins
Contents
1.
2.
2.1.
2.1.1.
2.1.2.
2.1.3.
2.1.4.
2.2.
2.2.1.
2.2.2.
2.2.3.
2.3.
2.4.
3.
3.1.
3.2.
3.3.
3.4.
3.5.
3.6.
4.
4.1.
4.2.
4.3.
5.
5.1.
Introduction: the changeover to the euro: a great success ................................... 4
The operations........................................................................................................ 5
Frontloading and sub-frontloading operations .......................................................... 5
Frontloading of banks .............................................................................................. 5
Sub-frontloading of sales outlets .............................................................................. 7
Frontloading of the public with coins ....................................................................... 8
Overall assessment of frontloading........................................................................... 9
Distribution of notes and coins in January 2002 ....................................................... 9
Supply of notes via ATMs...................................................................................... 10
Cash withdrawals or exchanges at bank and post office counters............................ 10
Giving of change by traders ................................................................................... 11
Use of the euro for cash payments.......................................................................... 11
Recovery of legacy currencies................................................................................ 12
Other matters associated with the introduction of euro notes and coins ........... 14
Price stability on the occasion of the changeover to the euro .................................. 14
Security of operations ............................................................................................ 15
Production quality of notes and coins ..................................................................... 15
Counterfeiting ........................................................................................................ 16
Conversion of vending machines............................................................................ 16
Physical introduction of the euro in third countries................................................. 17
Public reactions to the euro ................................................................................. 18
Assessment of the effectiveness of the preparations for the introduction of the euro 18
Public confidence in handling euros ....................................................................... 18
Overall assessment by the public of the changeover to the euro.............................. 20
Preparation of SMEs for the euro ....................................................................... 21
Degree of preparation of SMEs on 1 January 2002................................................. 22
2
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5.2.
5.3.
6.
Practical difficulties encountered in switching to the euro ...................................... 22
Overall assessment of their changeover to the euro................................................. 23
Annex .................................................................................................................... 23
3
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1.
I
NTRODUCTION
:
THE CHANGEOVER TO THE EURO
:
A GREAT SUCCESS
The introduction of euro notes and coins was the largest-ever currency-changeover operation.
Europe showed that it was up to the task and was able to meet the difficult challenge of
ensuring a smooth transition. The participating countries produced 15 billion notes and
51 billion coins and then distributed in the first few weeks of 2002 some 8 billion notes and
38 billion coins to 218 000 banks and post offices, 2.8 million sales outlets and 302 million
individuals in twelve different countries. They also had to withdraw in a matter of weeks a
large proportion of the 9 billion national notes and 107 billion national coins in circulation.
This major success is due to the quality and extremely thorough nature of the preparations
made by the participating Member States, the European institutions (the European Central
Bank and the European Commission), the national central banks, financial institutions, sales
outlets, the police and cash-transport firms and to the active and enthusiastic participation of
the public, without which this operation and the rapid distribution of euros would not have
been possible. The public in Europe have accepted their new currency rapidly and
enthusiastically, purchasing the mini-kits of coins on a massive scale before 1 January and
flocking early on to cash dispensers and banks to obtain euro notes. From the training of
payout-desk staff to the special programmes for the vulnerable groups in society, preparations
were systematic in all areas. The national finance ministers have played a key role in
supporting and encouraging economic actors. The European Central Bank has effectively
coordinated the measures taken by the national central banks. For its part, the Commission
has been instrumental throughout in fostering and coordinating action taken by the
participating countries by providing guidance on the preparations in the form of
recommendations and proposals (in particular, the recommendation of 11 October 2000 and
the communications of 3 April and 10 October 2001)
1
and by organising the work of the
networks comprising the heads of the national administration task forces and the
communication directors in the finance ministries. For the entire period of the changeover, the
Commission has also acted as a central information point operating via the European Quick
Alert Network it set up.
As preparation and back-up for this operation, communication campaigns of exceptional
duration and scale have been conducted. The aggregate budget over the period 1996-2001 for
the national information campaigns, which the Commission has helped finance, amounted to
€321 million (or €1.05 per inhabitant). The Eurosystem has also undertaken an extensive
campaign costing €80 million. If the preparations made by banks and trade associations are
included, more than half a billion euros have been spent in total on informing individuals and
economic actors.
These huge efforts on the part of all the economic and institutional actors involved have paid
off: the transition to the euro has gone smoothly. The change in currency has taken place
more rapidly than initially expected (in 1999 the Council had set itself the objective of
completing the bulk of the exercise within fifteen days) but in line with the forecasts made by
the Commission in its communication of October 2001: euro payments accounted for most of
the cash payments that had been made by the end of the first week in January; by the end of
the second week, very little national currency remained in circulation.
1
C(2000) 2985, COM(2001) 190 and COM (2001) 561 respectively.
4
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Ten years after the signing of the Maastricht Treaty, the euro has firmly taken its place in the
daily lives of the public. The success of the changeover to the euro illustrates the ability of the
institutions to bring to fruition a complex project and sends out an optimistic message for the
continuation of the construction of Europe. It is also a valuable source of experience for
would-be participating countries, where fresh impetus has been imparted to the debate on
membership of the euro area. The purpose of this communication is to review in detail the
physical introduction of the euro and to summarise the findings of the Eurobarometer surveys
into how the change of currency has been perceived by individuals and firms. The following
points will be examined in turn:
- the actual introduction of notes and coins;
- related matters (price stability, counterfeiting, production quality, security measures and
conversion of coin-operated machines);
- the reactions of individuals to euro notes and coins;
- the changeover preparations made by SMEs.
2.
T
HE OPERATIONS
Four aspects of the changeover merit special attention:
- frontloading and sub-frontloading operations;
- the speed and channels of distribution of the new currency in the first few days of 2002;
- the growing use of the euro for cash payments;
- the withdrawal of the old national currencies ("legacy" currencies).
2.1.
Frontloading and sub-frontloading operations
The rules laid down at European level authorised the frontloading of banks and the
sub-frontloading of sales outlets as of September 2001 and the frontloading of individuals
with euro coins as from the middle of December. Each participating country was, however,
free to decide within this time frame the actual date on which the operations would begin.
2.1.1.
Frontloading of banks
The frontloading of banks went smoothly. Overall, the volume of notes and coins frontloaded
was in line with forecasts. Starting in September, commercial banks (and, in some cases, post
offices) in Belgium, Ireland, France, Italy and Portugal received euro coins, while their
counterparts in Germany, Spain, Luxembourg, Austria and Finland received both notes and
coins. Portuguese banks received notes as of October, the starting date also for the distribution
of notes and coins in Greece. Belgian, Spanish, Irish and Italian banks received notes as of
November, while French and Dutch banks
2
received them in December.
2
Dutch banks could though receive notes earlier if they so requested, as could banks and large sales outlets in
France.
5
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According to the European Central Bank, banks had received a total of 132.1 billion euro
notes by 31 December, equivalent to 21% of total production and to 67% of the value of notes
in circulation.
3
These averages do though conceal very wide variations: orders placed by
banks were quite substantial in some countries (e.g. Greece, Ireland and Austria) and
relatively modest in other countries (e.g. France, Spain and the Netherlands), as the two tables
below show. Supplies of notes were sufficient to meet virtually all the orders placed.
100
80
60
40
20
0
B
D
EL
E
F
IRL
I
L
NL
A
P
FIN
Frontloading of banks as %
of notes in circulation
45
40
35
30
25
20
15
10
5
0
B
D
EL
E
F
IRL
IT
L
NL
A
P
FIN
Frontloading of banks with
notes as % of production
Proportionally, the frontloading of banks with coins was on a much larger scale than in the
case of notes: between September and December financial institutions received the equivalent
of 73% of total production (in volume terms) and 96.3% of the coins in circulation in
mid-January.
4
The differences between participating countries were less marked. Generally
speaking, the orders placed by banks were met without any difficulty.
3
4
As a percentage of the value of notes in circulation on 15 January 2002.
Source: ECB.
6
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120
100
80
60
40
20
0
B
D
EL
E
F
IRL
I
L
NL
A
P
FIN
Frontloading of banks with coins
as % of circulation
90
80
70
60
50
40
30
20
10
0
B
D
EL
E
F
IRL
I
L
NL
A
P
FIN
Frontloading of banks with
coins as % of production
2.1.2.
Sub-frontloading of sales outlets
The sub-frontloading of sales outlets with notes began in September in Germany,
Luxembourg and Austria, in November in Ireland and in December in the other participating
countries (although coins were available in September in Ireland, in October in Italy and in
November in Greece). The opportunity given by the European Central Bank to sales outlets to
be sub-frontloaded with small quantities as of September so that their payout-desk staff could
receive training was not widely taken up, perhaps because of a lack of publicity.
As previously indicated by the Commission in its communication of 10 October 2001,
5
participation by the 2.8 million sales outlets in the euro area in sub-frontloading operations
was generally very uneven. The main reasons for this were the lack in many cases of any
incentives to take part and the imposition in some countries of disproportionately heavy
penalties for the loss or early circulation of notes. On average, the banks sub-frontloaded only
9% (in value terms) of the notes they received.
6
It is interesting to note that, Luxembourg
apart, the participating countries with the best results were those that offered incentives and/or
took steps to alleviate logistical constraints (e.g. Germany, Ireland, the Netherlands and
Austria).
7
The total number of sub-frontloaded sales outlets varied enormously between
5
6
7
COM (2001) 561 final: Second report on the preparations for the introduction of euro notes and coins.
Source: ECB. It should be noted that in some countries a number of large distributors received their euros
from the national central bank direct.
The Eurosystem does not possess data on sub-frontloading with notes in France or on sub-frontloading with
coins in France, Spain, Ireland and Portugal.
7
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participating countries: while virtually all traders were sub-frontloaded in Ireland, the figure
for Dutch traders was just under 90% and that for Italian traders below 10%.
30
25
20
15
10
5
0
B
D
GR SP IRL IT
L
NL
A
PT FIN
Sub-frontloading as % of
notes received by banks
60
50
40
30
20
10
0
B
D
EL
I
L
NL
A
FIN
Sub-frontloading as % of coins
received by banks
Overall, the results are slightly better for coins, with banks sub-frontloading on average a
significant proportion of the coins held, although the situation differed markedly between
countries.
2.1.3.
Frontloading of the public with coins
Small kits containing coins worth on average €10.71 (ranging from €3.88 in Finland to €15.25
in France) were put on sale in mid-December in all participating countries. This was the first
time the general public had been able to get their hands on the euro and they did so with great
enthusiasm in all the participating countries. The rush when banks, post offices and other
points of sale opened was such that two thirds of the kits had been sold in under a week and in
some countries the kits were sold out within 48 hours.
8
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60
50
40
30
20
10
0
B
D
EL
E
F IRL
I
L
NL
A
P FIN
kits produced (millions)
kits sold (millions)
Individuals in Europe bought in all 150 329 000 kits totalling 4 280 585 000 coins (an average
of 14 coins per person) worth €1.65 billion. The total number of kits sold accounted for 11%
of the euro coins in circulation at the end of January. In a number of countries (including
Germany, Portugal, Finland and Luxembourg) demand was such that banks were authorised
to make up their own kits and even to sell some of their stock in bulk. Overall, therefore, the
results as regards the sale of kits were very satisfactory. In aggregate, 150 million out of the
192 million kits available were sold, giving an average figure of 78%.
Contrary to the fears expressed in certain quarters, it is interesting to note that, apart from
isolated cases involving vending machines, individuals fully complied with the ban on using
coins before 1 January 2002. Only 77 attempts to use euro notes and coins were recorded
before 1 January 2002, an infinitesimal number compared with the billions of notes and coins
distributed.
2.1.4.
Overall assessment of frontloading
According to the ECB, frontloading operations distributed in advance 6 billion notes (40% of
production) worth more than €132 billion and 37.5 billion coins (73.5% of production) worth
€12.4 billion.
These figures are even more striking when expressed as a percentage of the quantity of euros
in circulation at the beginning of February 2002: in volume terms, 80% of the notes and 97%
of the coins used by that date had, on average, been frontloaded by January.
The success of frontloading made a decisive contribution to the rapid take-up of the euro at
the beginning of 2002.
2.2.
Distribution of notes and coins in January 2002
The new currency was distributed in three main ways:
8
- via withdrawals from automated teller machines (ATMs);
- via withdrawals at financial institutions (bank and post office counters);
8
Other possibilities included the weekly payment in cash of social security benefits in Ireland and the payment
in cash of retirement pensions in Italy.
9
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- via change given in sales outlets.
2.2.1.
Supply of notes via ATMs
On average, 80% of ATMs had been converted to the euro by 1 January. The technical side of
the operation went very smoothly.
9
The rate of conversion was rapid throughout the euro area,
climbing on average from 90% on 2 January to 97% on 3 January. By 4 January virtually all
ATMs were dispensing only euros. In many cases, machines that had not been converted
continued to dispense the legacy currencies during the first few days, making it briefly more
difficult for sales outlets to give change in euros. This was particularly so in Italy and Finland.
100
90
80
70
60
50
40
30
20
10
0
Conversion rate of ATMs on
1 January
Conversion rate of ATMs on
2 January
Conversion rate of ATMs on
3 January
B
D EL E
F IRL I
L NL A
P FIN
Source: Finance Ministries.
The number of withdrawals from ATMs was very high during the first week of January,
reflecting the enthusiasm and curiosity of individuals for their new currency. Adding together
the results available for seven countries (Netherlands, Italy, France, Germany, Austria,
Portugal and Belgium), more than 25 million withdrawals were made in the space of
48 hours. The results were particularly impressive in the Netherlands, where more than
5 million withdrawals in total were made on 1 and 2 January (i.e. one withdrawal for roughly
every second person over the age of 15). The volume of withdrawals remained high
throughout the euro area until the middle of the second week of January, when it started to fall
back to its normal level. Thanks to the quality of the logistics set in place by banks, no serious
supply problems were encountered at ATMs.
2.2.2.
Cash withdrawals or exchanges at bank and post office counters
Normally, ATMs account for some 70% (in volume terms) of notes distributed to consumers,
with only a modest level of withdrawals being made at bank and post office counters. This
was not the case during the first ten days of January: consumers flocked to the 218 000 banks
and post offices to withdraw euros or to exchange their legacy currency, causing queues to
form. In some countries (e.g. Germany and Spain) the volume of euros supplied to individuals
at counters was even higher than that supplied via ATMs. The rush began on 1 January in the
countries where banks were open to the public that day (Germany, Spain and Luxembourg)
and the queues began to shorten and return to normal only towards the end of the second
week. Many consumers turned up to exchange only small amounts and, in some cases, the
9
The only incidents recorded were a 90-minute breakdown of ATMs in Austria on 2 January and some
difficulties in the first few days with the dispensing of 5-euro notes in 10% of ATMs in Germany.
10
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long queues that had formed forced a number of banks to provide this service only for their
customers.
2.2.3.
Giving of change by traders
In order to give change exclusively in euros in the first few days of 2002, traders required a
much larger cash float since they were unable to recycle as change the national notes and
coins spent by consumers. Generally speaking, sales outlets, and in particular large stores and
supermarkets, followed very closely the recommendations made at European and national
level that they should give change exclusively in euros, even though in some cases small
shops tended in the first few days to give change in the same currency as that used by the
consumer for payment.
The situation regarding the distribution of notes and coins to sales outlets was strained during
the first week on account of the large number of consumers paying for low-value purchases
with large-denomination notes, the limited capacity available for cash-transport operations
(for large stores and supermarkets) and the long queues in banks (for small shops). The 7 585
cash-transport vehicles in service in the euro area thus operated at full stretch in order to avoid
any interruption in supplies of euro notes and coins. Thanks to the efforts of the institutions
and all the economic actors involved, there were only isolated shortages of certain
denominations of notes and coins. These did not interfere with normal trading, affecting only
briefly the composition of change given. A number of participating countries entered into
arrangements for remedying such shortages. For instance, the Bank of Portugal received
30 million 10-euro notes and 30 million 5-euro notes from the central reserve of the
Eurosystem, while the Bank of Spain received 37 million 10-euro notes. In mid-December
France acquired 100 million 50-cent coins from Spain.
Via these three channels (ATMs, bank and post office counters and the giving of change),
euros were distributed very rapidly to the entire population: by the end of the first week of
January a large majority of the population had euro notes and coins in their pockets.
2.3.
Use of the euro for cash payments
In the first few days of January there was a glitch in the supply of euros to consumers and
their use for current transactions. Most people attempted first and foremost to spend their
legacy currencies before using the euro. It was very fortunate that this phenomenon was only
temporary as consumers were supplied with euros via ATMs and at bank and post office
counters while traders gave change in euros. As a result, the legacy currencies swiftly
disappeared from circulation as traders and banks had a "mopping-up" effect.
The share of the euro in cash payments averaged some 20% by the end of 2 January, 40% by
the end of 3 January, 55% by the end of 4 January, 66% by the end of 5 January, 75% by the
end of 7 January, 85% by the end of 10 January, 92% by the end of 12 January and 95% by
the end of 16 January. This very rapid expansion in euro payments, coupled with the
exceptional measures taken by most large stores (increase in the number of cash desks open,
extra support staff at cash desks, etc.), prevented a build-up of queues in sales outlets.
Saturday 5 January was in this respect a key day: the test was passed in all participating
countries, where queues were no longer than usual. The start of the sales did not alter this
situation.
11
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Share of euro payments in total cash payments
100
90
80
70
60
50
40
30
20
10
0
B
D
EL
E
F
IRL
I
L
NL
A
P
FIN
2 Jan
3 Jan
4 Jan
5 Jan
7 Jan
8 Jan
10 Jan
Sources: Finance Ministries; large stores and supermarkets. These figures are only indicative.
The share of cash payments in the total volume of payments increased in most participating
countries in the first two weeks of January as consumers attempted both to spend their legacy
currencies and to gain practical experience in using the euro. The situation began to return to
normal during the second half of January. Lastly, the changeover to euro notes and coins has
not given rise to any particular problems: the conversion of accounts, cards and electronic
payment terminals has been satisfactory overall.
2.4.
Recovery of legacy currencies
Whereas the distribution of euro notes and coins was spread over three months, legacy
currencies were returned for the most part in a matter of weeks, causing serious bottlenecks at
bank and cash-transport company warehouses and giving rise to very long delays in sorting
and counting coins in particular and thus in crediting traders' accounts at commercial banks
and the latter's accounts at central banks.
More than one third of the notes in circulation (in value terms) on 31 December 2001 had
been recovered by central banks by 11 January. The 50% mark was exceeded ten days later on
21 January. By 8 February almost three quarters of notes had been recovered. The actual
circulation of legacy currencies was much lower than these figures indicate since the
bottlenecks at temporary storage depots led to long delays in counting notes at central banks.
Since legacy currency notes and coins will be kept for "sentimental" reasons, since some will
be lost and since tourists returning from abroad will hold on to them, some of the notes and, in
particular, coins will probably never be recovered. It should also be borne in mind that the
period for recovering the legacy currencies is very long and indeed is open-ended in most
participating countries for notes returned to central banks (see annexed table).
12
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Return of national notes as % (in value terms) of notes in circulation on 31 December
10
90
80
70
60
50
40
30
20
10
0
15-Feb
02-Jan
04-Jan
08-Jan
10-Jan
14-Jan
16-Jan
18-Jan
22-Jan
25-Jan
31-Jan
Withdrawals of national
notes as % of notes in
circulation as at 31
December 2001
100
90
80
70
60
50
40
30
20
10
0
B
D
EL
E
F
IRL
I
L
NL
A
P
FIN
2 Jan
3 Jan
7 Jan
10 Jan
14 Jan
18 Jan
22 Jan
29 Jan
8 Feb
20 Feb
The withdrawal of coins has been generally slower: by 22 February 2002 only 27.9% of
national coins in value terms (13.5% in volume terms) had been recovered by central banks.
11
A significant number of coins had been withdrawn from circulation by that date but remained
in storage pending sorting and counting. Coin collections by charitable organisations are still
taking place. The coin-recovery operations carried out by many of the participating countries
in 2001 resulted in the equivalent of 9% (in value terms) of coins in circulation being
recovered.
10
11
Source: ECB.
A significant proportion of coins will never be recovered.
13
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National coins in circulation, in value terms (€m)
12
7000
6000
5000
4000
3000
2000
1000
0
B
D
EL
E
IRL
I
L
NL
A
P
FIN
F
31 Dec
31 Jan
22 Feb
Rate of recovery of national coins, in value terms (%)
60
50
40
30
20
10
0
B
D
EL
E
F
IRL
I
L
NL
A
P
FIN
8 Feb
22 Feb
To facilitate the recovery of legacy currencies, a number of central banks extended their
opening hours in order to allow cash-transport firms to step up their deliveries.
3.
O
THER
COINS
MATTERS ASSOCIATED WITH THE INTRODUCTION OF EURO NOTES AND
These include price stability, the security of operations, the production quality of notes and
coins, counterfeiting and the conversion of vending machines.
3.1.
Price stability on the occasion of the changeover to the euro
The Commission had voiced its concern that the lack of any rapid statistical monitoring of
price movements might give individuals the false impression of a generalised increase in
prices associated with the introduction of the euro. Its concern was largely borne out by the
12
Source : BCE
14
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surveys among consumer associations and NGOs belonging to the "euro made easy" network
and by the Eurobarometer survey conducted at the end of January
13
: 67% of the public felt
that more often than not prices had been rounded upwards, 28% that price increases and
decreases balanced one another out and 1.9% that more often than not prices had been
rounded downwards. The countries where people were most pessimistic about price increases
were Germany and France (76%), followed by the Netherlands (72%) and Ireland (71%).
Portugal was the only country where most people were not convinced that prices had risen in
response to the introduction of the euro (49%).
The figures published by Eurostat on 28 February confirm that there was no general increase
in prices as a result of the currency changeover, its impact on the monthly price trend is put at
between 0% and 0.16%. The few increases linked to the changeover to the euro were due in
general to the service sector. Annual inflation rose from 2.0% to 2.7%between December and
January but virtually all of this increase was attributable to a combination of higher oil prices,
higher prices for fruit and vegetables (because of poor weather) and increases in certain taxes.
In the Eurobarometer survey conducted in mid-February, 61% of SMEs stated that they had
converted their prices into euros in a neutral manner, while 24% had raised some prices and
reduced others. The number of firms claiming to have reduced prices (6%) was roughly the
same as the number claiming to have raised prices (8%).
Overall, the voluntary price stability agreements, notably the European agreement concluded
under the auspices of the Commission in April 2001, have been complied with.
3.2.
Security of operations
The security of operations was very satisfactory throughout. Despite an unprecedented
number of cash-transport operations and a virtual doubling in the number of notes and coins
distributed to economic agents, the number of incidents was well below normal,
demonstrating the effectiveness of the security measures taken (escorts, etc.).
There were only 27 robberies of euro notes and 17 robberies of euro coins between September
and December 2001 (of which over a third took place in Germany, where frontloading began
at the beginning of September). By way of comparison, there was a total of 5 184 successful
bank robberies in the euro area in 2000.
14
The results in terms of protection of the euro can,
therefore, be regarded as exceptionally good.
3.3.
Production quality of notes and coins
The rules in force for ensuring the quality control of the production of euro notes and coins
have proved very effective. Only a few cases of defect have been detected involving a number
of 5-euro notes in France, 10-euro, 20-euro and 500-euro notes in Finland and 100-euro notes
in Greece and Bulgaria (produced in the Netherlands) as well as some 1-cent coins in Italy,
20-cent coins in France and 2-euro coins in Austria. The probability of receiving defective
euros is less than 1 in 500 million for coins and 1 in 200 million for notes.
A German study has raised the question of potentially harmful pigments having been used in
the production of the 10-euro note. Tests carried out at the request of the European Central
13
14
Flash 121,"Euro attitudes" in the euro zone, January 2002.
Source: European Banking Federation.
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Bank have come to the conclusion that there is a risk to health only if more than 400 such
notes are swallowed.
Various studies have been critical of the presence of nickel in 1-euro and 2-euro coins,
pointing to the possible risk of an allergic reaction. The scientific studies conducted a few
years ago at the Commission's request showed clearly that there was no allergic reaction to
the use of nickel in coins.
15
3.4.
Counterfeiting
Euro notes and coins are better protected against counterfeiting than any of the old national
currencies. Although many specialists predicted the appearance of euro forgeries as of
1 January, it is a fact that no cases were detected for the entire month of January. Only some
50 or so crude forgeries (photocopies, prints of scanned notes, cut-out notes, etc.) were
detected in January, an exceptionally low figure (on average, 2 000 copies of national notes
were detected each day in 2001). The situation regarding coins is also very satisfactory, with
only two poor-quality forgeries being identified in January.
In most cases, these crude forgeries were detected before the notes or coins entered
circulation.
3.5.
Conversion of vending machines
In spite of repeated warnings by the European Commission, many vending-machine operators
underestimated in their plans the speed at which the new currency would be distributed,
expecting cash payments in euros to exceed the 50% mark only during the third week of
January (whereas this figure was reached by the end of the first week). In many cases, this
adversely affected turnover and led to some delays in converting equipment; the time lost in
this way could not be made up rapidly because of shortages of trained staff.
15
It is worth recalling that the composition of euro coins was laid down in a 1998 regulation of the European
Council following extensive discussions. Nickel had been widely used in producing national coins in Europe.
It had to be used for technical reasons since other metals do not guarantee an equivalent level of quality; 92%
of euro coins in circulation are nickel-free, compared with 75% of the national coins in circulation.
16
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100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2/
0
4/ 1/ 2
0 0
6 / 1/ 2 02
0 0
8/ 1/ 2 02
10 01 00
/2 2
12/01 00
/2 2
14/ 01 00
/2 2
16/ 01 00
/2 2
18 / 01 00
/2 2
2 0/ 0 1 0 0
/2 2
22/ 01 00
/2 2
24/ 01 00
/2 2
26/ 01 00
/2 2
28/ 01 00
/2 2
3 0/ 01 00
/ 0 / 20 2
1/ 0
20 2
02
Rate of conversion
of vending machines
to the euro
Source: Finance Ministries. These figures are only indicative.
There have been a number of cases where euro coins produced in other participating countries
have been rejected by vending machines because equipment had not been properly adjusted,
having been tested using only the national series of coins and not on the basis of the tolerance
required for all the series of coins in the euro area.
3.6.
Physical introduction of the euro in third countries
According to the European Central Bank, the central banks belonging to the Eurosystem
frontloaded in December 2001 26 central banks or specialised institutions
16
outside the euro
area with some €4 billion. Unfortunately, no figures are available for sub-frontloading by
commercial banks, which has probably been the main channel for supplying financial
institutions in third countries. According to the information received from the Commission's
delegations in forty or so countries, euro notes were available there as of the first days of
January. Many people, particularly in the applicant countries, were curious and attempted to
get their hands on euro notes.
A large number of national notes from the euro area, in particular German notes, were
hoarded or used in the central and eastern European countries. They began to be returned on a
massive scale in 2001, notably by way of deposits on foreign-currency accounts.
17
The
exchange of currency or its deposit in accounts also took place on a very large scale in the
first few weeks of 2002. According to data collected by the European Savings Banks Group,
national notes from the euro area equivalent to €333 million have been returned to its member
financial institutions in central and eastern Europe. It should be noted that, in value terms,
individuals received more euros than they returned national currency in the Czech Republic,
Hungary, Latvia and Lithuania. By contrast, they received fewer euros than they returned
legacy currency in Poland, Albania, Bulgaria and Slovakia, although it is impossible to
determine whether the exchange benefited the local currency or the dollar.
16
17
The banks active on the wholesale note market were frontloaded directly.
For example, according to the central banks in the countries concerned, deposits on foreign-currency
accounts in the second half of 2001 were equivalent to €400 million in Kosovo (or 25% of the country's
nominal GNP) and €3 billion in Croatia (or some 15% of the country's nominal GNP).
17
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4.
P
UBLIC REACTIONS TO THE EURO
The Commission's Eurobarometer Flash survey (conducted between 21 and 31 January 2002)
sheds light on the public's reactions to the euro and on how these differed between
participating countries. The survey results fall into four categories:
4.1.
Assessment of the effectiveness of the preparations for the introduction of the
euro
90
80
70
60
50
40
30
20
10
0
B
D
EL
E
F
IRL
I
L
NL
A
P
FIN
very well prepared
well prepared
On average, three quarters of the public consider themselves to have been well or very well
prepared on 1 January 2002 (26% very well prepared, 48% well prepared). The most
confident assessments were made in the Netherlands (90%), Belgium (85%) and France
(80%), and the least confident in Portugal (62%), Spain (67%), Italy (67%) and Greece
(67%). The self-employed and employees (81%) consider themselves to have been better
prepared than manual workers (76%) and the non-active members of the population (66%).
A very positive assessment was given of the euro awareness campaigns. Some 58% of the
public consider that the early changeover of bank accounts to the euro helped them to become
acquainted with the new currency, while 59% felt the same as regards the early switchover of
utility bills and 77% as regards dual pricing.
4.2.
Public confidence in handling euros
At the end of January the changeover to the euro was still posing some difficulties for one out
of every five people and many difficulties for one out of every thirty-five people (2.8%). In
eight countries (Germany, Spain, Italy, Luxembourg, the Netherlands, Austria, Portugal and
Finland) most of those questioned claimed to be experiencing no difficulties. The two
countries where the public generally said that it was encountering most difficulties were
France (38%) and Spain (25%). The Netherlands stands out as the country in which the
general public is experiencing virtually no difficulties (3.2%), this being due in all probability
to the extensive communication campaigns undertaken.
18
On average, women have
18
The Dutch Government's communication budget for the period 1996-2001 was €67.7 million (or €4.40 per
inhabitant). By comparison, the average budget for campaigns in the euro area was €1.05 per inhabitant.
18
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experienced more difficulties than men (25% as against 18%). All in all, these results can be
regarded as excellent in all participating countries.
Question: Is the introduction of the euro still proving very problematic, a bit problematic, not very problematic or not
problematic at all?
40
35
30
25
20
15
10
5
0
B
D
E L
E
F
IR L
I
L
N L
A
P
F IN
a b it p r o b le m a tic
v e r y p r o b le m a tic
Most people have no problem recognising (57%) or handling (66%) the different euro coins.
It is only in Ireland that a majority of the population (55%) claims to be having difficulties in
using them. On average, the over-55s (44%) have more difficulty in identifying them than the
under-24s (30%).
Overall, the notes pose far fewer difficulties than the coins: 93% of people have no problem
in identifying them while 91% have no difficulty in handling them.
Over three quarters of the public (77%) do not have the impression that the transition to the
euro has altered their purchasing behaviour, while one in every seven (15%) thinks that he or
she has purchased less and one in every fourteen thinks that he or she has purchased more.
Ireland stands out in terms of the high proportion of consumers (37%) who say that their
volume of purchases has been affected. On average, more women than men consider that
there has been a change in their purchasing behaviour (24% as against 19%), and this for
reasons of prudence (17.5% claim to have bought less). There is no major difference on the
basis of age or educational attainment.
Many consumers are still experiencing some difficulty in memorising euro prices and judging
the new scales of value. When making purchases, most of them (45%) continue to think in
terms of the national currency, while 35% continue to think sometimes in terms of the
national currency and sometimes in terms of the euro and 18% in terms of the euro. Ireland
and Portugal are the only countries where more people claim to think in euros than in the
national currency. Men tend to think in terms of the euro more often than women (21% as
against 15%) and the over-55s (23%) more often than the under-24s (16%).
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60
50
40
30
20
10
IRL
NL
B
D
A
F
L
FIN
E
EL
P
I
0
think generally in terms of
the euro
think generally in terms of
the national currency
People rely only to a modest degree on calculators and converters: 41% never use them, 34%
use them sometimes, 15% use them often and 10% use them always. The countries in which
the highest number of people often or always use calculators and converters are France (41%),
Greece (35%) and Ireland (34%), probably because of their complicated conversion rates.
When asked about their wishes regarding the continuation of dual pricing, most people (54%)
felt that shopkeepers should no longer practise dual pricing after the end of the period of dual
circulation, that banks should no longer give the value in national currency (59%) and that the
latter should no longer be printed on invoices (58%). The figures do though differ
significantly between countries. In France (64%), Ireland (56%), Finland (56%) and Spain
(50%), for example, a majority of people would like to see dual pricing continued in shops,
whereas a majority of the population in Germany (65%), the Netherlands (64%), Luxembourg
(64%) and Italy (60%) are opposed to this. There is no significant difference in the replies as a
function of age or educational attainment.
4.3.
Overall assessment by the public of the changeover to the euro
Some 60% of people consider that the changeover to the euro will have more advantages than
disadvantages for them personally. The figure is particularly high in Luxembourg (79%),
Ireland (75.8%) and Portugal (71.1%). It is well below the average in two countries: Germany
(49%) and Austria (45%). The over-55s (52%) are distinctly less optimistic than the
under-24s (71%). Just under two thirds of the public (64%) say they feel more European
thanks to the euro.
The assessment made of the introduction of euro notes and coins is extremely positive, with
over 80% of the public taking the view that it went well or very well.
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Question : do you feel that, in your country, the changeover to the euro went very well, rather well, rather
badly or very badly?
100
90
80
70
60
50
40
30
20
10
0
B
D
EL
E
F
IR L
I
L
NL
A
P
F IN
w e n t v e r y w e ll
w e n t w e ll
Lastly, more than two thirds of the public in the euro area are personally happy or very happy
that the euro is now their currency, an exceptionally high figure which confirms the
enthusiasm of Europeans for their currency. Germany, Greece and Austria stand out with an
above-average proportion of dissatisfied individuals, while the level of satisfaction is
particularly high in Ireland (85%), Belgium (83%), Italy (82%) and Luxembourg (81%). On
average, men (73%) are more satisfied with the change of currency than women (61%), while
the under-24s (78%) are more satisfied than the over-55s (61%).
Question: All in all, are you very happy, quite happy, quite unhappy or very unhappy that the euro is now
your currency?
90
80
70
60
50
40
30
20
10
0
B
D
EL
E
F
IR L
I
L
NL
A
P
FIN
very happy
quite happy
The information campaigns in the participating countries, which the Commission has helped
to finance, will continue for a few months yet, as back-up for the measures aimed at
familiarising the public with their new currency.
5.
P
REPARATION OF
SME
S FOR THE EURO
There were concerns that SMEs may have been poorly prepared for the changeover but, all in
all, this proved not to be the case. The considerable efforts made by the national
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administrations, banks and trade associations to increase the awareness of firms paid off in the
end. The Eurobarometer survey conducted in mid-February 2002 provides a very satisfactory
picture that contrasts with earlier surveys: many SMEs seem to have changed over to the euro
at the last minute.
The replies received fall into three categories:
- degree of preparation of SMEs on 1 January;
- the difficulties encountered;
- their overall assessment of their changeover to the euro.
5.1.
Degree of preparation of SMEs on 1 January 2002
All in all, the results are very satisfactory: 95% of SMEs keep accounts in euros, 96% set
prices in euros and 97% issue invoices in euros. There are few differences between
participating countries. The results tend to be slightly better for larger enterprises.
Just under 84% of the few firms that have not converted their accounts into euros intend to do
so before the end of February. The corresponding figures for euro prices and euro invoices are
81% and 87% respectively.
100
98
96
94
92
90
88
86
84
82
accounts in euros
prices in euros
invoices in euros
B
D
EL
E
F IRL
I
L
NL
A
P
FI
In 2002 fewer than 9% of enterprises have received documents (price lists, invoices, etc.) that
do not give values in euros. This figure was particularly low in Portugal (4.2%) and Belgium
(5.3%) but much higher in Ireland (12.7%) and particularly in the Netherlands (20.8%).
Generally speaking, the documents in question were invoices (68% of cases), commercial
offers (35%), payments (18%) and, to a much lesser degree, tax documents (6%) and social
security documents (6%). In the vast majority of cases, these non-euro-compatible documents
were sent by suppliers.
5.2.
Practical difficulties encountered in switching to the euro
Over 85% of SMEs say that they did not encounter any practical difficulties in switching to
the euro. The result is more or less satisfactory for all the participating countries. In general,
enterprises with fewer than ten employees experienced fewer difficulties (14%) than those
with more than fifty employees (21%).
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25
20
15
10
5
0
B
D
EL
E
F
IRL
I
L
NL
A
P
FI
Encountered practical
difficulties
The few problems encountered generally involved IT systems (36%), the setting or display of
prices (25%) or invoicing (19%). Asked who had been of most assistance to them, SMEs
listed in descending order banks (31%), accountants and business support centres (29%) and
chambers of commerce (9%). The State was mentioned by only 4% of enterprises, with the
notable exception of Ireland (26%).
Question: Who assisted you most in preparing for the changeover to the euro?
80
70
60
50
40
30
20
10
0
B
D
EL
E
F IRL
I
L
NL
A
P
FI
Banks
Accountants/business
support centres
Chambers of commerce
State
5.3.
Overall assessment of their changeover to the euro
SMEs did not have any unpleasant surprises on switching to the euro: some 60% of them feel
that the changeover went as planned, while 35% of them feel that it went even better than
planned.
Almost two thirds of them take the view that the switch to the euro will not have any impact
on their business while just over one enterprise in five is expecting it to have a positive
impact.
6.
A
NNEX
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Main provisions for the end of the dual circulation period and exchange of legacy currency.
Free-of-charge exchange for customers
Free of charge for non-customers
Most banks will exchange legacy currency free of
charge up to a certain limit.
Many banks will exchange legacy currency free of
charge up to a certain limit (DEM 500).
Belgium
Exchange at banks after
legal tender
31.12.2002
Redemption after legal
tender
1
Notes: Indefinitely
Coins: Until end-2004
Indefinitely
Notes: Until 1.3..2012
Coins: Until 1.3.2004
Notes and coins: Indefinitely
Notes: Until 17.2.2012
Coins: Until 17.2.2005
Indefinitely
Notes and coins:
Until 1.3.2012
No limit
BEF deposit: free of charge without limit until 31
December 2002
BEF exchange: free of charge for notes without limit until
28.2.2002, with notice to be given for large amounts
Subject to each bank’s decision. Some banks have already
stated they will not charge for exchange of legacy currency.
Germany
Greece
At least until 28.2.2002.
Effort at flexibility
thereafter.
Positive; to be decided
individually by the banks
Spain
30.6.2002
France
30.6.2002
No limit until 30 June 2002 at banks for customers and
non-customers. Unlimited exchange at the Bank of Spain.
No limit
Ireland
Italy
For a period not yet
specified
30.6.2002.
Many banks will exchange legacy currency free of
charge for unlimited amounts. Notice is needed for
large sums.
Many banks will exchange legacy currency free of
charge up to a certain limit.
Most banks will exchange legacy currency free of
charge up to a certain limit.
Many banks will exchange legacy currency free of
charge up to a certain limit.
Many banks will exchange legacy currency free of
charge up to a certain limit.
Exchange free for non-customers within a limit fixed
by each bank.
Most banks will exchange legacy currency for a charge.
Most banks will exchange legacy currency free of
charge up to a certain limit.
Most banks will exchange legacy currency free of
charge up to a certain limit or for unlimited amounts.
Most banks will exchange legacy currency free of
charge up to a certain limit.
Luxembourg
30.6.2002
Netherlands
Indefinitely
Notes: Until 30.12.2022
Coins Until 30.12.2002
Notes and coins:
Until 29.2.2012
Notes: Indefinitely
Coins: Until end-2004
Notes: Until 1.1.2032
Coins: Until 1.1.2007
Household amounts up to an overall total of (at least)
IEP 500 per individual
Italian Banking Association recommendation: exchanges
for amounts up to twice the daily limit for withdrawals
from ATMs (about €500)
Unlimited exchanges with one working day’s notice.
Banks and post offices will exchange up to €1 000.
€-centres will exchange amounts of more than €1 000.
Private customers of banks can deposit and/or exchange
national currency free of charge until 1 April 2002.
Recommended a maximum of ATS 50 000
Austria
Portugal
31.12.2002 (banks may
charge for the exchange
as from 1.4.2002)
To be decided
individually by banks
after 28.2.2002
30.6.2002
Finland
To be decided
individually by banks
Banks recommend that the exchange be done by deposit.
Exchange free of charge for customers. Additional
exchanges depend on the rules of each bank.
No limit for amount or frequency when the exchange is
done by deposit.
1
At national central banks.
24