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Europaudvalget 2001-02 (2. samling)
EUU Alm.del Bilag 469
Offentligt

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

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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

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.

3.1.

3.2.

3.3.

3.4.

3.5.

3.6.

4.1.

4.2.

4.3.

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

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5.2.

5.3.

Practical difficulties encountered in switching to the euro ...................................... 22

Overall assessment of their changeover to the euro................................................. 23

Annex .................................................................................................................... 23

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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)

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.

C(2000) 2985, COM(2001) 190 and COM (2001) 561 respectively.

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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.

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

received them in December.

Dutch banks could though receive notes earlier if they so requested, as could banks and large sales outlets in

France.

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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.

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

IRL

FIN

Frontloading of banks as %

of notes in circulation

IRL

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.

The differences between participating countries were less marked. Generally

speaking, the orders placed by banks were met without any difficulty.

As a percentage of the value of notes in circulation on 15 January 2002.

Source: ECB.

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120

100

IRL

FIN

Frontloading of banks with coins

as % of circulation

IRL

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,

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.

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).

The total number of sub-frontloaded sales outlets varied enormously between

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.

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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%.

GR SP IRL IT

PT FIN

Sub-frontloading as % of

notes received by banks

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.

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F IRL

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:

- via withdrawals from automated teller machines (ATMs);

- via withdrawals at financial institutions (bank and post office counters);

Other possibilities included the weekly payment in cash of social security benefits in Ireland and the payment

in cash of retirement pensions in Italy.

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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.

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

Conversion rate of ATMs on

1 January

Conversion rate of ATMs on

2 January

Conversion rate of ATMs on

3 January

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

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.

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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.

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Share of euro payments in total cash payments

100

IRL

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).

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Return of national notes as % (in value terms) of notes in circulation on 31 December

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

IRL

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.

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.

Source: ECB.

A significant proportion of coins will never be recovered.

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National coins in circulation, in value terms (€m)

7000

6000

5000

4000

3000

2000

1000

IRL

FIN

31 Dec

31 Jan

22 Feb

Rate of recovery of national coins, in value terms (%)

IRL

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.

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

Source : BCE

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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

: 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.

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

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.

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.

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.

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100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

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

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

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.

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.

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).

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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

IRL

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.

On average, women have

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.

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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?

E L

IR L

N L

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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IRL

FIN

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

IR L

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?

IR L

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.

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

accounts in euros

prices in euros

invoices in euros

F IRL

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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IRL

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?

F IRL

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.

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

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.

At national central banks.