Euro vision contest ahead

Date: 04/01/1996

By Tim Jones

AT their summit in Madrid last month, the European Union's leaders gave themselves a pat on their collective back.

In record time, they had managed to agree that a single currency bloc would be created in January 1999 and the new currency would be christened the 'Euro'.

The only outstanding issue was how to convince the EU's 370 million inhabitants that this Euro would be their friend.

Industry needs to know exactly what it should do to prepare itself for the changes that will come as soon as three years from now, while banks have to start spending the estimated 10 billion ecu needed to bring them into the new world of the currency union.

Equally crucially, Europe's citizens need to know that the Euro's introduction would not coincide with rising unemployment, be a cover for price rises or eradicate the cultural differences between French and German, Dutch and British.

“We have to carry the people with us,” says Economics Commissioner Yves-Thibault de Silguy, “and this means demonstrating why we need it, explaining to them how and when the change-over will take place, and helping them to make the adjustment as smoothly as possible.”

Even if only Germany, France, the Netherlands, Austria, Belgium and Luxembourg form a union in January 1999, this will mean a complete currency change-over in a union of 172 million people with different cultures, industrial structures and banking traditions.

Nevertheless, says de Silguy, the task should not be overstated. “140 million Brazilians changed (in 1994) from one currency to another, completely new one, in just a few days. I don't see why Europeans should be incapable of managing a transition which will be more gradual, as long as we prepare it well enough.”

In the coming weeks, the Commission will take the first steps along this road. Already, the single currency campaign has been offered a share of the Union's 50-million-ecu information budget, with 15 million up-front and another 35 million ecu in reserve.

Admittedly, it must share this with the EU's 'Citizens First' initiative - designed to make the internal market relevant to the citizen - and the Intergovernmental Conference, but the single currency campaign will be hoping to make an early splash.

This will come on 22-24 January when the Espace Léopold hosts its largest gathering since the Group of Seven conference on information highways which took place last February.

This Round Table on the single currency is intended to be the forum where the 'main players' hammer out the guiding principles of a campaign to sell the single currency in the years leading up to the fixing of exchange rates and the creation of a European Central Bank in 1999.

The Commission is thinking in grandiose terms. The first day of the Round Table will coincide with a meeting of EU finance ministers in Brussels, so they will be expected to turn up along with central bank governors for the first round of talks.

Apart from them, politicians and former prominent single currency advocates like Valéry Giscard d'Estaing and Helmut Schmidt have been invited, along with representatives from the advertising industry, consumer groups, trade unions and student societies.

On top of this come the 1,600 journalists who have been sent invitations to the meeting. Since all the meetings will be open, the Commission is determined the Round Table will receive as much media coverage as possible.

An exhibition aimed at the general public will be held alongside the discussions. This will include an electronic simulation of a trading room using the new currency, a history of money and a video on monetary union aimed at the young.

The campaign already has a logo; an egg-timer with coins in the top half and the 12 stars of the EU flag in the bottom. But while several public relations and advertising firms have already approached DGX (the Directorate-General for information) to offer their expertise in selling products and running campaigns, the Commission is far from reaching this stage yet.

“The point of this Round Table is to get people's views,” says a Commission spokesman. “We want to hear the voice of politicians, the business community as well as the consumer, the non-governmental organisations and so on. But when it comes to a campaign, it's far too premature to say you should do this or that.”

The only contract to have gone out so far was awarded in the week before Christmas to public relations firm Hill & Knowlton for assistance in running the press centre.

Other more general contracts will not be considered, at least until the conclusions of the Round Table have been fully assessed. Even then, the Commission may well want to keep as far away from the information campaign as possible.

“The whole idea is to make it as decentralised as possible in the member states. It is not Brussels-driven,” said one official. “The Round Table is meant to stimulate ideas. It may not be appropriate, for example, to begin television advertising for some time.”

What 'Brussels' can do, however, while carefully avoiding treading on highly-sensitive national toes, is coordinate. This it will do partly through a patronage committee made up of old Commission hands and others with expertise in the area of the single currency.

These will include Jacques Delors and his former sparring partner from the early days of the monetary union project, former Bundesbank President Karl-Otto Pöhl, plus former Commissioners Henning Christophersen, Frans Andriessen and Etienne Davignon, as well as Dutch Prime Minister Wim Kok and Financial Times columnist and brother of Sir Leon Brittan, Samuel Brittan.

Although most members on this list could be described as sympathetic to the cause, they do not all share the same vision of monetary union. “The whole purpose of the campaign is that it shouldn't be just a mass of cronies and supporters,” says a Commission spokesman. “We have deliberately written to people who will not toe the party line.”

This is also the aim of the Round Table itself. The meeting will begin on the afternoon of 22 January with a debate among finance ministers and central bank governors on the task ahead, followed by a dinner hosted by Commission President Jacques Santer and European Monetary Institute President Alexandre Lamfalussy.

The next day, the meeting will divide into three workshops concentrating on the effects of the single currency on the consumer, on the financial services and industry and on public administration.

The consumer workshop aims to help people adapt successfully to a single currency, allay their fears and make them “feel comfortable” with the Euro notes and coins.

This could mean, as the Commission has suggested in the past, that shops and supermarkets may be encouraged to double-price goods with the Ecu/Euro price alongside the national currency price. This system of double-pricing could even be extended to bank statements and utilities bills.

The second workshop will try to draw up a hit-list of the communication needs of the financial services industry and industrial companies during the currency change-over and examine how well prepared they are.

The final workshop is aimed at government representatives and is, for some, the most important. Since the EU's institutions will be reluctant to take too forward a role in member states, it will be largely up to national and local authorities to push other groups into taking initiatives.

The onus will be on governments to create the new legal framework for the currency, set up new accounting and fiscal standards and ensure social security recipients are not frightened by the changes.

Once the workshops are complete, a final plenary session will be held to spell out to the national and European authorities exactly what it is that the consumer and industry want from them.

With this out of the way, the Commission will set out on the slow path to selling the idea of a single currency to a general public which, on its own admission, has been falling out of love with the EU.

For German Bundesbank President Hans Tietmeyer, the task is simple and stark. “We will try to sell a vision of stability,” he says.