26 February Euro round table

Date: 05/03/1998

THE European Commission-hosted second round table on the practical aspects of the euro concluded that the financial services industry and retailers should regulate themselves on outstanding issues surrounding the start of the single currency. However, the round table, which brought together 450 experts in all key areas of the euro's introduction, agreed that the Commission could come forward with legislative proposals in future if self-regulation failed. In April, the Commission will draft guidelines on self-regulation for the 2-3 May summit, which will then be turned into a code of conduct.

PARTICIPANTS agreed that the period of dual circulation of national currencies and the euro - from January to June 2002 - should be kept as short as possible and harmonised among member states. The European Vending Association (EVA), which represents vending machine operators, argued for a specific transition period to using the new coinage. “Ten million coin acceptors cannot be changed in one day,” said the EVA in a statement to the round table. The association said the authorities should inform consumers that vending machines would “follow a different transition route” and they should therefore keep old coins. The authorities should supply the old currency for this purpose and a high degree of flexibility would be needed to take this into account, the EVA said. The Commission made it clear that the precise period of dual circulation would be decided by the European Central Bank.

THE round table approved a set of pledges already made by the main banking lobbies regarding charges for converting national currencies into euro. The European Banking Federation and the European Savings Banks Group stated that they would observe “legal equivalence” between the euro and national currencies. This meant that any charges made for services would be the same in euro as in the national currency, with no hidden extras attached.

Consumer groups pressed for the services to be carried out free of charge since the euro had been imposed on consumers, but the banks claimed that this also applied to them and their costs were enormous. The European Association of Building Societies pledged the one-way conversion of accounts from a national currency unit into euro would be free, although fees would continue to be charged for cross-border services.

THE European Mortgage Federation (EMF) welcomed the report of the expert group on banking fees in a letter to Economics Commissioner Yves-Thibault de Silguy and his colleagues. The EMF noted that in Austria, Belgium, Finland, Germany and Spain, mortgage lenders had already promised not to charge for converting accounts into euro. However, such pledges have so far not been made in other member states.

SIMILARLY, dual pricing of goods in national currency and euro will be left to retailers on the condition that an official conversion rate is used to make the calculation. The Commission promised to review the workings of this principle once EMU was under way and to introduce regulations if necessary.