Retailers urge earlier issue of euro money

Date: 29/07/1999

By Renée Cordes

A COMMITTEE of EU experts is demanding that euro coins and notes be distributed to retailers and consumers before 1 January 2002 to ensure a smooth transition to the single currency.

The group, which represents a range of commercial sectors, argues that issuing sufficient quantities of the new currency before it officially enters into circulation would reduce the risk of chaos and the danger of fraud during the initial change-over period.

The expert group's report, which is now being discussed by European Commission officials, warns that retailers will need to hand over up to five times the normal quantities of change in the first few days after the euro becomes legal tender.

"If, on 1 January 2002, all of a sudden you have new money in circulation without giving consumers and retailers a chance to prepare, it will be absolute chaos," said Henrik Kröner, secretary-general of the lobby group EuroCommerce, which represents European retailers and wholesalers.

EU leaders agreed four years ago that the European Central Bank must introduce the new notes and coins by 1 January 2002 at the latest. They also agreed that the new money would circulate alongside national currencies for up to six months, although they left it up to each member state to decide how to manage the transition.

Retailers fear that businesses will be ill-equipped to deal with 60 billion new coins and 13 billion new notes overnight, prompting the demand for the money to be distributed early. They also argue that consumers, especially those who are blind, should be given a chance to familiarise themselves with the new money in advance.

Meanwhile, the Commission is stepping up pressure on member states to monitor the way firms are converting their prices to euro more closely.

The Directorate-General for consumer affairs (DGXXIV) has launched a study to see whether retailers are abiding by the voluntary commitment they gave last year not to use the switch-over as an excuse for inflating prices.

The report, which is due out by the end of this year, will also investigate the extent to which member states have started setting up agencies to monitor implementation of the 1998 accord signed by EuroCommerce.

Under that agreement, retailers pledged not to charge customers extra for paying in euro, to give all "appropriate information" about the rules on when and how to use the euro during the 1992-2002 change-over period and to increase the proportion of products marked with dual prices until the transition has been completed.

The European consumer lobby group BEUC has welcomed the Commission's plan to monitor progress in member states. But a spokeswoman expressed concern that some, for example Spain and Germany, had not yet set up monitoring agencies. "In some countries the installation of observatories has been late, while in others there are no plans to do so," said Kätrin Schweren.