Commission bids to counter public ignorance

Date: 06/01/2000

By Simon Coss

EVEN though the euro has been a reality for more than a year now, the European Commission believes people still do not know enough about the single currency.

The institution is set to publish a detailed report later this month on how it believes the 'euro message' should be put across to ordinary Europeans between now and January 2002, when notes and coins denominated in the single currency will finally enter into circulation.

Some critics question the need for even more information on the euro, given the publicity campaign which has been under way in most EU member states for more than two years now.

But the Commission insists that there are millions of ordinary members of the public who are still not fully prepared for the changeover, and aides to Economics Commissioner Pedro Solbes argue that it is important to inform these people about how the switch from national currencies to the euro will affect their daily lives.

They say that one of the most important aspects of any forthcoming information campaign must be, quite simply, to reassure people that the change can and will be handled smoothly and that their bank accounts and savings are entirely safe.

"All of the polls show that people who are well informed about the euro are the most relaxed about it," said Gerassimos Thomas, spokesman for the economics supremo.

One of the largest groups to be targeted by the new campaign is likely to be the Union's small business community, amid concern that many small and medium-sized enterprises (SMEs) appear woefully ill-prepared for the changeover.

According to a report presented by former Economics commissioner Yves-Thibault de Silguy to EU finance ministers earlier this year, the average SME will need around two years to adapt its banking, accounting and billing methods to cope with the euro.

Yet millions of small businesses across the Union have not even begun to put into place the sorts of changes needed. "Some businesses still seem to think that they will be able to continue trading in national currencies after 2002," said one of the experts involved in drafting the report to be published in January.

The latest evidence from the Commission certainly seems to bear out concern about a somewhat blasé attitude to the single currency on the part of the Union's small business community.

At present, the euro is used on average in just 1.9% of transactions made by national businesses and the number of SMEs which prepare their accounts using the single currency is extremely low. In the Netherlands, just 0.3% of businesses have switched to euro accounting and even in Luxembourg, which has the highest proportion of pro-single currency businesses in euroland, only 7% of firms currently draw up their balance sheets using the new money.

Some say it is not surprising that the euro has not yet made much of an impact on the small-business scene. They point out that until the new currency becomes a physical reality with the introduction of the notes and coins, it will essentially remain the domain of the international money markets, where transactions are carried out completely electronically.

But the Commission is adamant. It argues that unless small firms start preparing for the changeover - and soon - they will face real problems in 2002.

The institution is also likely to call for the Union's various public administrations to step up their efforts to get ready for the switch. In particular, it will call on national tax offices to give people more information about filling out their annual returns in euro.

All euroland administrations already offer this possibility, but the take-up rate has so far been very low because, the Commission believes, citizens are not aware of their rights.

The institution is also likely to call for the practice of 'double-pricing' - indicating the cost of consumer goods in both national prices and in the euro - to be introduced right across the single-currency zone. Use of the system currently varies widely between Euro-11 countries.

In France, for example, around 80% of shops now display both prices on products, but the figure drops to just 10% in Portugal, where the practice is least common.

Those shops which do double price usually display the national currency value of a particular product in large letters and its euro equivalent in a smaller typeface. The Commission is likely to suggest that 2000 should be the year when this practice is reversed.

As with the EU's previous information campaigns on the euro, the Commission wants the publicity push planned for the next two years to be as de-centralised as possible - an approach which will enable individual member states to tailor their information campaigns to specific national needs.

EU cash for all planned national information campaigns would once again be made available using the 'matching funds' principle. This means that euro-land governments would agree to match money provided from Union coffers 'euro for euro'.

Major feature. Even though the euro has been a reality for more than a year, the European Commission believes people still do not know enough about the single currency. The institution is set to publish a detailed report on how it believes the 'euro message' should be put across to ordinary Europeans before January 2002, when notes and coins denominated in the single currency will finally enter into circulation.