Governments plan rapid switch to euro

Date: 10/12/1998

By Renée Cordes

Several EU governments are planning to allow citizens just four to six weeks to swap national notes and coins for euro in 2002 instead of the maximum six months, in a move designed to avoid confusion and avert fraud.

They have, however, so far rejected retailers' calls for national currencies to cease being legal tender as soon as the euro money begins circulating, arguing that consumers will need time to adjust.

EU leaders stipulated three years ago that the European Central Bank would have to introduce the new banknotes 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 precisely how to manage the transition.

The Dutch finance ministry is proposing a dual-circulation period of just four weeks, Belgium is likely to do the same and France is expected to opt for a six-week switch-over.

Germany, which was the only country to espouse a 'big bang' switch to the euro when plans for the transition were originally being hatched, is expected to adopt a dual-circulation period of two to three months. "It is quite inconvenient to have two currencies circulating together for a long time," said one diplomat.

Europe's retailers are, however, still urging governments to eliminate the planned dual circulation period altogether. Under their proposals, national currencies would stop being legal tender from 1 January 2002, although people would be able to continue exchanging their old money for euro long after that.

EuroCommerce, which represents Europe's retailers and wholesalers, is also pressing for member states to introduce 'exchange points' in banks and stores where consumers could swap their money rather than allowing companies to handle two currencies simultaneously.

Some interest groups argue that an immediate switch-over is the only way to minimise the confusion. "If you have any kind of dual circulation period, the citizens will be subject to cheating and mistakes," said Friso Coppes, EU affairs director for the Dutch consumer group Royal Ahold. "Even if you have a six-week period, the risks remain."

However, others fear that businesses will be ill-equipped to deal with 60 billion new coins and 13 billion notes overnight.

"We think people need to adapt to the currency," said Katrin Schweren, economics advisor to EU consumer group BEUC, warning that blind and elderly people could find it especially difficult to cope . "As a compromise we suggest in the first weeks you pay in national currency and get your money back in euro."

Schweren said that it would be better for member states to coordinate their approaches to ensure a smooth transition, rather than setting different timetables for phasing out national currencies.

Feature on how long EU Governments are planning for European citizens to make the changeover to euros in 2002.