Table Of ContentThe Euro: Consequences for the
Consumer and the Citizen
Edited by
Thierry Vissol
Reprinted from the Journal of Consumer Policy, Volume 22,
No. 1-2 (1999)
••
SPRINGER-SCIENCE+BUSINESS MEDIA, B. V.
A C.I.P. catalogue record for this book is available from the Library of Congress.
ISBN 978-1-4613-7375-9 ISBN 978-1-4615-5213-0 (eBook)
DOI 10.1007/978-1-4615-5213-0
Printed on acid-free paper
Ali Rights Reserved
© 1999 Springer Science+Business Media Dordrecht
Origina11y published by Kluwer Academic Publishers in 1999
Softcover reprint ofthe hardcover Ist edition 1999
No part of the material protected by this copyright notice may be reproduced
or utilized in any form or by any means, electronic or mechanical,
inc1uding photocopying, recording or by any information storage and
retrieval system, without written permission from the copyright owner.
Contents
Foreword iv-vi
Introduction 1-6
Articles
JEAN-MICHEL SERVET / How can European Users and
Consumers Have Confidence in the Euro? Six Socio
Economic Hypotheses 7-49
BRUNO nffiRET / The Socio-Political Dimensions of the
Currency: Implications for the Transition to the Euro 51-79
ROLAND PEPERMANS and ANKE MULLER-PETERS /
Differences in Information Requirements Among
European Citizens: More Psychology Than Socio
Demographics 81-90
CAROLE B. BURGOYNE, DAVID A. ROUTH, and
ANNE-MARIE ELLIS / The Transition to the Euro:
Some Perspectives from Economic Psychology 91-116
CARLA COLLICELLI / Introduction of the Euro and the
Dense Society 117-133
VICENTE PEREZ PLAZA / The Euro as a Political
Communication Process: Quality Requirements 135-147
NORBERT REICH / Stabilizing Citizen and Consumer
Expectations by Legal Means when Introducing the
Euro in the Participating Member States 149-168
THIERRY VIS SOL, STEPHANE LAYA NI, and HELENA
RAM6N / The Outlook for the Euro Changeover:
A Summer and General Analysis 169-200
Annex
Report by the Euro Working Group of the Consumer
Committee 201-256
Conclusions 257-260
Foreword
"EURO". The name of the single currency for the European Union
has not been chosen casually by the Heads of State and Government
during the Madrid Council of December 1995. After tough discus
sions, it has been unanimously accepted. The intention was to recall
to every single citizen that this new money would be his money, that
it would be the expression of the new European environment carefully
built since the "fifties" to avoid any return to war and barbarism in
Europe. Confidence and positive expectations for a better future put
in the European construction have thus been clearly linked to the
confidence in the new European currency and vice-versa.
Euro notes and coins will be the first expression, clear, material and
universal (for any European citizen being young or old, rich or poor,
but also for the rest of the world) of a European identity alongside
the national one. Obviously, it is of the outmost importance that the
change over to the euro, be as smooth and as citizen-friendly as
possible.
The technicalities of the changeover, on the 1st of January 1999,
have proven to be successful. Computer programs worked well,
financial markets were not perturbed at all and accepted the newcomer
euro without any problem. The euro has became an international
currency in competition with the American dollar and the Japanese
yen. The European Union has now a real prospect to have a influ
ential role in the world economic and money order. European leaders
and Institutions clearly intend to build on this "acquis communautaire"
and develop further the European capacity of managing its future.
This technical and international success story needs, nevertheless,
to be transformed in a European citizenship success.
As can be understood from the words used supra, money is not only
a neutral means of payments. Money implies a reciprocal confidence.
First, confidence of the users must be built towards those who are
managing it and the Institutions (public and private) who are operating
it. Second, there must be a level of confidence from those who are
managing it towards the users.
To respond to the first level of confidence, there is an absolute need
to insure that:
Foreword v
- all interests are taken into account;
- the legal framework is strong enough and strictly applied to maintain
the public order and;
- an equal treatment is given to all operators.
The European Institutions and the Member States have answered to
those needs through strict Legislation and Recommendations.
The second aspect of confidence remains to build. It implies to
consider the future users as citizens who need to know and understand
why they have to accept such a change in their life, what will be the
consequences of the adoption of the euro and how to operate it. This
last point is certainly crucial.
Let us imagine what will happen in 2002 when notes and coins will
be introduced.
January 1, 2002. All professional operators, banks, firms, admin
istrations ... , will have changed over to the euro. All their accounts,
activities, prices etc. will have to be expressed in euros. Notes and
coins in euro will be introduced on a very large scale. Probably most,
if not all, cash dispensers will deliver euro notes. But in any case,
banks postal offices and financial institutions will deliver euro notes
and coins to their clients. It will not be possible any more to get
from them notes and coins in national currencies. In most countries,
if clients still pay in national currencies, shop keepers will have to
give the change in euro.
March 2002. In most countries of Euroland the euro will be the
unique currency used for payments of whatsoever nature. We shall
have to count and to pay and be paid in euro. The single currency
will be the only monetary reality for everybody, even if it will still
be possible to exchange old notes and coins in national currency
units for a long time.
It means that, if nothing is done to prepare and educate citizens
to practice the euro in advance, a large number will plunge, from
the very beginning of January 2002 in a complete new world and
that they will have to learn, virtually immediately how to behave. If
they have not at least understood the reasons of that change, this
perturbation of their daily life and the misunderstanding of its con
sequences on their future, may negatively affect their confidence in
the new currency.
It was then of the outmost importance to better understand the social
and psychological implications of such a change of money. This is
VI Foreword
the reason why the European Commission, through its Directorate
General XXIV (Consumers Policy and protection of their health)
decided to launch in depth studies on these aspects. This book presents
the main results of these theoretical studies made by well known
experts of the sociological and psychological aspects of money. These
theoretical works made in 1997 and beginning of 1998. Their interest
led the Commission to envisage to put their results in to practice.
Thus, they were completed by a large-program called "The euro
made easy" which began in May 1998 and was completed in July
1999. Working groups of impaired people (blind and visually impaired,
deaf, persons with mental handicap) or people having a difficult access
to information (persons in difficult economic or social situations old
persons) have been constituted in several Member States (Belgium,
France, Germany, Italy, Portugal, Spain) to help to better understand
the potential problems they could encounter. Once this had been done,
the same working groups were asked to "invent" the best informa
tion and formation tools to answer to the wide range of potential
problems. This has been extremely successful. All tools will be oper
ational by the end of 1999 and put at the disposal of those who would
like to use them.
The conclusion of the book presents therefore some ideas on how
to proceed to use these results and help National authorities to build
the confidence of the citizens in their new currency.
I would then like to take this opportunity to thank all those hundreds
of citizens (more than 1,500 people were involved), animators and
scientists who contributed to those work, they really deserve it.
Thierry Vissol
Brussels, July 1999
Thierry Vissol
Introduction
The technical work on the euro was started in various quarters, and
obviously in the European Commission, as soon as the Treaty on
European Union was signed in 1992, and was further developed fol
lowing its ratification. The task initially was to ensure that things
would run smoothly, and it was not until this essential preliminary
work had been completed that a practical scenario for the changeover
could be envisaged and the general public and consumers included
in these discussions. While these two groups of people did not take
a large part in this work, several representatives of the European
consumers' associations were involved in preparing the scenario
adopted by the Madrid Council in December 1995.
In 1996, the Commission set up a Euro Working Group through
its Consumer Committee, which brings together all the families of
consumers' associations and is responsible for providing the
Commission with reasoned opinions on consumer policies and
measures. This Group also included representatives of the European
associations of blind and partially sighted people, the elderly and
the very poor.
In 1997, they were joined by a team of psychologists, sociolo
gists and experts in people's attitudes to money, of various
nationalities. Their task, in cooperation with the Euro Group of the
Consumer Committee, was to take a closer look at all the psycho
sociological issues related to the currency and, wherever possible,
to draw practical conclusions about the measures to be taken in order
to facilitate the changeover to the euro for the various population
groups.
As soon as it was decided to work with the representatives of con
sumers and of the various population groups, the task had to be
organised in such a way as to answer three questions:
1. What is the changeover to the euro?
2. What is a currency?
3. What is a consumer?
2 Thierry Vis sol
The answers to these three questions would then be used to produce
guidelines that could be transformed into action on various fronts.
1. WHAT IS THE CHANGEOVER TO THE EURO?
The changeover to the euro is primarily the result of a long process
of European economic and monetary integration that actually began
shortly after the establishment of the common market in 1958. As
far back as the early 1960s, the dollar crisis led Europeans to question
whether or not the Bretton Woods international monetary system based
on the US dollar was functioning properly and would last. This process
of reflection led to the conclusion that monetary cooperation had to
be strengthened, which was done by establishing the Committee of
Governors of the Central Banks of the Member States in 1963.
Subsequently, even though the customs union and then economic union
were established more rapidly, monetary cooperation increased at
the same pace as the disintegration of the Bretton Woods system.
The "snake," the ecu, the European monetary system, the economic
policy guidelines and the Economic Policy Committee were all
advances that strengthened links and interdependence in economic and
monetary matters, while at the same time ironing out any difficul
ties in the political cooperation mechanisms through the Monetary
Committee and the ECOFIN Council.
In short, the Economic and Monetary Union that resulted and the
euro, which is one of its pillars, are the fruit of a process of economic
and monetary convergence whose mechanism has now been incor
porated into the Treaty of Rome and whose objectives are internal
economic and monetary stability and external monetary stability.
Figure I, showing the development of long-term interest rates, is the
best expression and illustration of this process of convergence.
In other words, the transition to the euro is anything but a monetary
reform in the sense understood after the Second World War, when
the monetary and financial systems of the war-stricken European
countries had to be reformed or re-established. Nor is it a devalua
tion.
In practical terms, it amounts to a change of unit of account that
does not alter values or private or public contractual relationships in
any way. In even simpler terms, for citizens the changeover to the euro
should mean nothing more than the division of all prices and units
Introduction 3
13 13
12 12
.. 11 11
... 10 10
~
9 9
:;;
w
'" 8 8
I!!
;!;
7 7
6 6
5 5
4 -~--------~-----------+-----------r-------L--+4
1995 1996 1997 1998
Figure 1. 10 year market interest rates (monthly average).
of value expressed in national currency by a constant factor. The fixed
coefficients for division (the "conversion rate" set by the Council
on 1 January 1999) correspond to the equilibrium exchange rate of
each of the national currencies against the other currencies in the euro
zone and against the forerunner of the euro, the ecu, given that, in
relation to the currencies of non-member countries, one ecu was equal
to one euro on the day of the changeover (1 January 1999).
It follows that the changeover to the euro must be neutral in social,
legal and economic terms for all those affected by it. Law and practice
must ensure that it is a non-event - something that has no effect on
the status quo. Even so, it is necessary to identify all the aspects of
the complex economic, legal and social puzzle which, in the absence
of surveillance by the authorities or a proper legal framework, might
be modified for the benefit of some, rather than all, economic agents.
2. WHAT IS A CURRENCY?
A currency is both one of the variables or instruments of monetary
policy and an essential technical instrument in trade. However, this
purely economic vision of a currency is extremely narrow.
This is because we may say that currencies came into existence
more or less at the same time as the division of labour and as soci
eties organised around a political power in an urban structure. In short,
their origins go back to about 4000 BC in the Middle East. Means
4 Thierry Vissol
of exchange, units of account and a means of storing value, in forms
of all kinds (strands of precious metal, grain, bars of salt, the stands
of sacrificial cauldrons, precious objects, symbolic axes, knives,
symbolic shells, abstract units, etc.) before coins came into general
use (in about the 7th century BC), were essential in order to ensure
that trade functioned and was fair and that taxes were paid, and to
manage private and public riches or organise ceremonial rites. Seals,
writing, balances and monetary instruments all form part of the same
intellectual process and express and convey the legitimacy of the
powers-that-be in order to ensure that complex societies function
properly.
In the same way, monetary units were used very early on to estab
lish a hierarchy of crimes and sanctions, as shown by the Hammourabi
Code (1750 BC) or the Book of Deuteronomy in the Bible.
Thus, from the very beginning of societies, monetary instruments
have been both an attribute of sovereignty and a service in the common
interest, considered to be public property and related to what we call
in law "public order." Religions and powers complemented each other
by applying material sanctions or by discrediting forgers, counterfeiters
or traffickers of weights, measures and currency. The Bible and the
Koran, to mention just two holy texts, often curse these dishonest
people. Accordingly, certain historians think that the use of round
pieces of metal as currency spread through cult practices in honour
of Dionysus or Isis.
However, beyond these political and religious considerations, the
currency also affects many other aspects of society. As the vehicle
for trade, the currency - which, by its very nature, forms a strong
social bond, not only between the individuals who use it but also,
through taxation, between individuals and the State - is as old as
political power and redistribution, be it religious or secular. This social
reference point establishes a link between the members of a society
and its organisation and promotes their trust in its officials.
The values expressed in monetary units are also a language that
is deeply rooted in the individual and collective unconscious and
that allows us to purchase without thinking (scales of value and
memory of prices). Suffice it to point out that writing was invented
out of the need to supplement human memory in order to store
economic information on taxation, international trade and redistribu
tion. The currency as a unit of account contributes to this movement
