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Report of the expert working group on "Acceptance of the new prices and scales of values in euros".

Report of the expert working group on "Acceptance of the new prices and scales of values in euros".pdf

As a follow-up to the round table of 15 May 1997 on the practicalities of introducing the euro, the Commission invited trade, tourism and consumer representatives to meet in order to identify ways of making it easier for consumers to understand and accept the new prices and scales of values in euros. The Commission's main concern in setting up this group was to identify the conditions conducive to developing the use of the euro during the transitional period, to determine ways of building confidence in a single currency, to define the needs of the various categories of traders and consumers and to receive proposals for solutions suited to each of these categories. This document sets out the Working Group's conclusions. 

Without catalogue number

Executive Summary

FINDINGS (Summary by the group’s secretariat)

The group began by acknowledging the central role that traders will play in helping people understand prices and scales of values and accept the euro. Consumers are in direct physical contact with traders on an almost daily basis, and are thus by definition in a monetary relationship. The shop provides a testing ground for purchasing power and the functioning and acceptability of methods of payment.

The group agrees that it is in the common interest of both traders and their customers to ensure they understand the mechanics of the euro. This will involve the following:

- ongoing education and information campaigns;

- gradual familiarisation with the euro during the transitional period (1999-2002).

The phase that will see the dual circulation of coins and banknotes (January-July 2002) is considered too short to provide sufficient familiarity with the euro for all social categories. In any case, use of the euro in the form of bank money will become increasingly popular as from 1999 owing to the supply of goods and services invoiced in euros by traders (large businesses, banks, insurance companies, etc.) and the demand generated by certain users. Traders will thus be called on by suppliers and customers to work in euros. It is in the general interest that this be done under optimum conditions. The group identified various approaches:

* educating and informing traders to ensure they can cope with this dual demand;

* organising participatory awareness campaigns for consumers (practical handling of the euro and dual indication of prices and values) to reassure them and ensure that mistrust of the euro and the risks inherent in changeover are not directed towards traders;

* for the above two approaches to be implemented effectively, a number of conditions contingent upon other sectors (mainly banking and the public authorities) will first have to be met.

1. Prior conditions:

In order to foster understanding via gradual familiarisation with the euro as from 1999, the group thinks it essential that:

  • banks and operators of payment systems provide everyone interested in conducting transactions in euros with the means to do so (cheques, transfer orders, credit cards, electronic payments and the corresponding terminals, plus sufficient coins and banknotes in euros during the dual circulation period) at no additional cost compared with the same instruments in national monetary units;
  • the relevant government bodies authorise traders to enter amounts in euros in their accounts and make tax returns and social contribution declarations in euros, and allow traders and consumers to pay their taxes and duties in euros.

2. Education and information campaigns:

In order to foster familiarity with, and build confidence in, the euro, initiatives geared specifically to traders and consumers should be organised as part of a general awareness campaign and supported by national and Community authorities, viz.:

  • educational initiatives could be organised jointly by consumer associations, trade federations and certified training bodies. These might comprise specific information campaigns about handling the euro, courses in household budget management, concrete price conversion exercises, etc.;
  • specific initiatives could be run for consumers likely to find it more difficult to adapt to the new currency (the blind and visually impaired, the elderly, the very poor, the illiterate, etc.). To do this, the relevant hands-on tools and methods would have to be developed and used. Training could, for example, be provided for persons in direct contact with sections of the population likely to experience difficulties. These "mediators" would enjoy their confidence and play an educational role. Selection and training would have to start in late 1998. Small retailers will play an important role here, owing to their close contact with these sections of the population;
  • consumers welcomed traders’ proposals to adopt a pro-active and gradual approach to informing and educating the consumer by disseminating general documentation explaining the conversion rules used, supplying standard conversion instruments, indicating their willingness to accept payment in euros (where appropriate), displaying the equivalent total in euros on till receipts, etc.

3. Dual display of prices and values

The group considers the dual display of prices and values (details of which are yet to be decided on) indispensable for understanding the new prices and scales of values as from 1999. This would also make a major, and obvious, contribution to allaying recurrent fears about price increases. However, the group agrees that a general and systematic obligation to show two prices for each product is inappropriate. Opinions differ somewhat on the practical and legal arrangements for double pricing.

From the traders’ point of view, familiarisation could be facilitated by solutions such as dual pricing for basic consumer goods, displaying the total payable on the till receipt (which would not pose great problems) and providing other types of information to enable price comparisons (converters, price tables, interactive terminals, etc.).

Some consumers think regulation (albeit flexible) essential both before and after the introduction of coins and banknotes. Others would put regulation on hold pending the outcome of voluntary, negotiated and monitored arrangements.

Irrespective of the above, the group suggests that traders and consumers join forces to negotiate the rules to be applied as from 1999. These concern price display methods, practical payment arrangements and the minimum information to be given. Those that decided to apply these rules would be able to use a European label showing their commitment to do so. Compliance with, and the effectiveness of, these rules would have to be monitored by an independent body.

To this end, the group thinks that "local euro changeover monitoring centres" could be created. These would be responsible, amongst other things, for charting the general difficulties experienced by the different types of trader and consumer, monitoring application of the conversion rate and pricing practices, and helping settle non-fraudulent cases in the pre-litigation phase.

(Euro Papers. 18. January 1998. Brussels. Tab. Ann. Free.)

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