Sunday, July 08, 2001
Euro-fear Most people are quite simply petrified at the thought of using the new currency. Vaiju Naravane on the travails of the French in switching to the euro. JANINE POUSSIN owns a busy bread and cake shop in Paris. The turnover is very quick, especially at peak hours when there are long queues of impatient customers waiting to buy fresh, crusty baguettes. ``We have to work extremely fast and all the calculations are done in the head. The sums are modest and we deal in a great deal of small change. I was worried about how we would cope with the switch to the euro and, last Easter, instead of giving the customary chocolates to my employees, I bought them europoly board games. The girls used the paper money to conduct transactions in euros and we are now extremely proficient at using the new money,'' she says with justifiable pride. She is of a rare breed, however. With the introduction of the single currency less than six months away, most businesses in France have still to come to grips with the euro and studies show that most people in France are quite simply petrified at the thought of using the new currency. ``One fine morning I saw all the four figure amounts in my account reduced to three figures and I did a backward flip. I almost got a panic attack figuring out how I'd managed to spend so much, wondering where the money had gone before realising that employee accounts at the bank had been converted so as to give us a head start,'' recalls Ms. Anabelle Madeleine of the Credit Lyonnais. ``More seriously, we do expect a certain dislocation to take place. People seem to be gripped by paralysis and the information effort seems inadequate,'' she says. New regulations introduced a month ago oblige shops and businesses to display prices first in euros and then in Francs. However, the rules go largely ignored. ``I cannot do that. I don't want to scare my customers away. In any case, we will have to deal with the problem in six months time. Why break our heads now,'' asks Mehmet who sells groceries in his ``Arab corner shop''. Genevieve is conducting a ``euro class'' at an old people's home in Paris. She has distributed small euro converters, real euro notes and coins and is asking her pupils (average age 76) to fill up a shopping basket. The class is held in the gardens of the Maison Ste Jeanne with a blackboard erected against a tree. Most of her pupils are in wheelchairs. ``I would like you to buy me a kilo of red mullet, six eggs, a kilo of spinach, two litres of milk, two baguettes, a packet of salt, a roll of toilet paper and some soap,'' she tells the class. Alfred, a spry 80-year-old former schoolteacher, is at the top of the class. ``For all that I will have spent 21.6 euros or 142 francs,'' he says enthusiastically. But most of the others are bemused, at a loss. ``I just don't know,'' confesses Annie and blushes a tomato red. ``Children of course are very quick to learn and they have no problems at all. Its older people who put up resistance because they are simply afraid. I conduct adult literacy class as well and there too, my students struggle very hard,' Genevieve says. Dominique Duhem is Mister euro at the Bank Credit Mutuel. ``From the point of view of the banking sector we appear to be on tack. At the Credit Mutuel alone, for instance, we have distributed one million euro chequebooks and will have to send out another five million in the next few months. We are having some difficulty convincing businessmen to invest in `euro' business machines. Right now, we are transferring all the savings accounts from francs to euros. The next five months are going to fly past and I fear there will be a shortage of trained staff to deal with the inevitable last minute rush of clients who have left things too late. Problems could occur in the dealings between individuals and shopkeepers and that has to be watched carefully.'' Indeed economists fear an inflationist wave. ``I am worried that shopkeepers will take advantage of the switch to the euro to jack up prices. Who will be able to check whether the French prices have been retained? For the Germans and the Italians everything is a lot simpler because they only have to halve or double the sum - more or less. In France, one euro is equal to 6.559 francs and that makes calculations complicated. The shopkeeper is then tempted to ``round off'' the figures in euros and of course, it is going to be an upwards rounding off. We have tried to hold talks about this with shopkeepers' associations and they have given us certain guarantees. But we fear that the consumer will be made to pay for an inflationary spiral,`` says Ms. Rebecca Schneider who works for the National Consumer's Association. According to Mr. Jean Claude Hassan, the French Finance Minister's top ''euro`` adviser, the problem is simple: ``As of January 1, 2002, we will mint just one currency, the euro, in which all transactions must be made. The closer we get to that situation as of now, the better it will be for us. I applaud the decision by the French electricity company EDF to start billing in euros. Other large billing organisations such as phone companies, banks, insurances houses should emulate this example. The Government has decided to pay its employees in euros as of this month. Our research shows that while most people have absorbed the fact that at midnight, on December 31, 2001, all transactions in Francs will cease, they have yet to realise that it will not be possible to use francs after February 28, 2002. We have given people two months to get used to the switch. After that the franc will become a museum piece.''
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