Opinion of the Economic and Social Committee on the "Communication from the Commission to the European Parliament, the Council, the Economic and Social Committee, the Committee of the Regions and the European Central Bank: Practical aspects of the euro: state of play and tasks ahead"

(2001/C 155/11)

On 19 September 2000 the Commission decided to consult the Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on "Practical aspects of the euro: state of play and tasks ahead".

The Section for Economic and Monetary Union and Economic and Social Cohesion, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 13 March 2001. The rapporteur was Mr Burani.

At its 380th plenary session of 28 and 29 March 2001 (meeting of 29 March), the Economic and Social Committee adopted the following opinion by 73 votes to one with four abstentions.

1. Introduction

1.1. As the date for the euro's entry into circulation as banknotes and coins approaches, the Commission thought it useful to take stock of the situation with the Communication(1) of 12 July 2000, which was followed by the Recommendation 303/05 of 11 October 2000. Between the two dates, the Commission brought out two Euro Papers(2) which complete the picture and provide much valuable information.

1.1.1. By means of this opinion, the Economic and Social Committee intends to make its own contribution - in the light of the experience and knowledge of the social and occupational groups whom it represents - to an objective assessment of the problems, at the same time formulating proposals which it hopes will be useful.

1.1.2. A rational approach would lead it to examine first and foremost the Communication and the Euro Papers which make up the basis for a line of reasoning, and then the Recommendation which is the practical consequence of that line of thought.

1.2. The ESC has already dealt with the practical problems concerned with the introduction of the euro on a number of occasions; in particular it draws attention to the following opinions:

- Opinion on the Green Paper(3);

- implications for the market (own-initiative opinion)(4);

- practical aspects(5).

It would point out that nearly all the observations and forecasts made in the past, in these and other opinions, have been borne out by events; at the same time, it cannot but confirm the validity of some of its suggestions which, although not taken up, are still well-founded.

2. Part I - The Communication and the Euro Papers

2.1. The current situation

2.1.1. Enterprises

2.1.1.1. Many of the large enterprises - especially multinationals - have already adopted the euro as their accounting currency and others are at an advanced stage of preparation. The Commission expected a "snowball" or "trickle-down" effect(6) in relation to the SMEs, but this effect did not occur. In this context the Committee had pointed out(7) that "the need to establish some form of interface between Single Currency internal operations and transactions in national currency could be a source of increased costs and complications". This point - based on the rationality of the choices - is still relevant and will remain so until the end of 2001: it should be borne in mind when planning actions for the intervening period before the euro comes into circulation.

2.1.2. However, the rationality of earlier choices does not in any way justify either the failure to recognise the strategic consequences of the switch to the euro or, in practical terms, the disturbing tardiness of many - too many - firms in preparing themselves for the introduction of the euro: whilst 60 % of large firms are due to complete the conversion by the end of 2000, more than half of SMEs estimate that they will not be ready for the final deadline of 31 December 2001. If this is a realistic picture of the situation, it is more than disturbing: the Commission takes the view that there is a serious risk that at the end of 2001 bottlenecks may develop in terms of availability of IT and accounting resources. The Committee had drawn attention to this aspect(8), calling upon the Commission to ascertain, in cooperation with the computer industry, whether the latter's resources were consistent with planned deadlines and the resources available.

2.1.2.1. However, IT preparation is the final stage of the administrative preparation phase - rather a lengthy task even in the smallest enterprises. The most serious problem, therefore, is not that of a possible lack of IT resources, but that of a lack of preparation tout court. If a large number of firms were unprepared, a risk would arise for society - other firms and citizens/consumers - from a nucleus of firms incapable of working in the legal currency. For the moment, the risk is only theoretical, but the Member States should devote all possible attention to this possibility: in addition to preventive measures, it must be decided what to do if the risk does in the end materialise.

2.2. Citizens/consumers

2.2.1. Acceptance of the euro on the part of most citizens/consumers has been somewhat lukewarm - "significantly less than was anticipated before the introduction of the euro on 1 January 1999"(9). This lack of interest has perhaps been sustained by the euro's disappointing performance against the dollar, particularly in 2000. The fact is that demand for new accounts in euro has been minimal, as have been payments in euro, apart from those for transactions in securities which are compulsorily expressed in euro; the payment terminals (50 % of which are already designed to work in two currencies) are very little used. It is also worth noting that institutional investors have shown much greater interest in the euro than have ordinary consumers.

2.2.2. The Communication(10), like the Euro Paper(11), proposes that "owners of terminals could be encouraged to speed up the conversion to the euro"; more generally, it states "thought will have to be given to the ways of prompting citizens to make more active use of the euro means of payments". It attributes the fall in interest on the part of consumers to a reaction to the high bank charges on financial transfers in the euro area, among other reasons.

2.2.3. The reasons given by the Commission for the fall in interest appear to have no basis, at any rate in this field: the opening of accounts and the use of terminals have nothing to do with international transfers, which in any case constitute a tiny proportion - 1 % - of the total of domestic transfers; bank charges (which will be discussed below) are the same for transfers in the national currencies of the euro zone as in euro, and it does not seem that their overall value has diminished. The Committee thinks that the reasons are to be found elsewhere, as it will explain in more detail below.

2.3. The dual display of prices

2.3.1. The Communication(12) points out that the dual display of prices is very widespread in a majority of countries, particularly in the large scale retail sector and in trading and service firms of a certain size. As was predictable, SMEs account for the most significant exceptions, as they lack the necessary means and know-how. However, questions are beginning to be asked "as to the real effectiveness of dual pricing. It seems that consumers pay little attention to prices in euros". The Committee had foreseen this in its opinion on the Green Paper,(13) had strongly advised against "adopting any measures which imposed dual display of amounts" and had suggested alternative or complementary solutions which would probably be more effective.

2.4. Public administrations and local authorities

2.4.1. Public administrations in general, with one or two significant exceptions, seem to be well advanced in preparing for the transition to the euro; the situation with local authorities appears to be less positive, as they give the impression of having underestimated in many cases the importance and implications of the problem; that at least is the apparent conclusion to be drawn from the Communication(14).

2.4.2. By contrast, the efforts made in terms of communication to the citizens by the Member States and the public administrations - and to some extent by the local authorities - are really considerable. In the light of the previous point, one could be forgiven for thinking that some public authorities are giving priority to those programmes regarded as "easier" and "more popular", i.e. direct communication with citizens/electors, before tackling the more difficult and more technical problems of reorganising their own administration.

3. Communication

3.1. In the entire history of the European Union, no initiative has been the subject of such massive commitment in terms of resources and funds as the adoption of the euro: commitment by all parties - Commission, European Parliament, Member States, European Central Bank, Economic and Social Committee, Committee of the Regions, public administrations and private organisations - has been intense, aware, indefatigable and unstinting as regards funds. There is no similar precedent even in the history of world currencies: in the past, changes of currencies have been a recurring event of which not too much was made, accepted fatalistically as inevitable in economic life: examples are decimalisation of sterling and the switch in Brazil from the cruzado to the real.

3.1.1. The Commission has carried out coordinating work but has also taken the initiative, in many directions. The campaign on the euro - "A single currency for Europe" was launched in 1996 and is still continuing. Over the last two years, 117 million euro have been spent, two-thirds of which through agreements with Member States. Funds have been allocated for preparatory work (publications, conferences, seminars, teaching in schools, etc.); the financial commitment of the Member States is at least equal to the funds allocated by the Commission.

3.1.2. Funds have also been allocated for "multiplier" organisations, for the "Euro Made Easy" programme and for pilot operations in regions and cities. For a more "technical" public, the Commission has organised seminars in the major financial centres and 80 initiatives of various kinds in third countries. All this, in addition to education and training courses and seminars (both general and specifically targeted on "vulnerable" social groups), participation in international fairs, publications, documents, the InfEuro periodical, kits, guides, videos and posters, as well as an Internet site with an interactive data base. One can say that no field of communication has been neglected.

3.1.3. The European Parliament, for its part, has allocated sums for similar activities, including some with a direct commitment on the part of some of its Members, but more often in association with the Commission and the Member States.

3.1.4. The Member States and public administrations, too, have multiplied their general or sectoral initiatives, above all addressed to citizens, firms and disadvantaged groups in the population; at present, there is a lack of precise data on the way the funds have been used, but it is certain that the effort has been general and made with conviction.

3.1.5. The ECB, for its part, prepared the ground impeccably for the transition to the euro in 1999 by the European financial system; as well as setting up the TARGET system, which operated smoothly from the start, it contributed to the formulation of a "euro policy" both in the euro zone and in relation to third countries. Its task was by no means easy - to coordinate the work of the national central banks in preparing coins and banknotes - and this was accompanied by an extremely efficient communication effort. It should be noted that the ESB has earmarked a substantial sum (80 million euro) to publish brochures depicting the new coins and notes.

3.1.6. The Committee has not neglected its duty towards civil society: many ESC members have launched or taken part in information campaigns aimed at the general public and national and international organisations.

3.1.7. Private organisations have responded to the appeal by the Commission and the governments in a knowledgeable and unstinting way. Consumer organisations have carried out their work, as one might expect, with citizens/consumers in general and the more disadvantaged groups, whereas vocational organisations have worked mainly with their members; it is estimated that in practice, all firms have been reached by the communication work channelled to them by their own sectoral organisations. The financial sector (banks, in particular) has informed all its clients and the public in general - through brochures (estimated at a total of 300 million copies), publication of financial results in euro, and with information printed on every piece of paper sent to their customers, repeated at every opportunity. The dual display of amounts is almost universal practice now.

3.2. The results

3.2.1. Inevitably, the sector which has best adapted to the euro is the financial one: having had to adopt the single currency for monetary, financial and stocks transactions from the beginning of 1999, and having the small-scale, but significant, experience of clients opening euro accounts, the conversion of all dealings at the end of 2001 - or even earlier - does not give rise to special problems, except perhaps in terms of volume of work.

3.2.2. On the other hand, as stated above, the muted response from SMEs and citizens/consumers is generally disappointing and in some respects worrying. Surveys by Eurobarometer and private organisations paint a picture in which either no-one knows anything about the euro, or they have forgotten it, or they will provide for it at the "right time", or they doubt whether the euro will really be adopted.

3.3. Lessons to be drawn

3.3.1. Except for the financial sector, which was obliged to adapt itself to the euro, and those who saw immediate advantages in it (above all, large firms and multinationals) it can be said that experience provides the proof of the principle which marketing and communications experts know all too well: they can influence individual patterns of behaviour through communication and other means, but it is virtually impossible to impose choices on people if there is no direct and immediate interest involved.

3.3.2. As far as firms in particular are concerned, the Communication states that "A communication drive is therefore necessary to inform businesses of the exact stage the timetable ... has reached and to impress on them the existence of a 31 December 2001 deadline and the need to speed up their preparations". The Committee takes the view that the "communication drive" should be geared primarily to sectoral organisations, which should make it their business to send a message to businesses, using the content and style with which they are the most familiar. Generally speaking, this message should urge their members to consult the documentation - which is already copious - and to take the necessary steps in good time; otherwise, the consequences will have to be borne by those who fail to meet the deadline. It is the task of the Commission and the Member States to inform trade organisations and keep them updated on the practical arrangements for the change to the euro, but it is these organisations which must forward this information to their members: in other words, the Commission does not consider the use of "European" public funds to finance campaigns directed at business circles to be acceptable. Each Member State must be able to decide - in circumstances which the Committee hopes will be exceptional - to grant financial assistance to the most "needy" national organisations.

3.3.3. As regards citizens/consumers, a calm, balanced analysis must be made, which must not be influenced by extraneous considerations. The Commission(15) notes that "most people have received some information on the single currency but may be forgetting it. After the massive publicity following the launch of the euro ... there were encouraging levels of public interest in, awareness of, and support for the euro. More recent polls suggest that, with some notable exceptions, this has since fallen; and people are tending to forget what they once knew". This confirms a basic principle of mass psychology: a message which is not of direct and immediate interest tends to be ignored or forgotten.

3.3.4. The only group of consumers which appears to have higher than average "euro-awareness" is that of bank customers, particularly those who are more up-to-date (but not necessarily richer). This, too, confirms the validity of the Committee's observations(16) that "companies (especially the banking sector) should clearly be primarily responsible for getting information across on a wide scale, for the obvious reason that only such messages are practical and of direct interest to the consumer."

3.3.5. In brief, the experiment has shown up the failings of purely theory-based assumptions: apart from the predictably meagre results of dual display of prices, the Green Paper's assumption that competition would induce private operators to offer services in euro, resulting in considerable benefits for the consumer, also proved unfounded.

3.3.5.1. The Committee had warned against certain unfounded assessments; in the opinion already cited, it stated that running accounts in euro would be "a mere accounting strategy which might well be useful in familiarising the consumer with the new currency, but would be of no practical use". Only now is it being realised that barely 1 % of consumers have opened accounts in euro. The messages were technically excellent; unfortunately, they ignored the principle set out in point 2.2.1: recommendations fall on deaf ears if consumers see no direct, immediate benefit for themselves.

3.3.6. The idea now is to resume the information campaign with renewed vigour; the Committee strongly recommends that it be limited to the practical and technical arrangements for transition to coins and banknotes in euro, conversion of accounts, cash amounts, etc. without dwelling on other aspects; a few simple concepts are most likely to be retained. Most importantly, the actual event should be "played down": the message must be conveyed that conversion is perfectly accessible to everyone, with a minimum of normal care: separate plans should however be made for the most "vulnerable" sectors of society (the blind, those living in poverty, illiterate or semi-literate people or inhabitants of remote areas), for whom specific measures and messages should be devised.

3.3.6.1. The information campaign should not, however, be "Europe"-driven, but implemented mainly by the Member States: only they are aware of their general environment and the way their citizens think, and can judge the right approach to cope with specific national or local situations. They should take particular care to ensure that the necessary information is conveyed to geographical areas and sectors of society which are hard to reach via mass communication.

3.3.6.2. Another recommendation concerns the implementation timetable: the campaign should be prepared in advance, but launched only towards the last three months of 2001. To start earlier would be once again to run the risk already identified by surveys: information given too early is forgotten.

3.3.6.3. As already argued in the case of businesses, in the area of communication with the general public, public money should be used only if and when spontaneous initiatives by the mass media or private sector do not achieve the aim: the Commission and above all the Member States should have a full picture of the situation in the various sectors - private individuals, companies and public bodies - and should take any measures to "fill the gaps". Hence it is necessary to avoid overlapping and duplication of measures.

3.3.6.4. It is essential that the temptation to combine two messages - one "technical" and the other, on the benefits of the euro, "political" - be resisted. Linkage may be useful in some cases, but it should be left to individual Member States: further confirmation of the need for "national" rather than "European" campaigns (see point 3.3.6.1).

3.3.7. The Committee trusts that, in the preparatory campaigns for practical introduction of the euro, account will be taken of a suggestion which it has repeatedly made but which seems to have gone unheeded: the Committee recommended(17) that information campaigns on the practical aspects of the introduction of the euro should highlight the benefits of extensive use of payment cards which would make conversion calculations automatic and remove the need to calculate change. This aspect should be stressed in all the messages, especially in the banking and commercial sectors: if the calculations seem complicated or one does not have confidence in those made by the other party in the transaction, cards should be used as much as possible.

3.3.8. One consideration, which the Committee regards as not unimportant, concerns the "tone" of the communication: earlier campaigns were based on stressing the advantages of the euro, and encouraging the public to prepare themselves. The approach should change to one based on the urgency and the compulsory nature of the transition to the euro: those to whom the messages are addressed must understand that time is short and that those who do not adapt - by learning and/or taking adequate measures - will run into all the problems associated with being "out of the loop". In short, the principle which applies is "ignorance of the law is no excuse" - a principle of Roman law which underpins all legal systems. A "robust", albeit politely-worded, message, designed to recall the addressees to their duties as citizens towards society while protecting their own interests, is worth more than any number of invitations and exhortations delivered in an almost apologetic tone.

3.3.9. Rounding-off of prices in euros, which may occur especially in countries which are not, or no longer, used to using "cent" denominations in their currency, is an aspect which needs to be looked at. While in a free market vendors retain the ability to set prices, a widespread tendency to round prices upwards may well trigger an increase in inflation, although this should be inhibited by inter-company competition. Companies and consumer organisations should be alerted to this issue, which will also prevent conflict being generated over it.

4. The introduction of the banknotes and coins

4.1. In the Communication the Commission states that the euro coins are more secure than any of the national coins in circulation; the Committee takes note of this, but warns against any complacency: technology is now so far advanced, and the resources available to organised crime are so considerable, that one cannot afford to "lower one's guard". The central banks, the OLAF and Europol are taking protective measures which are already far from being a simple task: although obvious and possibly already catered for, it might be worth recalling the need for coordination with Interpol, since the euro is set to be in wide circulation across the world.

4.2. The Commission adds that it is satisfied with the parameters that enable the coins to be recognised by automatic vending machines. It does not mention the recognisability of banknotes used in machines in a number of countries, particularly in car parks and filling stations. In view of the high value of banknotes in euros and the costly technology for their recognition, it would be desirable for the use of vending machines which accept banknotes to be discouraged. Thus the machines should only accept coins or payment cards.

5. Measures against counterfeiting

5.1. The Committee takes note of the Council Decision of May 2000 on reinforcing protection of the euro(18), which recommended that the Member States lay down effective, proportional and deterrent penalties for counterfeiting the single currency and trafficking counterfeit notes. However, it notes with regret that once again the suggestion for the decision to include similar preventive and repressive measures against counterfeiting and use of alternative forms to cash (cards, cheques or travellers' cheques) has not been taken up(19).

5.2. Given the spread of these means of payment and the likely increase in them with the introduction of the euro (already in some supermarkets in certain countries payment by card constitutes 70 % to 80 % of the daily turnover), it is advisable to protect alternative means of payment through similar measures - albeit proportionately less severe - to those adopted for the cash form of the official currency.

5.2.1. Such measures should be taken both with a view to protecting citizens' interests and - even more so - as part of the effort to combat organised crime. Confining attention to protection of the official currency displays a limited vision of protection of the public interest, confined to the state as such; the interests of society (defence of the citizen and combating organised crime) are equally important, in economic terms but above all in social terms. The Committee trusts that the Commission will take urgent action to ensure that suitable measures are adopted.

5.3. The question of counterfeiting and trafficking in official currency and means of payment comes under the broader heading of combating organised crime, discussed in an earlier Committee opinion(20). The opinion called upon the Member States to take urgent steps to reorganise their structures and regulations to achieve effective coordination of anti-crime action. The Commission has proposed a regulation on the matter, restricted to counterfeiting of euros, but adoption seems to be held up by delays and obstacles which are completely unjustifiable given the urgency and importance of the problem.

6. National cash changeover plans

6.1. The period immediately after 31 December 2001 will perhaps be the most delicate phase of the whole "euro operation" since it involves not just groups who are professionally prepared but also the general public, including sectors of society who cannot be expected to have perfect knowledge of the rules and procedures. Each Member State has taken appropriate measures, which presumably take account of the needs and customs existing in each country.

6.2. As regards advance supplies of banknotes and coins, each Member State has adopted its own policy. In the retail sector and for service companies, especially those located in remote areas, the greatest problem will be having sufficient funds available from the first day to give change in euros to customers, as well as familiarising staff with operations involving the new currency. For the general public, on the other hand, the main question is getting used to recognising the various coins and banknotes; for that purpose it should be enough to look at pictures in the booklets and leaflets already in circulation, or which will be reprinted and distributed at a suitable time. As regards being able to recognise forgeries, it is doubtful whether the ordinary citizen could acquire the necessary skill to distinguish them from genuine currency.

6.3. The sectors which most need to defend themselves against forgeries are the retail and services sectors: they ought to have available to them - from the very start! - low cost, efficient equipment capable of recognising forgeries. It is possible that suitable measures to this end have been adopted or are in the process of being adopted, but the Committee has no information on this.

6.4. Two of the main problems seem to be firstly, that of avoiding the formation of queues at bank counters to acquire the new currency on the first day and secondly, in retailing, where - insofar as is possible - change in euros should be given for payments made in national currency. Here communication must play a decisive role - and it should be remembered that television is the most effective, convincing means, with low cost per contact. The citizen must be informed that the national currency can go on being used without problems for a certain period two months after the changeover (two months almost everywhere):, it would however be useful for him or her to pay into a bank account in December all the cash which is not essential to meet immediate expenditure, although this should not be compulsory. Neither will it be a problem if traders who are temporarily out of euros give customers change in national currency. The message must therefore play down the assumed complications and difficulties, provided that the citizen is prepared to do what is suggested. In this respect, the Committee would redirect attention to its proposal - made on a number of earlier occasions - to convince consumers and trade to adopt the widespread use of electronic means of payment. These are the only means which do not involve conversion calculations with the resulting checks and doubts, or having to give change in cash.

6.5. Currency exchange in banks will be free of charge in "reasonable" quantities, but in this connection it will be worth pointing out that only the national currency can be exchanged free of charge, whereas foreign currencies (banknotes) remain subject to the payment of the costs of handling and return to the relevant countries, under the existing conditions which must not be changed, unless it is to lighten them. It should also be specified that the exchange of foreign coins is not usually provided for, given the excessive cost of their handling in relation to their value. This is only a minor problem for individuals: in some countries publicity campaigns are under way in favour of donating coins to charities or research institutes. Such initiatives should be encouraged everywhere.

6.6. On the problem of exchanging modest - or better, "reasonable" - sums, for people who do not have a bank account, the banking system should make provision free of charge. If approached properly, the question should not give rise to serious problems: those who do not have a bank account are unlikely to hold significant sums. However, the maximum amount must be such as not to facilitate money laundering by organised crime; the latter could take advantage of the opportunity to convert ill-gotten gains through a number of people going to different bank counters and claiming that they do not hold an account.

6.6.1. In contrast to the point made above, it has been noted in some countries that not everyone has a bank (or postal) account, and that many people still hoard large sums of money at home. Since compelling individuals to open bank or postal current or savings accounts is inconceivable, the problem of distinguishing "legitimate" from "illicit" money remains: this can be done by using existing money laundering legislation. In most countries such laws stipulate that the possession of cash sums over certain limits must be justified by clearly-identified persons: any exception to this rule would be to open a door to launderers which the law had already sought to shut. The Committee urges that this rule be applied universally.

6.7. One aspect affecting the practical arrangements for converting paper and metallic money into euro is the logistical one; the general public has little knowledge of the volume of currency involved, the problems of transport, guarding, protection, distribution, collection and destruction of the currencies which are no longer in circulation. The central banks and national banking systems have been seeking for some time to tackle the difficult problems involved, but the Committee has the impression that some of them have not yet been entirely solved. A recommendation of greater diligence seems out of place, and would run the risk of being unfair to the professionalism of those dealing with the matter; however, the Committee thinks it useful to draw attention to the possibility that practical obstacles arising at the last minute may make impracticable some of the measures now regarded as rational and useful.

7. Part II - The Recommendation

7.1. As stated in the introduction, the information and considerations contained in the Communication and the Euro Papers find a logical conclusion in the Recommendation. The Committee has adopted a similar layout, commenting on the various documents in the same order, with a view to clarifying its views and making its viewpoints more comprehensible.

7.2. Article 1. The recommendations in this article (entitled "informing future users") follow the right logic of "capillary penetration" of information, and the Committee can only agree, but would draw attention to various reservations and comments contained in point 3 above. In particular, it recommends relying mainly on sectoral organisations and banks, and secondarily on the Member States and their official institutions, only when this turns out to be indispensable. Given that the campaigns are aimed at national populations and categories, there is no obvious need for the European institutions to be involved. Above all, account should be taken of what has already been spent overall: even without the data, one can say with certainty that no communication campaign has ever involved such high "costs per contact" with such disappointing results.

7.3. Article 2 - "helping citizens to become accustomed to the euro". It is recommended that the Member States ensure, during the third quarter of 2001 at the latest, that the order of display of dual prices be inverted: first a highly visible euro price and then the corresponding price in national currency. The measure is rational, but one should not have too many illusions as to its effectiveness in every case: it will be effective if the consumer already has an account in euro; on the other hand, if he is using national currency (in cash or in his own account), he will in any case have to consult the amount given in that currency. More generally, it is far from certain that this measure will get consumers into the habit of converting amounts: only practice will tell. Shrewder consumers will probably assume this habit, but their "weaker" counterparts must be able to expect help from suppliers.

7.3.1. In the course of the year 2001, public administrations and businesses should pay their employees' wages and salaries in euro, and pensions should also be paid in euro. This could lead some of the employees to start holding their bank accounts in euro - a decision which would in itself be encouraging in terms of creating a familiarity with the new currency. However, the Committee draws attention to one problem: if, as is probable, only some of the employees take this decision, cooperation will be necessary between employers, employees and the banking system to ensure that the amounts to be credited in euro (for those who already have euro accounts) and those to be converted into national currency are identified at the source. Considering the dynamic of the opening of the accounts - which will certainly not all be opened at the same time - the continual updating of the files will be quite a serious administrative burden.

7.3.2. Television could do much more to familiarise the general public with the euro than any official publicity campaign, through game-shows, quizzes etc., provided that efforts are made - as a matter of urgency - to ensure that winnings or potential prizes are always expressed in euros rather than national currency. The same applies to lotteries, betting and so on. This may seem a trivial point, but the intention is perfectly serious, and the Committee is convinced that the matter merits careful consideration.

7.4. Article 3 - "Encouraging economic operators to gain experience in using the euro". It is proposed that at the beginning of the third quarter of 2001, the banking system should, of its own initiative, transform accounts and means of payment into euro unless the customer expressly requests otherwise. Bank statements should show every amount in euro and equivalent amounts in the national currency unit. This is intended to anticipate by at least three months the obligatory transition to the euro - a measure which some of the customers could view favourably. In addition, part of the banking sector could draw an advantage from this since it would dilute the impact of the "big bang" at the end of the year, provided that conversion programmes already adopted allow it. However, this does not seem to be the case for all credit institutions. The Member States should consult the parties concerned and should at all events avoid making this provision a coercive one.

7.4.1. The Committee would also draw attention to the correlation between the provisions of Article 2 and Article 3: should wages continue to be paid in national currency to the end of 2001 - which is probably the case for many firms - the employee would find himself having to count in two currencies if his account was obligatorily converted into euro. The same problem, only the other way round, concerns employees receiving their wages in euro but who have national currency accounts. In principle, it would be best for wages to be paid in euros and accounts to be converted at the same time. This would not be a straightforward operation, and would have to be accomplished following consultation with the interested parties: trade unions, consumers and banks.

7.5. Article 4 - "reducing the flow of transactions to be converted into euro". This article is fully endorsed by the Committee: contracts and the registered capital of new firms should all be expressed in euro, above all - and indeed obligatorily - if their validity extends beyond 31 December 2001. Similar measures should be taken with regard to employment contracts between the social partners. The Committee has already given a favourable view on the suggestion to ask customers to deposit in banks in December all the cash which they do not immediately need(21).

7.5.1. An additional measure, designed to reduce the flow of operations to be converted into euro, could be the adoption of a provision which has long been adopted by certain Member States for other purposes: a ban on paying salaries and pensions in cash, instead making payments into bank or postal accounts. Apart from the benefit in terms of conversion into euro, this would diminish the incentive for robbing people and banks or post offices and would in addition combat the problem of undeclared labour. Some voices have been raised against making such a measure compulsory, although it does not seem to have caused problems in a range of countries. The Committee believes that if it is decided not to impose any obligation, then at least every possible disincentive should put in the path of paying salaries and pensions in cash.

7.6. Article 5 - "facilitating the cash changeover to the euro". The measures provided for in this article have been commented on in point 6 above. The Committee agrees, but draws attention to possible obstacles of a logistical nature (point 6.7), to the need to prevent money laundering (point 6.6), and to safeguarding against fraud and forgery (points 5.2 and 6.2). It is worth pointing out in this connection that replacing cash with fiduciary money (payment cards in particular) is already being advocated by the commercial sector, independently of the changeover to the euro: consumers are specifically asked to use cards each time strikes are called by cash-in-transit personnel, but reducing cash stocks is in any case necessary, even under normal conditions.

8. Conclusions

8.1. The Committee agrees that a further multimedia information campaign, principally via television, is necessary for the changeover from national currencies to the euro, but it recommends that this be done in good time, with as little public expenditure as possible and, above all, with a minimal contribution from Community funds: in practical terms, each country is responsible for its own communication policy.

8.2. Similarly, the "political" message on the advantages of the euro and its benefits for Europe must be left up to national authorities, who alone can judge whether and how to transmit the message in the light of their citizens' feelings.

8.3. The practical problems arising from the introduction of the single currency are numerous, but should not be exaggerated, either in practice or in messages directed to the public. The general public should help by taking on board the recommendations: not keeping or changing large sums in cash, avoiding queues to obtain new cash, opening bank or postal accounts where they have not yet done so, and using payment cards whenever possible.

8.4. The bank and retail sectors will have a key role to play: banks in changing the currency in which accounts are held and transactions effected and, in logistical terms, storing and distributing the new currency; and retail outlets in taking national currency from customers, paying it into banks and, where necessary, giving change in euros. This raises issues of prior supply of coins and notes with the ensuing problems of logistics, security and calculation of interest.

8.5. The Committee intends to make no comments on this aspect, realising that it is a matter for the national authorities and is the subject of delicate negotiations. Logistical problems must be resolved by those responsible and mindful of the duration of dual circulation of new and old currency. Here, the Committee would emphasise that the logistical problems are all the greater in that the period of dual circulation will be short.

Brussels, 29 March 2001.

The President

of the Economic and Social Committee

Göke Frerichs

(1) COM(2000) 443 final.

(2) No 38 and No 41 of August 2000.

(3) OJ C 18, 22.1.1996, p. 112.

(4) OJ C 56, 24.2.1997, p. 65.

(5) OJ C 73, 9.3.1998, p. 130.

(6) See point 1 (a) of the Communication.

(7) OJ C 18, 22.1.1996, p. 112, point 6.5.1.

(8) OJ C 18, 22.1.1996, p. 112, point 5.3.4.

(9) See the Commission's Euro Paper No. 38 of August 2000, point 2 (page 5 of the English-language version).

(10) Point 2a.

(11) Euro Paper No 38.

(12) Point 2b.

(13) OJ C 18, 22.1.1996, p. 112, point 6.1.5.

(14) Chapter B, 2a.

(15) Euro Paper No 38, point 2.2, p. 10.

(16) OJ C 18, 22.1.1996, p. 112, point 8.2.3.

(17) OJ C 73, 9.3.1998, p. 130, points 5.4 and 5.4.1.

(18) See also the steps to establish a Steering Group and a common interinstitutional strategy for the protection of the euro (Europol/European Central Bank Joint Press Release, 24.3.2001).

(19) OJ C 18, 22.1.1996, p. 112, points 7.13 and 7.14.

(20) OJ C 268, 19.9.2000, p. 48.

(21) See point 6.4 above.