WRITTEN QUESTION E-2645/01

by Luciana Sbarbati (ELDR) to the Commission

(28 September 2001)

Subject: Euro and consumers

The euro will enter into use in 2002. The new currency will, as a result of its fixed exchange rate, lead to adjustments in the prices of a wide range of goods and, above all, services. To avoid having to deal with cents, which are no longer used in certain countries, prices will be rounded up. This will be to the detriment of consumers and will lead to a rise in inflation. The Commission cannot afford to ignore this fact.

Line B5-10 of the EU budget provides for activities to promote and protect consumer interests. Given that one of the aims of this appropriation is to guarantee a high, uniform level of consumer protection, will the Commission state what countermeasures will be taken to avoid such problems and what checks will be made to discourage such practices?

Answer given by Mr Byrne on behalf of the Commission

(16 November 2001)

Two European Regulations(1) lay down the rules for conversion and rounding(2), and establish a principle of continuity of contracts. Where the prices of goods and services are concerned, some businesses will be forced to round their prices up or down in order to ensure that the new prices in euro retain their psychological effect, or simply to adapt prices to market conditions, fluctuations in the costs of raw materials, etc. Freedom of pricing and competition is the basic principle behind the Internal Market. The notion of psychological pricing in euro, however, varies from sector to sector and from Member State to Member State.

To enable consumers to benefit fully from competition and to promote value for money, the Commission has focused upon education and information so that everyone can get a feel for the new prices in euro and new scales of values. The Commission has also encouraged dialogue between consumers and the distribution industry. One result of this dialogue has been the Eurologo voluntary agreement, based on good practice and a commitment to stable pricing during the changeover to the euro. This agreement has been introduced at national level in most Member States in the euro zone.

By signing this agreement, representatives of European businesses have undertaken to make increasing use of dual price displays as the changeover approaches, and to promote overall price stability during the last few months of 2001 and the first few months of 2002, in order to maintain confidence levels and to make it easier for consumers to find their bearings. Several major companies in the euro zone have already made these commitments and most shops in the participating Member States are using dual pricing. This trend is becoming more widespread as the deadline approaches.

Dual pricing allows consumers and, where appropriate, specialised national or regional control bodies to check that there are no hidden price rises during the changeover to the euro. It was with this in mind that the Commission also advocated the setting up of local observatories for monitoring the introduction of the euro (Article 2 in particular of Recommendation 98/288/EC of 23 April 1998(3)), something which has been done in most euro zone Member States.

As far as education is concerned, the Prince programme, cofinanced by the Parliament, provides Community funding for information campaigns. Moreover, the Commission has this year set aside an additional budget of 2 896 000 under budget heading B5-10 to finance information campaigns and consumer education (including the Euro made easy scheme).

Member States and the Commission are also exchanging information on how to get used to the new scales of values and, particularly, to the existence of cents.

(1) Council Regulation (EC) No 1103/97 of 17 June 1997 on certain provisions relating to the introduction of the euro (OJ L 162, 19.6.1997) and Council Regulation (EC) No 974/98 of 3 May 1998 on the introduction of the euro (OJ L 139, 11.5.1998).

(2) Council Regulation (EC) No 1103/97 of 17 June 1997 Article 5: Monetary amounts to be paid or accounted for when a rounding takes place after a conversion into the euro unit pursuant to Article 4 shall be rounded up or down to the nearest cent. Monetary amounts to be paid or accounted for which are converted into a national currency unit shall be rounded up or down to the nearest sub-unit or in the absence of a sub-unit to the nearest unit, or according to national law or practice to a multiple or fraction of the sub-unit or unit of the national currency unit. If the application of the conversion rate gives a result which is exactly half-way, the sum shall be rounded up.

(3) OJ L 130, 1.5.1998.