EN Official Journal of the European Union CE 84/114

(2004/C 84 E/0150)

WRITTEN QUESTION E-3906/03

by Roberta Angelilli (UEN) to the Commission

(17 December 2003)

Subject: Single currency and cost-of-living increases

While marking a real step forward in the process of further stepping up economic and financial interaction within the EU, the introduction of the single currency has also led to a significant increase in prices. This assertion is borne out in Italy by the findings of a large number of surveys conducted by authoritative statistical institutes (including ISTAT) and by detailed investigations conducted by the Guardia di Finanza. The same situation is also to be found in all the other EU Member States, although to differing degrees. With a view to combating the prices increase the Italian Government has taken a number of significant steps, including the establishment of a fund of EUR 5 million in 2003 and EUR 20 million in 2004 to finance measures instigated by municipal authorities and chambers of commerce, by common accord, with a view to promoting and supporting the drawing up of lists of everyday consumer goods and providing the general public, including via the Internet, with lists of commercial outlets at which all or some of those goods are available, indicating how attractive they are in terms of price. In his capacity as President-in-Office of the Ecofin Council, the Italian Finance Minister, Mr Tremonti, has proposed that the current EUR 1 and EUR 2 coins be replaced with banknotes. The ECB's response to this proposal, which has the support of many Member States, including France, has been extremely cautious. The bank has dampened enthusiasm by pointing out that, even with the best will in the world, new euro banknotes could not be introduced before the start of the second stage in the euro's production, in three years time.

Given the above, would the Commission state:

1. whether any Community policies aimed at countering the current inflationary trend, which is more pronounced than expected, are currently in place?

2. whether there are any examples of good practice in this area?

3. whether any European programmes and funding schemes have been established or are planned with a view to assisting public institutions, local authorities and consumer associations to combat the price rises?

4. what it is doing to ensure that the EU public is aware of and understands the present situation?

5. whether, given that various surveys have shown that a large majority of European citizens would support the replacement of some euro coins with banknotes, it would be willing to argue the case in front of the ECB and the competent Community institutions?

6. whether a firm date has been set for the issue of EUR 1 and EUR 2 banknotes?

Answer given by Mr Solbes Mira on behalf of the Commission

(30 January 2004)

1. and 2. The Commission would like to recall to mind that the European Central Bank (ECB) is responsible for maintaining price stability in the euro area as a whole, while it is up to the Member States to address national inflation developments that are deemed to be unwarranted. The latest data available indicate that consumer price inflation, as measured by the Harmonized Index of Consumer Prices (HICP), stood at 2,2 % for the euro area as a whole between November 2002 and November 2003. In Italy, the annual rate of HICP inflation stood at 2,8 % in November 2003 which is the third highest rate among the Member States. While these figures are somewhat higher than expected a few months ago, the latest Economic Forecast by the Commission indicates that inflation will fall gradually over the course of 2004. One should also bear in mind the sizable differences experienced between actual and perceived inflation in several Member States after the euro cash changeover when addressing the issue of inflation and possible effects from this changeover.

3. The Commission, within the terms indicated in the EC Treaty (Article 153), contributes to protecting the economic interests of consumers and to promoting the effective enforcement of consumer protection rules. However, the measures undertaken with these aims, though they may have an impact on the prices of goods and services, cannot be considered from the point of view of the maintaining of price stability, which is a task of the ECB, as mentioned above. Referring directly to the introduction of the euro notes and coins, the Commission promoted a number of initiatives aimed at preparing consumers to better manage the changeover to the new currency. Special attention was paid to disfavoured people (the elderly, the disabled, people living in peripheral regions, etc.). Within the programme ‘Euro Made Easy’, specific schemes were funded with a view to assisting public authorities and consumer associations to anticipate possible problems linked with the introduction of the new notes and coins. These initiatives were helpful for the success of the changeover to the new currency.

4. Both the Commission and the ECB review the current state of the euro area economy on a permanent basis. In addition to standard surveys of the real and nominal aspects of the economy, these also include more in-depth studies on ad-hoc topics to highlight current fields of special interest, such as euro area inflation and inflation perceptions.

5. The latest Eurobarometer survey (published on 15 December 2003) indicates that only a minority (31 %) of euro area citizens is in favour of a EUR 1 banknote. Support for such a banknote mainly originates from two Member States, where a majority (70 % in Greece, 76 % in Italy), would welcome the introduction of a EUR 1 banknote. However, in the 10 other euro-area Member States, there is a clear majority (exceeding 60 % in all cases and even reaching almost 90 % in a number of Member States) against the introduction of such an additional banknote.