WRITTEN QUESTION E-1195/02

by Erik Meijer (GUE/NGL) to the Commission

(26 April 2002)

Subject: Consequences of introduction of the euro: increase in consumption and in individual bank accounts showing a deficit

1. Is the Commission aware that, since the introduction of the euro, many consumers in the Netherlands have been spending substantially more money, thereby running the risk of exceeding their income and seeing their bank accounts go into the red, and that this is due not only to the intervening price rises but also to the fact that the higher value of the euro makes prices appear lower than in the recent past?

2. Is this phenomenon reflected to the same extent in consumer behaviour in all of the twelve countries in the euro zone, or are there noticeable differences, particularly, for instance, between the group of countries where the old currency was worth less than ten euro cents or even less than one euro cent (Austria, Belgium, Luxembourg, Spain, Portugal, Greece and Italy), the group of countries where the euro is worth between two and seven times the value of the old currency (France, Finland, the Netherlands and Germany) and the Republic of Ireland, where the old unit of currency had a significantly higher value than today's euro?

3. What steps have been taken to date to advise consumers concerning the new threat of overspending faced by them? Are these measures being prepared and implemented only at Member State level, or have the Commission or the European Central Bank also prepared such measures?

4. What additional measures does the Commission believe need to be taken during the remaining months of 2002 in order to ensure that people have a realistic picture of their purchasing power following the introduction of the euro?

5. Is the Commission holding discussions on this matter with Member States whose governments are considering introducing the euro in future and, where appropriate, with applicant countries undertaking to do the same? What lessons are being drawn from the problems that have occurred in connection with the introduction of the euro in the twelve countries?

Reply given by Mr Solbes Mira on behalf of the Commission

(19 June 2002)

1., 2., 3. and 4. The Commission does not yet have statistics illustrating a hypothetical increase in high indebtedness resulting from the introduction of the euro as legal tender. However, it would point out that the near-universal practice of dual pricing during the first few months of 2002 was designed to reduce the risk of faulty estimation of price levels by vulnerable households. In its recommendation of 11 October 2000(1), it called for increased use of dual pricing in euros as of the beginning of the third quarter of 2001, so as to enable consumers to accustom themselves gradually to the new prices.

Moreover, the figures published by Eurostat on trends in the harmonised consumer price index in the Member States which have changed over to the euro a vital indicator which enables consumers to chart changes in their purchasing power do not support the hypothesis of a widespread price hike resulting from the introduction of the euro as legal tender; the euro effect is estimated at between 0 and 0,16 percentage points (quarter on quarter).

5. Measures to inform consumers in future Member States planning to introduce the euro will be discussed with the countries concerned once a political decision has been taken to adopt it.

(1) Commission Recommendation of 11 October 2000 on measures to facilitate the preparation of economic operators for the changeover to the euro, OJ C 303, 24.10.2000.