WRITTEN QUESTION E-4066/00 by Erik Meijer (GUE/NGL) to the Commission. Price increases as a result of the introduction of the euro and of rounding up when converting old prices.
Date: 2001-01-10
Institutions: European Parliament, Provisional data
Subjects: euro, price control, price fluctuation, price increase, prices policy, publishing of prices

3.7.2001

EN

Official Journal of the European Communities

C 187 E/125

Answer given by Mr Wallstr(cid:246)m on behalf of the Commission

(28 February 2001)

The case raised by the Honourable Member has been dealt with by the Commission in the framework of
petition no 238/99. This petition has been last discussed during the meeting of the Committee on Petitions
of the Parliament on 23 May 2000. No infringement of Community legislation on nature conservation had
been identified at the time and the case was consequently closed.

The information given by the Honourable Member does not include any new elements that would justify
the Commission changing its earlier analysis.

(2001/C 187 E/132)

WRITTEN QUESTION E-4066/00

by Erik Meijer (GUE/NGL) to the Commission

(10 January 2001)

Subject: Price increases as a result of the introduction of the euro and of rounding up when converting old

prices

According to a study carried out by the Faculty of Economics at the Erasmus University in Rotterdam,
prices for everyday purchases will rise on 1 January 2002 or shortly after by between 5 % and 10 %. Prices
for cars and houses will also rise. The reason for this is that salespeople always use round figures, such as
100, 99,9 or 99,5. Every time the old national currency is converted into euros, they can achieve this by
rounding the price either down or up. It is expected that in nearly every case they will do the latter.
Salespeople nearly always will add something to the old price in order to arrive at an eye-catching amount.

In the light of this:

1. Does the Commission have information from other studies which confirm the results of the Dutch

study?

2. Does the Commission have information from other studies which would contradict this conclusion? If
so, what arguments are used by these studies to conclude that no major price rise above the annual
norm can be expected?

3. What does the Commission propose to do, in cooperation with the national authorities of the 12
Member States concerned, to counteract the emergence of a price discrepancy in the first half of 2002,
e.g. by laying down rules on the rounding up or down of prices to ensure that average prices remain
stable?

4. How does the Commission propose to prevent unusual price increases occurring during 2001 by way

of an advance on rounded-up euro prices in 2002?

5. Has the Commission already developed ideas on what should happen if an abnormal price increase
cannot be avoided? What provision will be made in that case for compensation in terms of pay and
allowances so as to maintain the purchasing power of the great majority of people who are dependent
on these sources of income?

Source: The Dutch newspapers (cid:145)De Telegraaf(cid:146) and (cid:145)Rotterdams Dagblad(cid:146) of 7 December 2000.

Answer given by Mr Solbes Mira on behalf of the Commission

(27 February 2001)

The Commission is not aware of any economic study on the matter. The authors of the Dutch study

1.
have, in any case, formally challenged the way in which their conclusions were presented in the press.

C 187 E/126

Official Journal of the European Communities

EN

3.7.2001

Competitive pressures among supermarket chains and the like will oblige the leading players to
2.
arrange the changeover to euro pricing so that consumers do not suffer. Similarly, local shops, which
benefit from customer confidence, will do their utmost to ensure that their customers cannot accuse them
of raising prices unexpectedly and do not abandon them for supermarkets. Several market leaders in
a number of countries in the euro area are even planning to freeze prices for several months at the end of
2001 and the beginning of 2002. Also, a majority of shops in the participating Member States already
practise dual pricing and their numbers will increase steadily as the different deadlines approach. Under the
auspices of the Commission, an agreement has been reached between consumers and businesses on use of
the (cid:145)euro logo(cid:146) with a view to promoting voluntary dual pricing and application of best practices. The
agreement is in force in most Member States in the euro area.

Dual pricing allows consumers and, where appropriate, specialised national or regional control bodies to
check that there are no hidden price rises on the occasion of 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 98/228/EC of 23 April 1998 (1)),
something which has been done in most Member States in the euro area.

Lastly, the early setting of euro prices in the third quarter of this year, called for by the Commission in its
Recommendation of 11 October 2000 (2), will also help to achieve this same objective. The problem, if
there is one, would probably, therefore, be confined to the sectors with little exposure to competition
where some shops would not introduce dual pricing.

The freedom to set prices is a basic principle underlying the operation of the single market. By
3.
contrast, the rounding rules for conversion from national currency units to the euro are laid down in
Council Regulation (EC) No 1103/97 of 17 June 1997 on certain provisions relating to the introduction of
the euro and are mandatory. Businesses must, therefore, comply with the rounding rules when applying
dual pricing. Together with the signatories to the (cid:145)euro logo(cid:146) agreement, the Commission is looking into
ways of reinforcing the agreement as regards overall price stability along the lines of the rules in force in
Spain and Ireland. Measures permitting rapid monitoring of price changes in early 2002 will also be
examined with the Member States.

Any price adjustments will primarily affect, on a one-off basis, products and services for which
4.
(cid:145)psychological(cid:146)
(or round) prices are set. New (cid:145)psychological(cid:146) prices in euros may involve upward or
downward adjustments. There are no grounds at present for claiming that there will be a uniform upward
adjustment. Historical precedents (e.g.
the pound sterling) did not produce
the decimalisation of
a significant upward movement in prices.

5.
The Commission does not believe that such a risk exists. If there is a short-lived increase in prices,
something which the explanations given above and surveys among sectoral associations would seem to
rule out, it will be very small, with any upward adjustments being statistically offset by any downward
adjustments. There would not, therefore, be any inflationary movement, this being defined as a continuous
rise in all prices. Accordingly,
it is unlikely that such a cyclical adjustment in prices could jeopardise
individuals(cid:146) purchasing power.

(1) OJ L 130, 1.5.1998.
(2) OJ C 303, 24.10.2000.

(2001/C 187 E/133)

WRITTEN QUESTION P-4070/00

by James Fitzsimons (UEN) to the Commission

(20 December 2000)

Subject: VAT on solar panels and encouraging greater use of vegetable oils for fuels

As a means of promoting environmentally friendly technologies, does the Commission have any plans to
bring forward special proposals aimed at introducing either a zero rate of VAT for solar panels or