Communication from the Commission to the European Council - Review of the introduction of Euro notes and coins
Date: 2002-03-06
Institutions: European Commission
Subjects: euro, paper money, project evaluation, single monetary policy

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 6.3.2002
COM(2002) 124 final

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN COUNCIL

Review of the introduction of euro notes and coins

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN COUNCIL

Review of the introduction of euro notes and coins

Contents

1.

2.

Introduction: the changeover to the euro: a great success..................................... 4

The operations ............................................................................................................ 5

2.1.

Frontloading and sub-frontloading operations ............................................................. 5

2.1.1.

Frontloading of banks .................................................................................................. 5

2.1.2.

Sub-frontloading of sales outlets.................................................................................. 7

2.1.3.

Frontloading of the public with coins .......................................................................... 8

2.1.4. Overall assessment of frontloading.............................................................................. 9

2.2.

Distribution of notes and coins in January 2002.......................................................... 9

2.2.1.

Supply of notes via ATMs ......................................................................................... 10

2.2.2. Cash withdrawals or exchanges at bank and post office counters ............................. 10

2.2.3. Giving of change by traders ....................................................................................... 11

2.3.

2.4.

3.

3.1.

3.2.

3.3.

3.4.

3.5.

3.6.

4.

4.1.

4.2.

4.3.

5.

Use of the euro for cash payments ............................................................................. 11

Recovery of legacy currencies ................................................................................... 12

Other matters associated with the introduction of euro notes and coins............ 14

Price stability on the occasion of the changeover to the euro .................................... 14

Security of operations ................................................................................................ 15

Production quality of notes and coins ........................................................................ 15

Counterfeiting ............................................................................................................ 16

Conversion of vending machines ............................................................................... 16

Physical introduction of the euro in third countries ................................................... 17

Public reactions to the euro..................................................................................... 17

Assessment of the effectiveness of the preparations for the introduction of the euro 18

Public confidence in handling euros .......................................................................... 18

Overall assessment by the public of the changeover to the euro ............................... 20

Preparation of SMEs for the euro .......................................................................... 21

5.1.

Degree of preparation of SMEs on 1 January 2002 ................................................... 22

2

5.2.

5.3.

6.

Practical difficulties encountered in switching to the euro ........................................ 22

Overall assessment of their changeover to the euro................................................... 23

Annex ......................................................................................................................... 23

3

1.  INTRODUCTION: THE CHANGEOVER TO THE EURO: A GREAT SUCCESS

The introduction of euro notes and coins was the largest-ever currency-changeover operation.
Europe  showed  that  it  was  up  to  the  task  and  was  able  to  meet  the  difficult  challenge  of
ensuring  a  smooth  transition.  The  participating  countries  produced  15 billion  notes  and
51 billion coins and then distributed in the first few weeks of 2002 some 8 billion notes and
38 billion coins  to  218 000  banks  and  post  offices,  2.8 million  sales  outlets  and  302 million
individuals in twelve  different countries. They  also  had  to  withdraw  in  a  matter  of  weeks  a
large proportion of the 9 billion national notes and 107 billion national coins in circulation.

This  major  success  is  due  to  the  quality  and  extremely  thorough  nature  of  the  preparations
made  by  the  participating  Member States,  the  European  institutions  (the  European  Central
Bank and the European Commission), the national central banks, financial institutions, sales
outlets, the police and cash-transport firms and to the active and enthusiastic participation of
the  public,  without  which  this  operation  and  the  rapid  distribution  of  euros  would  not  have
been  possible.  The  public  in  Europe  have  accepted  their  new  currency  rapidly  and
enthusiastically,  purchasing  the  mini-kits  of  coins  on  a  massive  scale  before  1 January  and
flocking  early  on  to  cash  dispensers  and  banks  to  obtain  euro  notes.  From  the  training  of
payout-desk staff to the special programmes for the vulnerable groups in society, preparations
were  systematic  in  all  areas.  The  national  finance  ministers  have  played  a  key  role  in
supporting  and  encouraging  economic  actors.  The  European  Central  Bank  has  effectively
coordinated  the  measures  taken  by  the  national  central  banks.  For  its  part,  the  Commission
has  been  instrumental  throughout  in  fostering  and  coordinating  action  taken  by  the
participating  countries  by  providing  guidance  on  the  preparations  in  the  form  of
recommendations  and  proposals  (in  particular,  the  recommendation  of  11 October 2000  and
the  communications  of  3 April  and  10 October 2001)1  and  by  organising  the  work  of  the
networks  comprising  the  heads  of  the  national  administration  task  forces  and  the
communication directors in the finance ministries. For the entire period of the changeover, the
Commission has also acted as a central information point operating via the European Quick
Alert Network it set up.

As  preparation  and  back-up  for  this  operation,  communication  campaigns  of  exceptional
duration and scale have been conducted. The aggregate budget over the period 1996-2001 for
the national information campaigns, which the Commission has helped finance, amounted to
€321 million  (or  €1.05  per  inhabitant).  The  Eurosystem  has  also  undertaken  an  extensive
campaign  costing  €80 million.  If  the  preparations  made  by  banks  and  trade  associations  are
included, more than half a billion euros have been spent in total on informing individuals and
economic actors.

These huge efforts on the part of all the economic and institutional actors involved have paid
off:  the  transition  to  the  euro  has  gone  smoothly.  The  change  in  currency  has  taken  place
more  rapidly  than  initially  expected  (in  1999  the  Council  had  set  itself  the  objective  of
completing the bulk of the exercise within fifteen days) but in line with the forecasts made by
the Commission in its communication of October 2001: euro payments accounted for most of
the cash payments that had been made by the end of the first week in January; by the end of
the second week, very little national currency remained in circulation.

1 C(2000) 2985, COM(2001) 190 and COM (2001) 561 respectively.

4

                                                
Ten years after the signing of the Maastricht Treaty, the euro has firmly taken its place in the
daily lives of the public. The success of the changeover to the euro illustrates the ability of the
institutions to bring to fruition a complex project and sends out an optimistic message for the
continuation  of  the  construction  of  Europe.  It  is  also  a  valuable  source  of  experience  for
would-be  participating  countries,  where  fresh  impetus  has  been  imparted  to  the  debate  on
membership  of  the  euro  area.  The  purpose  of  this  communication  is  to  review  in  detail  the
physical introduction of the euro and to summarise the findings of the Eurobarometer surveys
into how the change of currency has been perceived by individuals and firms. The following
points will be examined in turn:

-

-

-

-

the actual introduction of notes and coins;

related  matters  (price  stability,  counterfeiting,  production  quality,  security  measures  and
conversion of coin-operated machines);

the reactions of individuals to euro notes and coins;

the changeover preparations made by SMEs.

2.  THE OPERATIONS

Four aspects of the changeover merit special attention:

-

-

-

-

frontloading and sub-frontloading operations;

the speed and channels of distribution of the new currency in the first few days of 2002;

the growing use of the euro for cash payments;

the withdrawal of the old national currencies ("legacy" currencies).

2.1. Frontloading and sub-frontloading operations

The  rules  laid  down  at  European  level  authorised  the  frontloading  of  banks  and  the
sub-frontloading  of  sales  outlets  as  of  September 2001  and  the  frontloading  of  individuals
with euro coins as from  the  middle of December. Each participating country was,  however,
free to decide within this time frame the actual date on which the operations would begin.

2.1.1.  Frontloading of banks

The frontloading of banks went smoothly. Overall, the volume of notes and coins frontloaded
was in line with forecasts. Starting in September, commercial banks (and, in some cases, post
offices)  in  Belgium,  Ireland,  France,  Italy  and  Portugal  received  euro  coins,  while  their
counterparts  in  Germany,  Spain,  Luxembourg,  Austria  and  Finland  received  both  notes  and
coins. Portuguese banks received notes as of October, the starting date also for the distribution
of notes and coins in Greece. Belgian,  Spanish,  Irish  and  Italian  banks  received  notes  as  of
November, while French and Dutch banks2 received them in December.

2 Dutch banks could though receive notes earlier if they so requested, as could banks and large sales outlets in

France.

5

                                                
According  to  the  European  Central  Bank,  banks  had  received  a  total  of  132.1 billion  euro
notes by 31 December, equivalent to 21% of total production and to 67% of the value of notes
in  circulation.3  These  averages  do  though  conceal  very  wide  variations:  orders  placed  by
banks  were  quite  substantial  in  some  countries  (e.g.  Greece,  Ireland  and  Austria)  and
relatively modest in other countries (e.g. France, Spain and the Netherlands), as the two tables
below show. Supplies of notes were sufficient to meet virtually all the orders placed.

100

80

60

40

20

0

45
40
35
30
25
20
15
10
5
0

B

D EL E

F IRL

I

L NL A

P FIN

Frontloading of banks as %
of notes in circulation

Frontloading of banks with
notes as % of production

B

D

EL

E

F

IRL

IT

L

NL

A

P

FIN

Proportionally, the frontloading of banks with coins  was on  a much larger scale  than  in  the
case of notes: between September and December financial institutions received the equivalent
of  73%  of  total  production  (in  volume  terms)  and  96.3%  of  the  coins  in  circulation  in
mid-January.4  The  differences  between  participating  countries  were  less  marked.  Generally
speaking, the orders placed by banks were met without any difficulty.

3 As a percentage of the value of notes in circulation on 15 January 2002.
4 Source: ECB.

6

                                                
120

100

80

60

40

20

0

90
80
70
60
50
40
30
20
10
0

B

D EL E

F IRL

I

L NL A

P FIN

Frontloading of banks with coins
as % of circulation

Frontloading of banks with
coins as % of production

B

D

EL

E

F

IRL

I

L

NL

A

P

FIN

2.1.2.  Sub-frontloading of sales outlets

The  sub-frontloading  of  sales  outlets  with  notes  began  in  September  in  Germany,
Luxembourg and Austria, in November in Ireland and in December in the other participating
countries (although  coins were  available in  September in  Ireland, in October in  Italy and in
November in Greece). The opportunity given by the European Central Bank to sales outlets to
be sub-frontloaded with small quantities as of September so that their payout-desk staff could
receive training was not widely taken up, perhaps because of a lack of publicity.

As  previously  indicated  by  the  Commission  in  its  communication  of  10 October 2001,5
participation  by  the  2.8 million  sales  outlets  in  the  euro  area  in  sub-frontloading  operations
was  generally  very  uneven.  The  main  reasons  for  this  were  the  lack  in  many  cases  of  any
incentives  to  take  part  and  the  imposition  in  some  countries  of  disproportionately  heavy
penalties for the loss or early circulation of notes. On average, the banks sub-frontloaded only
9%  (in  value  terms)  of  the  notes  they  received.6  It  is  interesting  to  note  that,  Luxembourg
apart, the participating countries with the best results were those that offered incentives and/or
took  steps  to  alleviate  logistical  constraints  (e.g.  Germany,  Ireland,  the  Netherlands  and
Austria).7  The  total  number  of  sub-frontloaded  sales  outlets  varied  enormously  between

5 COM (2001) 561 final: Second report on the preparations for the introduction of euro notes and coins.
6 Source: ECB. It should be noted that in some countries a  number of large distributors  received  their  euros

from the national central bank direct.

7 The Eurosystem does not possess data on sub-frontloading with notes in France or on sub-frontloading with

coins in France, Spain, Ireland and Portugal.

7

                                                
participating countries: while virtually all traders were sub-frontloaded in Ireland, the figure
for Dutch traders was just under 90% and that for Italian traders below 10%.

30

25

20

15

10

5

0

60

50

40

30

20

10

0

B

D GR SP IRL IT

L NL A PT FIN

Sub-frontloading as % of
notes received by banks

Sub-frontloading as % of coins
received by banks

B

D

EL

I

L

NL

A

FIN

Overall,  the  results  are  slightly  better  for  coins,  with  banks  sub-frontloading  on  average  a
significant  proportion  of  the  coins  held,  although  the  situation  differed  markedly  between
countries.

2.1.3.  Frontloading of the public with coins

Small kits containing coins worth on average €10.71 (ranging from €3.88 in Finland to €15.25
in France) were put on sale in mid-December in all participating countries. This was the first
time the general public had been able to get their hands on the euro and they did so with great
enthusiasm  in  all  the  participating  countries.  The  rush  when  banks,  post  offices  and  other
points of sale opened was such that two thirds of the kits had been sold in under a week and in
some countries the kits were sold out within 48 hours.

8

60

50

40

30

20

10

0

kits produced (millions)

kits sold (millions)

B D EL E

F IRL I

L NL A P FIN

Individuals in Europe bought in all 150 329 000 kits totalling 4 280 585 000 coins (an average
of 14 coins per person) worth €1.65 billion. The total number of kits sold accounted for 11%
of  the  euro  coins  in  circulation  at  the  end  of  January.  In  a  number  of  countries  (including
Germany, Portugal, Finland and Luxembourg) demand was such that banks were authorised
to make up their own kits and even to sell some of their stock in bulk. Overall, therefore, the
results as regards the sale of kits were very satisfactory. In aggregate, 150 million out of the
192 million kits available were sold, giving an average figure of 78%.

Contrary  to  the  fears  expressed  in  certain  quarters,  it  is  interesting  to  note  that,  apart  from
isolated cases involving vending machines, individuals fully complied with the ban on using
coins  before  1 January 2002.  Only  77  attempts  to  use  euro  notes  and  coins  were  recorded
before 1 January 2002, an infinitesimal number compared with the billions of notes and coins
distributed.

2.1.4.  Overall assessment of frontloading

According to the ECB, frontloading operations distributed in advance 6 billion notes (40% of
production) worth more than €132 billion and 37.5 billion coins (73.5% of production) worth
€12.4 billion.

These figures are even more striking when expressed as a percentage of the quantity of euros
in circulation at the beginning of February 2002: in volume terms, 80% of the notes and 97%
of the coins used by that date had, on average, been frontloaded by January.

The success of frontloading made a decisive contribution to the rapid take-up of the euro at
the beginning of 2002.

2.2. Distribution of notes and coins in January 2002

The new currency was distributed in three main ways:8

- via withdrawals from automated teller machines (ATMs);

- via withdrawals at financial institutions (bank and post office counters);

8 Other possibilities included the weekly payment in cash of social security benefits in Ireland and the payment

in cash of retirement pensions in Italy.

9

                                                
- via change given in sales outlets.

2.2.1.  Supply of notes via ATMs

On average, 80% of ATMs had been converted to the euro by 1 January. The technical side of
the operation went very smoothly.9 The rate of conversion was rapid throughout the euro area,
climbing on average from 90% on 2 January to 97% on 3 January. By 4 January virtually all
ATMs  were  dispensing  only  euros.  In  many  cases,  machines  that  had  not  been  converted
continued to dispense the legacy currencies during the first few days, making it briefly more
difficult for sales outlets to give change in euros. This was particularly so in Italy and Finland.

100
90
80
70
60
50
40
30
20
10
0

Conversion rate of ATMs on
1 January

Conversion rate of ATMs on
2 January

Conversion rate of ATMs on
3 January

B D EL E F IRL I

L NL A P FIN

Source: Finance Ministries.

The  number  of  withdrawals  from  ATMs  was  very  high  during  the  first  week  of  January,
reflecting the enthusiasm and curiosity of individuals for their new currency. Adding together
the  results  available  for  seven  countries  (Netherlands,  Italy,  France,  Germany,  Austria,
Portugal  and  Belgium),  more  than  25 million  withdrawals  were  made  in  the  space  of
48 hours.  The  results  were  particularly  impressive  in  the  Netherlands,  where  more  than
5 million withdrawals in total were made on 1 and 2 January (i.e. one withdrawal for roughly
every  second  person  over  the  age  of  15).  The  volume  of  withdrawals  remained  high
throughout the euro area until the middle of the second week of January, when it started to fall
back to its normal level. Thanks to the quality of the logistics set in place by banks, no serious
supply problems were encountered at ATMs.

2.2.2.  Cash withdrawals or exchanges at bank and post office counters

Normally, ATMs account for some 70% (in volume terms) of notes distributed to consumers,
with only a modest level of withdrawals being  made  at  bank  and  post  office  counters.  This
was not the case during the first ten days of January: consumers flocked to the 218 000 banks
and  post  offices  to  withdraw  euros  or  to  exchange  their  legacy  currency,  causing  queues  to
form. In some countries (e.g. Germany and Spain) the volume of euros supplied to individuals
at counters was even higher than that supplied via ATMs. The rush began on 1 January in the
countries where banks were open to the  public that day  (Germany, Spain and  Luxembourg)
and  the  queues  began  to  shorten  and  return  to  normal  only  towards  the  end  of  the  second
week.  Many  consumers  turned  up  to  exchange  only  small  amounts  and,  in  some  cases,  the

9 The  only  incidents  recorded  were  a  90-minute  breakdown  of  ATMs  in  Austria  on  2 January  and  some

difficulties in the first few days with the dispensing of 5-euro notes in 10% of ATMs in Germany.

10

                                                
long queues that had formed forced a number of banks to provide this service only for their
customers.

2.2.3.  Giving of change by traders

In order to give change exclusively in euros in the first few days of 2002, traders required a
much  larger  cash  float  since  they  were  unable  to  recycle  as  change  the  national  notes  and
coins spent by consumers. Generally speaking, sales outlets, and in particular large stores and
supermarkets,  followed  very  closely  the  recommendations  made  at  European  and  national
level  that  they  should  give  change  exclusively  in  euros,  even  though  in  some  cases  small
shops  tended  in  the  first  few  days  to  give  change  in  the  same  currency  as  that  used  by  the
consumer for payment.

The situation regarding the distribution of notes and coins to sales outlets was strained during
the first week on account of the large number of consumers paying for low-value purchases
with  large-denomination  notes,  the  limited  capacity  available  for  cash-transport  operations
(for large stores and supermarkets) and the long queues in banks (for small shops). The 7 585
cash-transport vehicles in service in the euro area thus operated at full stretch in order to avoid
any interruption in supplies of euro notes and coins. Thanks to the efforts of the institutions
and  all  the  economic  actors  involved,  there  were  only  isolated  shortages  of  certain
denominations of notes and coins. These did not interfere with normal trading, affecting only
briefly  the  composition  of  change  given.  A  number  of  participating  countries  entered  into
arrangements  for  remedying  such  shortages.  For  instance,  the  Bank  of  Portugal  received
30 million  10-euro  notes  and  30 million  5-euro  notes  from  the  central  reserve  of  the
Eurosystem,  while  the  Bank  of  Spain  received  37 million  10-euro  notes.  In  mid-December
France acquired 100 million 50-cent coins from Spain.

Via  these  three  channels  (ATMs,  bank  and  post  office  counters  and  the  giving  of  change),
euros were  distributed very  rapidly to the  entire  population:  by  the  end  of  the  first  week  of
January a large majority of the population had euro notes and coins in their pockets.

2.3. Use of the euro for cash payments

In the  first few days of January  there  was  a  glitch  in  the  supply  of  euros  to  consumers  and
their  use  for  current  transactions.  Most  people  attempted  first  and  foremost  to  spend  their
legacy currencies before using the euro. It was very fortunate that this phenomenon was only
temporary  as  consumers  were  supplied  with  euros  via  ATMs  and  at  bank  and  post  office
counters  while  traders  gave  change  in  euros.  As  a  result,  the  legacy  currencies  swiftly
disappeared from circulation as traders and banks had a "mopping-up" effect.

The share of the euro in cash payments averaged some 20% by the end of 2 January, 40% by
the end of 3 January, 55% by the end of 4 January, 66% by the end of 5 January, 75% by the
end of 7 January, 85% by the end of 10 January, 92% by the end of 12 January and 95% by
the  end  of  16 January.  This  very  rapid  expansion  in  euro  payments,  coupled  with  the
exceptional measures taken by most large stores (increase in the number of cash desks open,
extra  support  staff  at  cash  desks,  etc.),  prevented  a  build-up  of  queues  in  sales  outlets.
Saturday  5 January  was  in  this  respect  a  key  day:  the  test  was  passed  in  all  participating
countries,  where  queues  were  no  longer  than  usual.  The  start  of  the  sales  did  not  alter  this
situation.

11

Share of euro payments in total cash payments

2 Jan
3 Jan
4 Jan
5 Jan
7 Jan
8 Jan
10 Jan

100
90
80
70
60
50
40
30
20
10
0

B

D EL

E

F

IRL

I

L NL A

P FIN

Sources: Finance Ministries; large stores and supermarkets. These figures are only indicative.

The share of cash payments in the total volume of payments increased in most participating
countries in the first two weeks of January as consumers attempted both to spend their legacy
currencies and to gain practical experience in using the euro. The situation began to return to
normal during the second half of January. Lastly, the changeover to euro notes and coins has
not  given  rise  to  any  particular  problems:  the  conversion  of  accounts,  cards  and  electronic
payment terminals has been satisfactory overall.

2.4. Recovery of legacy currencies

Whereas  the  distribution  of  euro  notes  and  coins  was  spread  over  three months,  legacy
currencies were returned for the most part in a matter of weeks, causing serious bottlenecks at
bank and cash-transport company warehouses  and giving rise to very long  delays  in  sorting
and counting coins in particular  and thus in crediting  traders' accounts at commercial  banks
and the latter's accounts at central banks.

More  than  one third  of  the  notes  in  circulation  (in  value  terms)  on  31 December 2001  had
been recovered by central banks by 11 January. The 50% mark was exceeded ten days later on
21 January.  By  8 February  almost  three quarters  of  notes  had  been  recovered.  The  actual
circulation  of  legacy  currencies  was  much  lower  than  these  figures  indicate  since  the
bottlenecks at temporary storage depots led to long delays in counting notes at central banks.
Since legacy currency notes and coins will be kept for "sentimental" reasons, since some will
be lost and since tourists returning from abroad will hold on to them, some of the notes and, in
particular,  coins  will  probably  never  be  recovered.  It  should  also  be  borne  in  mind  that  the
period  for  recovering  the  legacy  currencies  is  very  long  and  indeed  is  open-ended  in  most
participating countries for notes returned to central banks (see annexed table).

12

Return of national notes as % (in value terms) of notes in circulation on 31 December10

n
a
J
-
2
0

n
a
J
-
4
0

n
a
J
-
8
0

n
a
J
-
0
1

n
a
J
-
4
1

n
a
J
-
6
1

n
a
J
-
8
1

n
a
J
-
2
2

n
a
J
-
5
2

n
a
J
-
1
3

b
e
F
-
5
1

90

80

70

60

50

40

30

20

10

0

100
90
80
70
60
50
40
30
20
10
0

Withdrawals of national
notes as % of notes in
circulation as at 31
December 2001

2 Jan
3 Jan
7 Jan
10 Jan
14 Jan
18 Jan
22 Jan
29 Jan
8 Feb
20 Feb

B

D

EL

E

F

IRL

I

L

NL

A

P

FIN

The  withdrawal  of  coins  has  been  generally  slower:  by  22 February 2002  only  27.9%  of
national coins in value terms (13.5% in volume terms) had been recovered by central banks.11
A significant number of coins had been withdrawn from circulation by that date but remained
in storage pending sorting and counting. Coin collections by charitable organisations are still
taking place. The coin-recovery operations carried out by many of the participating countries
in  2001  resulted  in  the  equivalent  of  9%  (in  value  terms)  of  coins  in  circulation  being
recovered.

10 Source: ECB.
11  A significant proportion of coins will never be recovered.

13

                                                
National coins in circulation, in value terms (€m)12

B

D

EL

E

IRL

I

L

NL

A

P

FIN F

Rate of recovery of national coins, in value terms (%)

31 Dec

31 Jan
22 Feb

8 Feb

22 Feb

7000

6000

5000

4000

3000

2000

1000

0

60

50

40

30

20

10

0

B

D

EL

E

F

IRL

I

L

NL

A

P

FIN

To  facilitate  the  recovery  of  legacy  currencies,  a  number  of  central  banks  extended  their
opening hours in order to allow cash-transport firms to step up their deliveries.

3.  OTHER MATTERS ASSOCIATED WITH THE INTRODUCTION OF EURO NOTES AND COINS

These include  price stability, the  security  of  operations,  the  production  quality  of  notes  and
coins, counterfeiting and the conversion of vending machines.

3.1. Price stability on the occasion of the changeover to the euro

The  Commission  had  voiced  its  concern  that  the  lack  of  any  rapid  statistical  monitoring  of
price  movements  might  give  individuals  the  false  impression  of  a  generalised  increase  in
prices associated with the introduction of the euro. Its concern  was largely borne out by the
surveys among consumer associations and NGOs belonging to the "euro made easy" network

12 Source : BCE

14

                                                
and by the Eurobarometer  survey  conducted  at  the  end  of  January13:  67%  of  the  public  felt
that  more  often  than  not  prices  had  been  rounded  upwards,  28%  that  price  increases  and
decreases  balanced  one  another  out  and  1.9%  that  more  often  than  not  prices  had  been
rounded downwards. The countries where people were most pessimistic about price increases
were  Germany  and  France  (76%),  followed  by  the  Netherlands  (72%)  and  Ireland  (71%).
Portugal was the only country where most people were not convinced that prices had risen in
response to the introduction of the euro (49%).

The figures published by Eurostat on 28 February confirm that there was no general increase
in prices as a result of the currency changeover, its impact on the monthly price trend is put at
between 0% and 0.16%. The few increases linked to the changeover to the euro were due in
general to the service sector. Annual inflation rose from 2.0% to 2.7%between December and
January but virtually all of this increase was attributable to a combination of higher oil prices,
higher prices for fruit and vegetables (because of poor weather) and increases in certain taxes.

In the Eurobarometer survey conducted in mid-February, 61% of SMEs stated that they had
converted their prices into euros in a neutral manner, while 24% had raised some prices and
reduced others. The number of firms claiming to have reduced prices (6%) was roughly the
same as the number claiming to have raised prices (8%).

Overall, the voluntary price stability agreements, notably the European agreement concluded
under the auspices of the Commission in April 2001, have been complied with.

3.2. Security of operations

The  security  of  operations  was  very  satisfactory  throughout.  Despite  an  unprecedented
number of cash-transport operations and a virtual doubling in the number of notes and coins
distributed  to  economic  agents,  the  number  of  incidents  was  well  below  normal,
demonstrating the effectiveness of the security measures taken (escorts, etc.).

There were only 27 robberies of euro notes and 17 robberies of euro coins between September
and December 2001 (of which over a third took place in Germany, where frontloading began
at the beginning of September). By way of comparison, there was a total of 5 184 successful
bank robberies in the euro area in 2000.14 The results in terms of protection of the euro can,
therefore, be regarded as exceptionally good.

3.3. Production quality of notes and coins

The rules in force for ensuring the quality control of the production of euro notes and coins
have proved very effective. Only a few cases of defect have been detected involving a number
of 5-euro notes in France, 10-euro, 20-euro and 500-euro notes in Finland and 100-euro notes
in Greece and Bulgaria (produced in the Netherlands) as well as some 1-cent coins in  Italy,
20-cent  coins  in  France  and  2-euro  coins  in  Austria.  The  probability  of  receiving  defective
euros is less than 1 in 500 million for coins and 1 in 200 million for notes.

A German study has raised the question of potentially harmful pigments having been used in
the production  of the  10-euro note.  Tests carried  out at the request of  the  European  Central
Bank have  come  to  the  conclusion  that  there  is  a  risk  to  health  only  if  more  than  400  such
notes are swallowed.

13 Flash 121,"Euro attitudes" in the euro zone, January 2002.
14 Source: European Banking Federation.

15

                                                
Various  studies  have  been  critical  of  the  presence  of  nickel  in  1-euro  and  2-euro  coins,
pointing  to  the  possible  risk  of  an  allergic  reaction.  The  scientific  studies  conducted  a  few
years ago  at the Commission's request  showed  clearly  that  there  was  no  allergic  reaction  to
the use of nickel in coins.15

3.4. Counterfeiting

Euro notes and coins are better protected against counterfeiting than  any of the old  national
currencies.  Although  many  specialists  predicted  the  appearance  of  euro  forgeries  as  of
1 January, it is a fact that no cases were detected for the entire month of January. Only some
50  or  so  crude  forgeries  (photocopies,  prints  of  scanned  notes,  cut-out  notes,  etc.)  were
detected in January, an  exceptionally low figure (on average, 2 000 copies of national  notes
were detected each day in 2001). The situation regarding coins is also very satisfactory, with
only two poor-quality forgeries being identified in January.

In  most  cases,  these  crude  forgeries  were  detected  before  the  notes  or  coins  entered
circulation.

3.5. Conversion of vending machines

In spite of repeated warnings by the European Commission, many vending-machine operators
underestimated  in  their  plans  the  speed  at  which  the  new  currency  would  be  distributed,
expecting  cash  payments  in  euros  to  exceed  the  50%  mark  only  during  the  third  week  of
January (whereas this figure was reached  by  the  end  of  the  first  week).  In  many  cases,  this
adversely affected turnover and led to some delays in converting equipment; the time lost in
this way could not be made up rapidly because of shortages of trained staff.

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Rate of conversion
of vending machines
to the euro

8/01/2002
6/01/2002
4/01/2002
2/01/2002
30/01/2002
28/01/2002
26/01/2002
24/01/2002
22/01/2002
20/01/2002
18/01/2002
16/01/2002
14/01/2002
12/01/2002
10/01/2002

15

It is worth recalling that the composition of euro coins was laid down in a 1998 regulation of the European
Council following extensive discussions. Nickel had been widely used in producing national coins in Europe.
It had to be used for technical reasons since other metals do not guarantee an equivalent level of quality; 92%
of euro coins in circulation are nickel-free, compared with 75% of the national coins in circulation.

16

                                                
Source: Finance Ministries. These figures are only indicative.

There have been a number of cases where euro coins produced in other participating countries
have been rejected by vending machines because equipment had not been properly adjusted,
having been tested using only the national series of coins and not on the basis of the tolerance
required for all the series of coins in the euro area.

3.6. 

Physical introduction of the euro in third countries

According  to  the  European  Central  Bank,  the  central  banks  belonging  to  the  Eurosystem
frontloaded in December 2001 26 central banks or specialised institutions16 outside the euro
area  with  some  €4 billion.  Unfortunately,  no  figures  are  available  for  sub-frontloading  by
commercial  banks,  which  has  probably  been  the  main  channel  for  supplying  financial
institutions in third countries. According to the information received from the Commission's
delegations  in  forty  or  so  countries,  euro  notes  were  available  there  as  of  the  first  days  of
January. Many people, particularly in the applicant countries, were curious and attempted to
get their hands on euro notes.

A  large  number  of  national  notes  from  the  euro  area,  in  particular  German  notes,  were
hoarded or used in the central and eastern European countries. They began to be returned on a
massive  scale  in  2001,  notably  by  way  of  deposits  on  foreign-currency  accounts.17  The
exchange of  currency  or  its  deposit  in  accounts also took  place  on  a  very  large  scale  in  the
first few weeks of 2002. According to data collected by the European Savings Banks Group,
national notes from the euro area equivalent to €333 million have been returned to its member
financial  institutions  in  central  and  eastern  Europe.  It  should  be  noted  that,  in  value  terms,
individuals received more euros than they returned national currency in the Czech Republic,
Hungary,  Latvia  and  Lithuania.  By  contrast,  they  received  fewer  euros  than  they  returned
legacy  currency  in  Poland,  Albania,  Bulgaria  and  Slovakia,  although  it  is  impossible  to
determine whether the exchange benefited the local currency or the dollar.

4.  PUBLIC REACTIONS TO THE EURO

The Commission's Eurobarometer Flash survey (conducted between 21 and 31 January 2002)
sheds  light  on  the  public's  reactions  to  the  euro  and  on  how  these  differed  between
participating countries. The survey results fall into four categories:

16  The banks active on the wholesale note market were frontloaded directly.
17  For  example,  according  to  the  central  banks  in  the  countries  concerned,  deposits  on  foreign-currency
accounts  in  the  second  half  of  2001  were  equivalent  to  €400 million  in  Kosovo  (or  25%  of  the  country's
nominal GNP) and €3 billion in Croatia (or some 15% of the country's nominal GNP).

17

                                                
4.1. Assessment of the effectiveness of the preparations for the introduction of the euro

90

80

70

60

50

40

30

20

10

0

very well prepared
well prepared

B

D

EL

E

F

IRL

I

L

NL

A

P

FIN

On average, three quarters of the public consider themselves to have been well or very well
prepared  on  1 January 2002  (26%  very  well  prepared,  48%  well  prepared).  The  most
confident  assessments  were  made  in  the  Netherlands  (90%),  Belgium  (85%)  and  France
(80%),  and  the  least  confident  in  Portugal  (62%),  Spain  (67%),  Italy  (67%)  and  Greece
(67%).  The  self-employed  and  employees  (81%)  consider  themselves  to  have  been  better
prepared than manual workers (76%) and the non-active members of the population (66%).

A  very  positive  assessment  was  given  of  the  euro  awareness  campaigns.  Some  58%  of  the
public consider that the early changeover of bank accounts to the euro helped them to become
acquainted with the new currency, while 59% felt the same as regards the early switchover of
utility bills and 77% as regards dual pricing.

4.2. Public confidence in handling euros

At the end of January the changeover to the euro was still posing some difficulties for one out
of every five people and many difficulties for one out of  every thirty-five people  (2.8%).  In
eight countries (Germany, Spain,  Italy,  Luxembourg, the Netherlands, Austria, Portugal  and
Finland)  most  of  those  questioned  claimed  to  be  experiencing  no  difficulties.  The  two
countries  where  the  public  generally  said  that  it  was  encountering  most  difficulties  were
France  (38%)  and  Spain  (25%).  The  Netherlands  stands  out  as  the  country  in  which  the
general public is experiencing virtually no difficulties (3.2%), this being due in all probability
to  the  extensive  communication  campaigns  undertaken.18  On  average,  women  have
experienced more difficulties than men (25% as against 18%). All in all, these results can be
regarded as excellent in all participating countries.

18 The Dutch Government's communication budget for the period 1996-2001 was €67.7 million (or €4.40 per
inhabitant). By comparison, the average budget for campaigns  in the euro area was €1.05 per inhabitant.

18

                                                
Question: Is the introduction of the euro still proving very problematic, a bit problematic, not very problematic or not
problematic at all?

4 0

3 5

3 0

2 5

2 0

1 5

1 0

5

0

a   b i t   p r o b l e m a t i c
v e r y   p r o b l e m a t i c

B

D

E L

E

F

I R L

I

L

N L

A

P

F I N

Most people have no problem recognising (57%) or handling (66%) the different euro coins.
It is only in Ireland that a majority of the population (55%) claims to be having difficulties in
using them. On average, the over-55s (44%) have more difficulty in identifying them than the
under-24s (30%).

Overall, the notes pose far fewer difficulties than the coins: 93% of people have no problem
in identifying them while 91% have no difficulty in handling them.

Over three quarters of the public (77%) do not have the impression that the transition to the
euro has altered their purchasing behaviour, while one in every seven (15%) thinks that he or
she has purchased less and one in every  fourteen thinks that he or  she has purchased  more.
Ireland  stands  out  in  terms  of  the  high  proportion  of  consumers  (37%)  who  say  that  their
volume  of  purchases  has  been  affected.  On  average,  more  women  than  men  consider  that
there  has  been  a  change  in  their  purchasing  behaviour  (24%  as  against  19%),  and  this  for
reasons of prudence (17.5% claim to have bought less). There is no major difference on the
basis of age or educational attainment.

Many consumers are still experiencing some difficulty in memorising euro prices and judging
the new scales of value.  When  making  purchases,  most  of  them  (45%)  continue  to  think  in
terms  of  the  national  currency,  while  35%  continue  to  think  sometimes  in  terms  of  the
national currency and sometimes in terms of the euro and 18% in terms of the  euro.  Ireland
and  Portugal  are  the  only  countries  where  more  people  claim  to  think  in  euros  than  in  the
national  currency.  Men  tend  to  think  in  terms  of  the  euro  more  often  than  women  (21%  as
against 15%) and the over-55s (23%) more often than the under-24s (16%).

19

60

50

40

30

20

10

0

think generally in terms of
the euro
think generally in terms of
the national currency

B D

L E F
E

L I L
R

I

L A P
N

N
F

I

People rely only to a modest degree on calculators and converters: 41% never use them, 34%
use them sometimes, 15% use them often and 10% use them always. The countries in which
the highest number of people often or always use calculators and converters are France (41%),
Greece (35%) and Ireland (34%), probably because of their complicated conversion rates.

When asked about their wishes regarding the continuation of dual pricing, most people (54%)
felt that shopkeepers should no longer practise dual pricing after the end of the period of dual
circulation, that banks should no longer give the value in national currency (59%) and that the
latter  should  no  longer  be  printed  on  invoices  (58%).  The  figures  do  though  differ
significantly  between  countries.  In  France  (64%),  Ireland  (56%),  Finland  (56%)  and  Spain
(50%), for example, a majority of people would like to see dual pricing continued in shops,
whereas a majority of the population in Germany (65%), the Netherlands (64%), Luxembourg
(64%) and Italy (60%) are opposed to this. There is no significant difference in the replies as a
function of age or educational attainment.

4.3. Overall assessment by the public of the changeover to the euro

Some 60% of people consider that the changeover to the euro will have more advantages than
disadvantages  for  them  personally.  The  figure  is  particularly  high  in  Luxembourg  (79%),
Ireland (75.8%) and Portugal (71.1%). It is well below the average in two countries: Germany
(49%)  and  Austria  (45%).  The  over-55s  (52%)  are  distinctly  less  optimistic  than  the
under-24s  (71%).  Just  under  two thirds  of  the  public  (64%)  say  they  feel  more  European
thanks to the euro.

The assessment made of the introduction of euro notes and coins is extremely positive, with
over 80% of the public taking the view that it went well or very well.

20

Question : do you feel that, in your country, the changeover to the euro went very well, rather well, rather
badly or very badly?

1 0 0

9 0

8 0

7 0

6 0

5 0

4 0

3 0

2 0

1 0

0

w e n t v e r y  w e ll
w e n t w e ll

B

D

E L

E

F

IR L

I

L

N L

A

P

F IN

Lastly, more than two thirds of the public in the euro area are personally happy or very happy
that  the  euro  is  now  their  currency,  an  exceptionally  high  figure  which  confirms  the
enthusiasm of Europeans for their currency. Germany, Greece and Austria stand out with an
above-average  proportion  of  dissatisfied  individuals,  while  the  level  of  satisfaction  is
particularly high in Ireland (85%), Belgium (83%), Italy (82%) and Luxembourg (81%). On
average, men (73%) are more satisfied with the change of currency than women (61%), while
the under-24s (78%) are more satisfied than the over-55s (61%).

Question: All in all, are you very happy, quite happy, quite unhappy or very unhappy that the euro is now
your currency?

90

80

70

60

50

40

30

20

10

0

very happy

quite happy

B

D

E L

E

F

IR L

I

L

N L

A

P

F IN

The information campaigns in the participating countries, which the Commission has helped
to  finance,  will  continue  for  a  few  months  yet,  as  back-up  for  the  measures  aimed  at
familiarising the public with their new currency.

5.  PREPARATION OF SMES FOR THE EURO

There were concerns that SMEs may have been poorly prepared for the changeover but, all in
all,  this  proved  not  to  be  the  case.  The  considerable  efforts  made  by  the  national

21

administrations, banks and trade associations to increase the awareness of firms paid off in the
end. The Eurobarometer survey conducted in mid-February 2002 provides a very satisfactory
picture that contrasts with earlier surveys: many SMEs seem to have changed over to the euro
at the last minute.

The replies received fall into three categories:

- degree of preparation of SMEs on 1 January;

-

-

the difficulties encountered;

their overall assessment of their changeover to the euro.

5.1. Degree of preparation of SMEs on 1 January 2002

All  in  all,  the  results  are  very  satisfactory:  95%  of  SMEs  keep  accounts  in  euros,  96%  set
prices  in  euros  and  97%  issue  invoices  in  euros.  There  are  few  differences  between
participating countries. The results tend to be slightly better for larger enterprises.

Just under 84% of the few firms that have not converted their accounts into euros intend to do
so before the end of February. The corresponding figures for euro prices and euro invoices are
81% and 87% respectively.

100
98
96

94
92
90
88
86
84
82

accounts in euros
prices in euros
invoices in euros

B D EL E

F IRL I

L NL A P FI

In 2002 fewer than 9% of enterprises have received documents (price lists, invoices, etc.) that
do not give values in euros. This figure was particularly low in Portugal (4.2%) and Belgium
(5.3%)  but  much  higher  in  Ireland  (12.7%)  and  particularly  in  the  Netherlands  (20.8%).
Generally  speaking,  the  documents  in  question  were  invoices  (68%  of  cases),  commercial
offers (35%), payments (18%) and, to a much lesser degree, tax documents (6%) and social
security documents (6%). In the vast majority of cases, these non-euro-compatible documents
were sent by suppliers.

5.2. Practical difficulties encountered in switching to the euro

Over 85% of SMEs say that they did not encounter any practical difficulties in switching to
the euro. The result is more or less satisfactory for all the participating countries. In general,
enterprises  with  fewer  than  ten  employees  experienced  fewer  difficulties  (14%)  than  those
with more than fifty employees (21%).

22

25

20

15

10

5

0

Encountered practical
difficulties

B

D EL

E

F

IRL

I

L NL A

P

FI

The few problems encountered generally involved IT systems (36%), the setting or display of
prices  (25%)  or  invoicing  (19%).  Asked  who  had  been  of  most  assistance  to  them,  SMEs
listed in descending order banks (31%), accountants and business support centres (29%) and
chambers of commerce (9%). The State  was  mentioned by  only 4% of  enterprises, with  the
notable exception of Ireland (26%).

Question: Who assisted you most in preparing for the changeover to the euro?

80

70

60

50

40

30

20

10

0

Banks

Accountants/business
support centres

Chambers of commerce

State

B D EL E

F IRL I

L NL A P FI

5.3. Overall assessment of their changeover to the euro

SMEs did not have any unpleasant surprises on switching to the euro: some 60% of them feel
that  the  changeover  went  as  planned,  while  35%  of  them  feel  that  it  went  even  better  than
planned.

Almost two thirds of them take the view that the switch to the euro will not have any impact
on  their  business  while  just  over  one  enterprise  in  five  is  expecting  it  to  have  a  positive
impact.

6.  ANNEX

23

Main provisions for the end of the dual circulation period and exchange of legacy currency.

Free-of-charge exchange for customers

Free of charge for non-customers

Belgium

Germany

Greece

Exchange at banks after
legal tender
31.12.2002

Redemption after legal
tender1
Notes: Indefinitely
Coins: Until end-2004

Indefinitely

At least until 28.2.2002.
Effort at flexibility
thereafter.
Positive; to be decided
individually by the banks

Notes: Until 1.3..2012
Coins: Until 1.3.2004

No limit

BEF deposit: free of charge without limit until 31
December 2002
BEF exchange: free of charge for notes without limit until
28.2.2002, with notice to be given for large amounts
Subject to each bank’s decision. Some banks have already
stated they will not charge for exchange of legacy currency.

Spain

30.6.2002

Notes and coins: Indefinitely

France

30.6.2002

Ireland

Italy

For a period not yet
specified
30.6.2002.

Luxembourg

30.6.2002

31.12.2002 (banks may
charge for the exchange
as from 1.4.2002)
To be decided
individually by banks
after 28.2.2002
30.6.2002

Netherlands

Austria

Portugal

Finland

Notes: Until 17.2.2012
Coins: Until 17.2.2005
Indefinitely

Notes and coins:
Until 1.3.2012

Notes: Indefinitely
Coins: Until end-2004
Notes: Until 1.1.2032
Coins: Until 1.1.2007

Notes: Until 30.12.2022
Coins  Until 30.12.2002

To be decided
individually by banks

Notes and coins:
Until 29.2.2012

No limit until 30 June 2002 at banks for customers and
non-customers. Unlimited exchange at the Bank of Spain.
No limit

Household amounts up to an overall total of (at least)
IEP 500 per individual
Italian Banking Association recommendation: exchanges
for amounts up to twice the daily limit for withdrawals
from ATMs (about €500)
Unlimited exchanges with one working day’s notice.
Banks and post offices will exchange up to €1 000.
€-centres will exchange amounts of more than €1 000.
Private customers of banks can deposit and/or exchange
national currency free of charge until 1 April 2002.

Indefinitely

Recommended a maximum of ATS 50 000

Most banks will exchange legacy currency free of
charge up to a certain limit.

Banks recommend that the exchange be done by deposit.
Exchange free of charge for customers. Additional
exchanges depend on the rules of each bank.
No limit for amount or frequency when the exchange is
done by deposit.

Most banks will exchange legacy currency free of
charge up to a certain limit or for unlimited amounts.

Most banks will exchange legacy currency free of
charge up to a certain limit.

Most banks will exchange legacy currency free of
charge up to a certain limit.

Many banks will exchange legacy currency free of
charge up to a certain limit (DEM 500).

Many banks will exchange legacy currency free of
charge for unlimited amounts. Notice is needed for
large sums.
Many banks will exchange legacy currency free of
charge up to a certain limit.
Most banks will exchange legacy currency free of
charge up to a certain limit.
Many banks will exchange legacy currency free of
charge up to a certain limit.
Many banks will exchange legacy currency free of
charge up to a certain limit.

Exchange free for non-customers within a limit fixed
by each bank.
Most banks will exchange legacy currency for a charge.

1  At national central banks.

24