INTRODUCTION OF THE EURO
(21546)
10495/00
COM(00) 443
|
Commission Communication on practical aspects of the euro: state of
play and tasks ahead.
|
| Legal base:
| — |
| |
| Document originated:
| 12 July 2000 |
| Forwarded to the Council:
| 18 July 2000 |
| Deposited in Parliament:
| 8 September 2000 |
| Department: |
HM Treasury |
| Basis of consideration:
| EM of 18 September 2000
|
| Previous Committee Report:
| None |
| Discussed in Council:
| 28 September 2000 |
| Committee's assessment:
| Politically important |
| Committee's decision:
| Cleared |
Background
25.1 Member States within the euro area are now
just over a year away from the final changeover to the euro. Participating
Member States plan for existing currencies to cease to be legal
tender within two months of the introduction of the new currency
on 1 January 2002.
The document
25.2 The Commission Communication provides an
overview of the preparations undertaken so far by the euro area
countries and then turns to what it considers should be done before
2002. The overview is structured to reflect the two challenges:
Changing over from national currency units to
the euro
25.3 This section of the Communication concerns
both preparations by firms and measures to enable consumers to
familiarise themselves with the new currency.
25.4 As regards preparations by firms, the Commission
believes that use of the euro by businesses has been less than
anticipated and comparatively few firms have changed their accounting
systems over to the euro. Its findings relate to the period up
to April 2000. In the months immediately before then the Commission
detected a significant increase in use of the euro for payments.
It attributes this in part to the high number of mergers and acquisitions
and also to large firms starting to change over to the euro. In
all Member States, studies show that the gap between large firms
and small and medium sized firms as regards use of the euro is
widening significantly. Whilst there may be an increasing "multiplier"
effect as large firms demand to do business in euros with suppliers
and customers, the Commission is still concerned that many small
firms in particular are leaving their changeover preparations
until the later stages of the transition period and are unaware
of the timetable. It considers that a communication drive is necessary
in order to get firms to speed up their preparations.
25.5 As far as the public is concerned, the Commission
report that use of the euro remains at an extremely low level.
Although dual display of prices was being followed by 30% to 70%
of traders, the Commission say that it is questionable whether
consumers pay much attention to the euro pricing. It intends to
make a recommendation about how labelling can be used more effectively
to familiarise consumers with the euro. It also considers that
measures for persons at risk of being excluded from information
flows (for example, the elderly and those with sensory impairments)
should be stepped up in 2001 so as to meet their particular requirements.
It notes the role that local authorities and other public bodies
have in informing the public and considers that Member States
should support the information efforts of these authorities.
Preparing for the introduction of euro banknotes
and coins
25.6 The Commission say that, by the end of May
2000, 39% of the 50.3 billion coins needed for the end of 2001
had been produced and that about 14.5 billion bank notes will
be printed by the end of 2001. It notes that participating Member
States are responsible for issuing euro coins but that in June
2000 they requested the Commission to assume the role of co-ordinating
the common actions of the national mints.
25.7 The Communication records the initiatives
that European institutions and the Member States are taking to
reinforce protection of the euro against counterfeiting and that
the necessary Community legislative framework should be in place
well ahead of 2002.
25.8 The Commission note that in November last
year, a Common Statement was issued on the guidelines for the
introduction of euro notes and coins. Participating Member States
agreed to limit the dual circulation period to between four weeks
and two months from the start of 2002. Following the dual circulation
period, citizens in some countries will still be able to exchange
old notes and coins for new ones. It identifies a number of specific
issues, for example, the amounts banks will exchange without charge
to their customers and arrangements for people without bank accounts,
which have yet to be addressed in sufficient detail. The Commission
considers that all participating Member States should publish
their cash changeover plans and clarify the remaining issues.
The Government's view
25.9 In her Explanatory Memorandum of 28 September
2000, the Economic Secretary to the Treasury (Miss Melanie Johnson)
says that the Government wants the single currency to succeed
and to see a smooth introduction of euro notes and coins. It welcomes
the exchange of information on the experiences of the euro area.
Learning from the euro area is, the Minister says, a key to the
Government's approach to changeover planning. The Minister recalls
that the Second Outline National Changeover Plan for the UK was
published in March this year, and that it sets out what has been
learnt so far and how the UK will continue to monitor the experiences
of the euro area. She notes that ECOFIN will be involved in ongoing
discussion on practical aspects of euro preparations and that
the Commission's report will be discussed at the Internal Market
Council on 28 September.
Conclusion
25.10 This is a report on progress in arrangements
for introducing the euro in the participating Member States. It
does not, therefore, comment on the situation in the UK and the
suggestions it makes for further action are not directly applicable
in the UK. We note, however, that the Government intends to learn
from the euro area in its own approach to changeover planning,
in the different context of the UK and of government policy on
whether to join the euro. We have no questions to raise on the
document and clear it accordingly.
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