The Economist

Befuddled in Euroland

A M S T E R D A M , B O N N , B R U S S E L S , L I S B O N , M A D R I D , M I L A N A N D P A R I S

ELEVEN weeks before the launch of the single currency, some Europeans are deeply confused about what is about to happen. Only just over half know that euro notes and coins will not be introduced until 2002. Nearly a quarter think they will still have to change the euro into their own currency in order to buy things with it. Although 95% of the French know that the single currency is called the euro, only just over half the Irish do. Nearly two-thirds of Britons, who will not join the euro themselves, cannot name it at all.

In general, the most ignorant Europeans, besides Greeks, Britons, Danes and Swedes, none of whom will take part in the euro’s launch on January 1st 1999, are the Portuguese, Irish and Italians. Only half the Portuguese answered correctly a euro-quiz of six basic questions. The Dutch, Finns, French and Germans were among the best-informed. A French poll in August showed that an astonishing 60% of the French guessed correctly the rough exchange rate of the euro to the French franc. Belgians, in their own poll, did even better: two-thirds got their own exchange rate right.

In part, this reflects the effort governments have made to inform people. On November 10th, the French finance ministry will launch a second big euro publicity campaign; the first began a year ago. It will send out 33m copies of a 16-page brochure to every French home, and begin a three-week campaign on television. The Dutch government is spending 50m guilders ($27m) this year alone on its campaign. “The euro will belong to all of us”, declare posters at bus-stops and ads on television. The government has also set up a website on the euro.

The Spanish government started a campaign to prepare people for the euro a year ago, holding seminars for banks and businesses. This year it launched a national campaign. A four-day, mock-euro experiment was held this month in Churriana, a village near Malaga. Locals were allowed to buy “euros” worth a maximum of 4,600 pesetas (equivalent to 27.38 euros). Such was their enthusiasm, banks soon ran out of “euros” altogether.

Already, many French banks—and Dutch and Spanish ones—put the final balance on people’s bank statements in euros, working on a rough conversion: the exact exchange rate for each currency will be fixed on January 1st 1999. Centres Lelerc, a French supermarket chain, has been showing prices in both francs and euros since May, as have shops in Belgium and Portugal. Increasingly, French and Belgian hotels and restaurants are putting their bills in euros too.

German banks have been placing big ads in national newspapers and running television commercials to extol the virtues of the euro. Euro-keen Munich has already set up a 25-strong “euro working-group” to make sure that parking meters, vending machines and so on are ready for euro coins in 2002. The Belgian post office promises a new stamp by October next year, with a face value in both Belgian francs and euros. The tax authorities, keen for any money they can get, have been moving rather more quickly. A single form will offer the taxpayer the option of settling his liability in Belgian francs or in euros during 1999-2001.

Italians, on the other hand, who were flush with excitement when the lira scraped into the single currency earlier this year, seem less informed than they are enthusiastic. Then, there was a rush to name shops and products such as bank accounts and trains after the euro. Now, one poll suggests that many young Italians believe the euro is the name of a satellite television station.

As for the Portuguese, the government appears to have little faith in their level of knowledge: its television campaign shows a patronising “uncle”, unfolding the mysteries of the euro to a wide-eyed family. Perhaps it has a point. Only two-fifths of Portuguese are even aware that the countries that will launch the single currency have already been chosen.