Irish consumers face a huge culture shock when the biggest change ever in the European Community - the euro currency - comes about, the director of consumer affairs, Mr William Fagan, said last week, at a seminar organised by the European Movement. Speaking in Cork, he said the debate so far had centred on the business community, while consumer groups had largely been viewing developments from a distance.
But the changes brought about by the euro would affect consumers more than decimalisation did in 1971, and would be the most visible sign that they are part of a functioning single market, he said.
"This will be a huge culture shock for Europe's consumers. A successful transition to the new currency will involve all of us leaving behind our `education currency'," he said.
Decimal currency had been successfully "implanted" in the Irish psyche but consumers still bought pounds of meat and stones of potatoes.
"The in-built resistance of consumers can only be overcome by a consumer-oriented acceptable equivalence approach," he said.
An information campaign would have to be undertaken by the EU and national governments on the decisions and process of European Monetary Union. From January 1st, 1999, "familiarisation" information would be needed.
"I mean, for example, dual pricing for transactions within the national territory and also the availability of `euro-pricing' for cross-border transactions, particularly those that involved debit/credit cardbased systems.
"I believe it is important that consumers actually get used to seeing pricing in euro amounts before the beginning of 2002," he said.
Information on the "concept of a fixed European currency" would encourage growth in the internal market and would illustrate price differences between member states.
Mr Fagan said that while it appeared consumers would be able to exchange national currencies for euros free in 2002, the question of charges between 1999 to 2002 had to be determined. A prohibition on charges on certain transactions for a fixed period should be introduced at European level, he said.
Mr Fagan added that it was unlikely, given the EU regulations, that a situation would arise where people would believe they were losing money in transactions. "A number of people with long memories say that in 1971 consumers were `ripped off' by price rises on the introduction of the new decimal currency."
While there would be "blips" in relation to "rounding" of prices, competition and not price control was the way to ensure that prices were kept down, he said. Meanwhile, according to a report drawn up by the international accountancy group, Deloitte and Touche, for EuroCommerce, the cost of switching from francs, marks and guilders to euros could be as high as 2.6 per cent of retailers' annual turnover.
"For many retailers, a figure of between one and two years of profits will disappear in the changeover," said Mr Gilles Goldenberg, the report's author.
While the euro should bring long-term savings for retailers, particularly those operating across national borders, these will be significantly outweighed in the shorter term by the costs, the report concludes.
"The costs are sure and concentrated. The benefits are long-term and maybe," Mr Goldenberg said.
