Euro Notes and Coins are finally herem 2002

12 European Union countries now use the same new Euro currency. Out of 25 European Union (EU) Member States these 12 issued and started the conversion to Euro Notes and coins on January 1, 2002.

Old currencies remain legal tender in many affected countries for up to two months but European consumers have been switching to the Euro as soon as they can get their hands on it. Within the first week some 80% of transactions were being carried out in Euros rather than the old local currency in many of the countries affected.

On Holiday in Spain at the time, I was able to enjoy the moment when it suddenly became the Spanish rather than visiting English and American tourists who had to resort to calculators to try to evaluate prices.

Waiting patiently to visit Gaudi's Sagrada Familia in Barcelona I and various American and Japanese tourists were delayed, not by other foreigners getting to grips with hundreds of Pesetas, rather we waited for Spanish people to realise it was now just € 4.20 to enter. (my handy pocket look up table from Ajuntament de Barcelona shows this would have been about 666pta)

EU (European Union) Countries converting to the Euro include:

Kosovo and Montenegro, countries which are outside the European Union also converted to Euro notes and coins. They had been using the Deutschmark which now ceases to exist.

Adding the populations and GDP of the Euro countries shows how the European single market is starting to become more of a reality and of a comparable size to the USA single market.

European standards such as the CE mark are making products more acceptable across the European marketplace. However legislation and language still differ from European country to country, and as can be seen from the table comparing Europe with USA, a greater GDP per person appears to be being achieved in the US than all Euro Zone countries excepting Finland.

Quick Summary recent Euro parliament Newsreleases:Euro zone enters 2002 with:
- Unemployment running at 8.5%
- Industrial producer prices down by 0.4%
- Euro-zone inflation estimated at 2.0%
- Euro-zone labour costs up by 3.3%
- Euro-zone GDP up by 0.1%, EU15 up by 0.2%
- 379.4 million inhabitants in the EU
- 305.1 million in the Euro zone on 1 January 2002
  [Click here to visit the Europarliament website]

Language divides European markets.
The Euro zone remains a long way from a United States of Europe from the consumer Marketing point of view.

This challenge is alluded to on the European Parliament website where sections are devoted to language.

Their page: A Community of languages 2001, European Year of Languages Includes a section Why learn Spanish, Danish, German, Greek, English, French, Irish, Italian, Luxembourgish, Dutch, Portuguese, Finnish or Swedish?

Operating within the European Single market you may not be able to master all these but your organisation will have to include the communication skills required for each country and language market within the so called single market.

Within EU but not in the Euro?

Various European Union Member states have remained outside the Euro including Sweden, the United Kingdom and Denmark.

The Danish kroner is still part of the European exchange rate mechanism so is shadowing the Euro while the UK Pound remains a freely floating currency. Click here for a detailed summary from the BBC website

Non EU Switzerland, which also retains its national currency is now surrounded by Euro states. It will be interesting to see how the Swiss respond as their Tourist income may be threatened unless they now accept Euro payment for goods and services.

A New Pricing Transparency

It will now be harder to justify variation in prices across European Union member countries and harder still between Euro zone countries as prices will be more directly comparable.

Local value added taxation remains a differentiating influence but where this provides significant difference as was immediately evident in petrol prices, in some southern European national boundary areas, the higher price will loose companies and tax authorities revenues.

BMW harmonises Euro prices

The BBC website reported that BMW has acted to rationalise Euro prices for some of its models to avoid just these problems.

Justin Webb, BBC Europe correspondent, writes that the German car maker, BMW, says cars in its new 7-series will have the same basic price, excluding taxes, in all 12 eurozone countries. Click here to read his article

We can expect a number of companies to follow suit.

It will be interesting to see whether this new transparency which will also apply to local tax rates will cause demand led tax harmonisation as consumers will quickly realise which national states are bumping their retail prices the highest.

Author Mark Abraham (mark@sticky-marketing.net) 10th January 2002

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