Still Mourning the Mark

The euro might have found a place in Germans’ wallets when cash machines started dispensing the bills on January 1st of this year, but the new money has yet to find a place in their hearts.

A survey conducted by the European Union Commission of citizens of the 12 “eurozone” countries, states which have abandoned with previous national currencies for the euro, found that while half of Europeans had embraced the currency, Germans by far expressed the most dissatisfaction with the money that took the place of their beloved deutschmark.

More than two thirds of Germans (67.8 percent) said they were dissatisfied or outright unhappy with the euro, the EU Commission reported on Thursday at a press conference taking stock of the euro’s acceptance as it approaches its one-year anniversary as a circulating currency.

Less than one third of Germans expressed satisfaction with the new coins and bills.

Euro = “Teuro”?

Officials in Brussels blame the lower acceptance rates in Germany partly on the so-called “teuro” dabate that took place earlier this years. The euro came to be popularly known by many as the “teuro”—a play on the German word for “expensive”—when some sectors used the euro transition as an opportunity to raise prices. While analysts say actual overall price inflation was low (no more than 0.2 percent according to the Eurostat statistics office), real price hikes did occur in some food and service sectors, leading to a perception that the euro equalled less buying power.

Nostalgia for the old deutschmark also played a role in Germans’ less-than-adamant love affair with the new legal tender. After the devastation of World War II, for many the deutschmark symbolized the prosperity of the Wirtschaftswunder, a strong German economy, and with it, a high level of security. Surrounded by unstable currencies like the Italian lira or the French franc, the deutschmark proved itself time and again to be immune from severe fluctuations and runaway inflation.

Some retailers have taken advantage of this yearning for times past and have started accepting deutschmarks in their establishments again alongside the euro. In the northern German town of Kropp, almost all the businesses teamed up to run a campaign in November and December called “the Deutchmark is Back.” People from the surrounding region have been pouring into shops in the town of 6,500 to spend their old deutschmarks, causing a mini economic boom that is the envy of the surrounding municipalities.

Better marks elsewhere

Overall, the EU reported on Thursday that, in its estimation, the euro has been a success. “The successful changeover marked the beginning of a new era for Europe,” said Pedro Solbes, the EU’s Economic and Monetary Affairs Commissioner. Many EU nations, particularly smaller ones, share his enthusiasm.

Nations with unstable, inflation-prone currencies like Italy and Greece were all too happy to join the European monetary project. While the Italians might complain that euro coins are too heavy, nearly one half (49.7 percent) of Europeans interviewed expressed basic satisfaction. Only 38.7 percent revealed negative feelings toward the euro one year on. Smaller nations, such as Luxemburg, Belgium and Ireland, are the euro’s strongest advocates. In these countries approval rates run over the 70 percent mark.

Psychological Barriers

Despite the general levels of acceptance, the psychological changeover to the euro has yet to take place. The survey found that only 42.2 percent of consumers calculate prices in euros. Most people still make mental calculations in their old currencies and then convert. When it comes to big-ticket items like houses or cars, that percentage drops to 12.2 percent.

One reason for this, officials in Brussels say, is the dual display system used by many retailers which indicates prices in both euros and the old currency. This double listing, which nearly half of consumers say they like, delays the mental changeover and could ever prove counterproductive, according to the EU. The Commission has called on retailers to end the practice by the end of July 2003.