- More than 90 per cent of consumers in countries that
use the European single currency believe the advent of the euro has sent
prices soaring, leading Brussels officials admitted yesterday.
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- Joaquin Almunia, the European Commission's monetary affairs
commissioner, acknowledged that the idea had "taken hold" in
some countries that the euro had sharply increased the cost of living.
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- This was poisoning public opinion against plans to extend
the currency to the whole of Europe.
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- Such gloom had "spilled over" into the 10 new
member states that joined the European Union last year.
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- An average of 71 per cent of people in the new states
expressed fears of "abusive price rises and cheating" should
they one day switch to the euro, Mr Almunia said.
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- Addressing what amounted to a crisis meeting on the three-year-old
currency, he told colleagues they faced, "a battle for the hearts
and minds of European consumers. Losing it will mean very serious consequences
in terms of consumers' attitudes to the euro".
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- In some countries, such as Greece, Spain and France,
98 per cent of consumers believe the euro has favoured higher prices.
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- Mr Almunia and his officials offered a flurry of statistics
and explanations, insisting the euro was not to blame.
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- Officials pointed to everything from bad weather and
epidemics of animal disease in the year after the euro's introduction,
to oil price rises and sharp hikes in cigarette taxes, as causes of inflation.
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- Above all, they said that inflation was not as high as
people thought.
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- Officials said actual inflation had been held to about
two per cent across the euro-zone, though EU attitude surveys found the
public believed inflation was nearer five per cent.
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- Jan Schmidt, the director of the commission's economic
evaluation service, said consumers largely based their perceptions of prices
on local, everyday purchases, such as cups of coffee, bread, restaurant
bills or car repairs.
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- The cost of such "psychologically important"
goods and services had risen sharply in many cases. Other types of goods
fell in price, but they were harder for consumers to recognise, Mr Schmidt
said.
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- Officials pinned most blame on Europe's small businessmen,
from barbers to newsagents, cafes or dry cleaning stores. They said many
had taken advantage of the euro's arrival to impose "unjustified price
increases" on their local customers, who were unlikely to travel hundreds
of miles to find a cheaper meal or haircut.
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- Brussels officials make no secret of their dream to extend
the single currency from the present eurozone of 12 nations.
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- But public support for the euro ebbed away last year
in such key eurozone countries as Germany, Holland and Austria, according
to a Commission-sponsored "euro-barometer survey" described at
the Brussels conference.
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- Only 39 per cent of Dutch people believe the euro has
been beneficial for their country, and only 41 per cent of Germans.
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- Overall in the eurozone, 53 per cent believe the euro
has brought advantages, while 36 per cent believe it has been harmful,
according to the survey, conducted by Gallup at the end of last year.
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- In Britain, scepticism has remained constant in recent
years, with roughly two thirds of Britons believing the euro will not replace
the pound.
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- © Copyright of Telegraph Group Limited 2005.
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- http://www.telegraph.co.uk/news/main.jht].html
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