Thursday 23 May 2019

Goodbye punt, hello Euro! How we changed currency

Years of planning saw some new money in 2002, says Paul Melia

Minister for finance Charlie McCreevy TD launching the European Movement Booklet
Minister for finance Charlie McCreevy TD launching the European Movement Booklet "The Euro Explained - Your Questions Answered" prior to the introduction of the new currency.

IT was the must-have item of early 2002 -- a small, cheap pocket calculator, which allowed shoppers to check just how much "old" money an item on offer cost.

The introduction of the European single currency, or euro, was expected to cause widespread confusion when it came into force on January 1, 2002, but the changeover went seamlessly.

Much of the success was down to a three-year public information campaign costing €5m, so by the time the new currency came into force the vast majority of people knew it was coming, what it was called and what a punt was worth.

While cheques could be written and non-cash transactions completed using the euro from January 1999, not until January 1, 2002, did it hit the shops.

Ireland joined 11 other states -- Austria, Belgium, Finland, France, Germany, Greece, Italy, Luxembourg, the Netherlands, Portugal and Spain -- in introducing the new currency, and the conversion rate for the punt was set at £0.787564 per €1.

There were strict rules for making conversions, meaning it was practically impossible for all but the most mathematically minded to do the sums in their head.

It involved dividing the Irish pound amount by the conversion rate, ie, by 0.787564, and rounding the resulting euro amount to two decimal places.

To get over the hump, 1.4 million cheap calculators were distributed to households across the State.

The changeover had begun some years previously, with the launch of the Euro Changeover Board of Ireland (ECBI) in May 1998.

There was great excitement, particularly from Government, which was keen to point out that the new currency would result in no foreign exchange fees when going on holidays, and make it easier to compare the cost of goods and services abroad.

Of course, that led to holidaymakers returning home to talk about a rip-off Ireland where everything was much more expensive.

But making the change wasn't easy. An endless number of machines had to be upgraded including those vending cigarettes, parking meters and toll booth coin chutes.

Pay slots on Dublin Bus were fitted with a warning asking customers to only pay for their journey in one currency, and only about half of all taxi meters were reprogrammed in time.

Even producing the money took more than 18 months, with 900 million coins minted at the Currency Centre in Sandyford, Co Dublin, along with 243 million notes.

In February 2001, the last of the Irish banknotes were printed -- £15m worth of £50s. People were encouraged to begin thinking in euro well in advance of the change, and figuring out how much a stamp or loaf of bread would cost in euro to prevent confusion.

Retailers and publicans were particularly worried, given they would have to deal with customers buying everything from sweets to sofas in the January sales.

Forfas offered training courses, and a Retailer Training Kit was delivered to 40,000 businesses, which included a euro calculator and coins for staff training purposes.

It also suggested that if a customer felt the product had suddenly become much dearer, the correct response was not "I don't know", "they make it very complicated" or "they should have left the Irish pounds", and instead to try and explain the process of how the 'higher' price was arrived at.

People were encouraged to purchase euro starter kits as Christmas gifts, each of which contained 19 coins, for just €6.35.

Finance Minister Charlie McCreevey even hosted a euro celebration event at 12.30pm on New Year's Eve where 'Happy Euro' cards, chocolates and pens were handed out.

There were some teething problems -- in one case, a house selling for £395,000 was translated into €495,198 -- about €10,000 short of the correct price.

On Inishmore off Co Galway, the changeover booklet was printed in Irish, but it was "book Irish", meaning many native speakers couldn't understand the translation.

Some pubs refused to accept Irish coins and computer keyboards couldn't cope with the new € symbol, so the letter 'E' was used until systems were upgraded.

All cash dispensers were taken out of service between 1.30am and 6am on New Year's Day to allow machines to be restocked with euro notes, meaning some revellers found they had no money for a taxi.

In the end, it was a resounding success. By the end of the first week, most cash payments were made in euros.

A Eurobarometer poll found that 42pc of Irish people thought about prices in the new currency by the following April, compared with 17pc across other countries.

And despite some fears, the vast bulk of the elderly were unfazed, saying the changeover to punts from the decimal system of pounds, shilling and pence (L.S.D) in February 1971 had been much more complicated.

All punts were gone by February 9, but they can still be exchanged at the Central Bank. Last year, almost €3m of the "old" money was redeemed, and it's believed that as much as €230m might still be out there.

Irish Independent

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