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The Gallup Organization Flash EB No1 87 2006 Innobarom eter on Clusters

Analytical Report, page 1

Flash Eurobarometer

The eurozone, 5 years after

the introduction of euro coins

and banknotes

Analytical report

Fieldwork: September 2006

Report: November 2006

FlashEurobarometer193T

heGallupO

rganization

This s urvey was reques ted b y the DG ECFIN-R-4: E xternal Communication and

coordinated by Eurobarometer Team of the European Commission.

This do cument does no t represent the point o f view of the European C ommission.

The interpretations and opinions contained in it are solely those of the authors .

European

Commission

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Flash EB Series #193

The eurozone,5 years after the

introduction of eurocoins and banknotes

Conducted byThe Gallup Organization Hungary/Europeupon the request of Directorate-General for

Economy and Finance (R-4, ExternalCommunication)

Survey organised and managed by theEurobarometer Team of the European

Commission

This document does not represent the point ofview of the European Commission.

The interpretations and opinions contained in itare solely those of the authors.

THE GALLUP ORGANIZATION

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The Gallup Organization Flash EB No193 The euro 5 y ears after


Table of contents

Introduction................................................................................................................................ 5

Main findings.............................................................................................................................. 6

1. Practical aspects of using the euro...... ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..... 7

1.1 Difficulties encountered when using the euro........ ........ ........ ........ ........ ........ ........ ........ ........ ..7

1.2 Recognising and handling euro coins and banknotes ........ ........ ........ ........ ........ ........ ........ .......9

1.3 The euro as a benchmark for price calculations........ ........ ........ ........ ........ ........ ........ ........ .....11

1.4 Changes in consuming behaviour since the introduction of the euro.......................................13

1.5 Correct knowledge of charges for money and banking transactions across the eurozone ........ ..16

2. Future expectations ............................................................................................................... 19

2.1 The usefulness of dual price displays ....... ........ ........ ........ ........ ........ ........ ........ ........ ........ ....19

2.2 The future of euro coins and banknotes ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ 222.2.1 Current selection of euro coins ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...... 222.2.2 Which coins should be removed? ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..232.2.3 Consequences of the suppression of small coins ........ ........ ........ ........ ........ ........ ........ .....242.2.4 New euro coin denominations ....... ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ 25

3. Using the euro outside the eurozone ....... ........ ........ ........ ........ ........ ........ ........ ........ ........ ....... 26

4. Perceived consequences of adopting the euro ........ ........ ........ ........ ........ ........ ........ ........ ........ 29

4.1 Advantages and disadvantages of adopting the euro............. ........ ........ ........ ........ ........ ........ .29

4.1.1 Overall evaluation of the adoption of the euro ........ ........ ........ ........ ........ ........ ........ ........ 29

4.1.2 Advantages of the adoption of the euro........ ........ ........ ........ ........ ........ ........ ........ ........ ..324.1.3 Disadvantages of the adoption of the euro............. ........ ........ ........ ........ ........ ........ ........ .334.2 Perceived effect on prices....................................................................................................33

4.2.1 Price stability and the adoption of the euro........ ........ ........ ........ ........ ........ ........ ........ .....334.2.2 Price convergence and the adoption of the euro ........ ........ ........ ........ ........ ........ ........ ...... 35

5. The international role of the euro and European identity.............. ........ ........ ........ ........ ........ 37

5.1 International status of the euro.............................................................................................37

5.2 The euro/dollar exchange rate..............................................................................................39

5.2.1 Concerns about the euro/dollar exchange rate......... ........ ........ ........ ........ ........ ........ ........ 395.2.2 Knowledge of euro/dollar exchange rate ........ ........ ........ ........ ........ ........ ........ ........ ........ 41

5.3 The euro and the development of a European identity ....... ........ ........ ........ ........ ........ ........ ....42

6. Enlargement of the eurozone with the New Member States....... ........ ........ ........ ........ ........ .... 44

6.1 The extension of the eurozone to the New Member States.....................................................44

6.2 Citizens opinions on the extension of the euro to the New Member States .............................46

7. Coordination of economic policies within the EU Member States...... .... .... .... .... .... .... .... .... .... 49

7.1 Awareness and evaluation of economic policy coordination ........ .... .... .... .... .... .... .... .... .... .... ..49

7.2 Evaluation of the domestic situation............ ........ ........ ........ ........ ........ ........ ........ ........ ........ .53

7.3 Evaluation of public finances...............................................................................................56

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Flash EB No 193 The euro five y ears after The Gallup Organization

page 4

8. Public opinion and the Stability Pact........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..... 59

8.1 Awareness of the Stability Pact............................................................................................59

8.2 Enforcement of the Stability Pact............ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....62

8.3 The Stability Pact and a strong and stable euro ........ ........ ........ ........ ........ ........ ........ ........ .....63

8.4 Penalties for non-compliance with the Stability Pact ........ ........ ........ ........ ........ ........ ........ .....648.5 Eurozone countries respect Stability Pact rules ........ ........ ........ ........ ........ ........ ........ ........ .....66

9. Annex tables.......................................................................................................................... 69

10. Survey details ....... ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......108

11. Survey questionnaire ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..111

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Introduction

The euro is the official currency of the European Union Member States of Austria, Belgium, Finland,France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain, alsoknown as the euro area. Slovenia is scheduled to join the euro area in 2007. The euro is the single

currency of more than 300 million people in Europe. Especially since its launch in physical form (asbanknotes and coins), the euro has become a recognised international currency enjoying the kind ofstability and predictability favoured both by consumers and investors in the European Union and

elsewhere.

The European Commission repeatedly measures changes in citizens public perception in the 12

eurozone countries. The current report follows up on a series of earlier surveys of which the firstsurvey was conducted in March 2000 (Flash EB 76) that has been continued at regular intervals eversince. The current study covers the following aspects of citizens experience with their new money:

- Practical aspects of the single currency- Future expectations

- Use of the euro outside the eurozone- Perceived consequences of the adoption of the euro- The euro and European identity

- Opinions on the enlargement of the eurozone- Opinions on typical economic events and the Stability Pact

The surveys fieldwork was carried out between the 4th

and 8th

of September 2006. Over 12 000randomly selected citizens aged 15 years and over were interviewed across the eurozone. The surveywas dominantly carried out by telephone, with WebCATI (web-based computer assisted telephone

interviewing). To correct for sampling disparities, a post-stratification weighting of the results wasimplemented, based on socio-demographic variables.

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page 6

Main findings

In 2006, the adoption of the euro is still perceived to be a positive change; however, we noticea decreasing trend in enthusiasm for it since 2002. This survey found the lowest rate of

approval for the euro since its introduction.

A majority of the citizens in the eurozone adjusted quite easily to the new currency. Part of thecitizens, however, still has difficulties adapting to it. Citizens are becoming more comfortable

with handling the euro, and are increasingly using the euro as a mental benchmark whencalculating the prices of common purchases. The main indices measuring how embedded theeuro is in the twelve eurozone countries how comfortable citizens are in handling the euro,

and how often they use the euro as a mental benchmark when calculating the prices ofcommon and especially major purchases show a very positive change since 2003.

The majority of eurozone citizens prefers not to maintain the dual display of prices. While

there is some pressure to remove the smallest euro coin denominations, the majority are

satisfied with the variety of denominations which they currently have. Citizens are convincedthat the removal of small denominations would increase prices.

The main benefits stemming from the introduction of the euro are regarded to be cheaper andeasier travel (most Europeans take euros with them even if they travel outside the eurozone);easier price comparisons; and a stronger position of Europe in the world. On the other hand,

citizens almost unanimously blame the euro for increasing price levels and they do not believethat the euro has contributed to a price convergence between the eurozone countries.

The euro has maintained its perceived status as an international currency, and we see anincreasing trend in this perception since 2003. In 2006, three quarters of the citizens of the

eurozone perceive their currency to be an international currency comparable to the US dollarand the Japanese yen. Most people do not care about the conversion rate, but still, the majorityare aware that one euro is worth more than one US dollar.

Most citizens in the eurozone do not think that the euro has had any effect on their feelings ofbeing European. Among the minority who report such an effect, most respondents feel astrengthened European identity due to the single currency. These perceptions did not change at

all compared to 2005.

The future enlargement of the eurozone to the 10 New Member States is an event expected by

most citizens in the eurozone. Two thirds approve the inclusion of the New Member States in

the euro area.

When evaluating their countrys economic situation in comparison to the economic situationof other Member States, many of the respondents continue to believe that their countrys

economic situation is not as good as those of other countries that use the euro. However, theydo see their countries economic situation in more positive terms than they did a year ago.

Awareness of the Stability Pact is very low; many citizens report that they have not heardabout it, and even the majority of those who say that they have heard about it have no clear

idea about what it exactly is. Still, many people have an opinion on the Stability Pact. Overall,the Stability Pact is seen as a good thing, since it has made the euro a stable and strongcurrency. Opinions vary on how strictly the rules of the Pact should be applied in difficult

economic periods, and as to whether sanctions are imposed in the same manner to all MemberStates that do not respect the Stability Pact.

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1. Practical aspects of using the euro

The first chapter examines citizens experiences with the practical use of the euro. The questionsmeasure the state of the adaptation process to the euro with regard to practical difficulties using theeuro, the handling of euro coins and banknotes, the euro as a benchmark for price calculations, effects

on consumer habits, and knowledge of the transaction charges carried out between countries in theeurozone.

Overall, it seems that citizens in the eurozone are adjusting more and more to having the euro as theircurrency, as was already noted in previous years. Citizens are becoming more comfortable withhandling the euro, and are increasingly using the euro as a mental benchmark when calculating the

prices of common purchases.

1.1 Difficulties encountered when using the euro

Source:

F LASH EB 193Septembe r 2006

GALLUP

Difficulties of using the euro

26

15

53

30

17

52

33

16

14

59

51

35

No difficulty at all

Some difficulty

A lot o f difficulty

9/2006 1 0/2005 1 1 /2 004 1 1/ 2003

Q1. Its five(4, 3, 2) years since we have been using the euro instead of [NATIONAL CURRENCY]. Today, would you say

that the euro continues to cause you a lot of difficulty, some difficulty or no difficulty at all?% EU12

Today, 59% of citizens in the eurozone indicate that the euro causes them no difficulty at all. Between2003 and 2005, the percentage of citizens experiencing no difficulties at all remained fairly stable.

However, comparing 2005 and 2006, there is an increase of 6 percentage points in the number ofcitizens experiencing no difficulties at all (53% compared to 59%).

Although citizens are adjusting more and more to having the euro as their currency, we still find that

almost five years after its introduction, a significant number of respondents in the eurozone countriesclaim to have some or a lot of difficulties with the euro (41%).

Within the groups of those experiencing difficulties with the euro, we notice a gradual decrease in thepercentage of citizens experiencing some difficulty. In 2003, 35% of the citizens reported that the euro

continued to cause some difficulty, while in 2006 this percentage has dropped to 26%. However, wedo not observe a similar decrease in the percentage of respondents experiencing a lot of difficulty this number has remained virtually unchanged since 2003.

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page 8

Source:

FLASH EB 193September 2006

GALLUP

77

74

68

67

67

67

66

64

59

59

51

45

81I E

LU

PT

FI

NL

B E

ES

A T

DE

EU12

EL

FR

I T

Q1. It's five years since we have been using the euro inste ad of[ NATIONAL CURRENCY].

Today, would you say that the euro continues to cause you a lot of difficulty, somedifficulty or no difficulty at all?

Difficulties of using the euro

No difficulty at all,by country

We find a large amount of variation between individual countries; the percentage of thoseexperiencing no difficulty at all ranges from 81% in Ireland to only 45% in Italy. Countries at thehigher end of this distribution are Luxembourg and Portugal, with 77 and 74% of citizens experiencing

no difficulty at all. At the lower end, Italy is joined by France; in France 51% experience no difficultyat all. However, Italy is the only country where the number of respondents experiencing difficultieswith the euro outnumber those with no difficulties at all (55% compared to 45%).

Difficulties of using the euro, % ofNo difficulty at all answers, 2006

SEX

Male 65

Female 53

AGE

15 24 73

25 39 65

40 54 56

55 + 52

EDUCATION

until 15 y ears of ag e 46

16 - 20 58

20 + 64

Still in education 74

OCCUPATION

Self -employ ed 63

Employ ee 62

Manual worker 56

Not working 57

LOCALITYTYPE

Metropolitan area 62

Other town s 59

Rural zones 58

Q1. It's five years since we have been using the e uroinstea d of [NATIONAL CU RRENCY]. Today , would yousay that the euro continues to cause you a lot of difficulty,

some difficulty or no difficulty at a ll?

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With regard to socio-demographic variables, the same pattern emerges as has been described inprevious years. Men experience less difficulty with the euro than women; 65% of men report having

no difficulty at all compared to 53% of women. Younger citizens also experience less difficulty. Forexample, while 73% of the youngest age category report having no difficulty at all, only 52% of theoldest age category feel this way. With regard to educational levels, those still in school are most

likely to report that they have no difficulty (74%), followed by those who have studied until 20 years

of age (64%). For respondents who did not study beyond 16 years of age, more (54%) experiencedifficulties with the euro than experience no difficulties at all (46%).

The percentages also vary according to occupation and place of residence, although to a lesser extent.Within the occupational groups we find a distinction between the self-employed and the employees on

the one hand, and the manual workers and those not working on the other hand. When it comes toexperiencing no difficulties, the self-employed and employees outnumber the manual workers andthose not working with slightly more than 5 percentage points. And finally, citizens living in

metropolitan areas experience less difficulty than citizens from rural areas (62% compared to 58%).

1.2 Recognising and handling euro coins and banknotes

74

7 3

72

7 1

24

25

26

26

2

2

2

3

0 10 20 30 40 50 60 70 80 90 100

9/2006

10/2005

11/2004

11/2003

% very + rat her easy % v ery + rat her di ff i cu l t % ne it her easy nor d iff icu lt D K/NA

Difficulty of distinguishing between and manipulating coins

Source:FLASH EB 193

September 2006

G ALLUP

94

9 3

9 3

92

4

5

5

6

1

2

1

2

0 10 20 30 40 50 60 70 80 90 100

9/2006

10/2005

11/2004

11/2003

% very + rather easy % very + rather diff icult % neither easy nor dif ficult

Difficulty of distinguishing between and manipulating banknotes

Q4. When you pay cash, would you say that it is: very easy, rather easy, rather difficult or very difficultto distinguish and to manipula te coins/ bank notes?

% EU12

In 2006, 74% of the citizens of the eurozone find using the euro coins easy. Although this majority ofcitizens thoroughly comfortable with the coins is large, there are even more people who find it very or

rather easy to use the banknotes (94%).

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page 10

While a large majority of citizens from EU12 countries finds using euro banknotes easy and threequarters of the citizens are comfortable with euro coins, one quarter of citizens still consider it difficultto distinguish between and manipulate the euro coins.

No significant changes can be observed between 2003 and 2006; the percentage of those comfortablewith euro coins and bank notes and the percentage of those experiencing difficulties with euro coins

and banknotes increases or decreases by no more than 1 percentage point from year to year.

89 87 85 857 9 7 6 7 4 7 3 7 2

68 66 61

9 7 7 14 14 2123 24 27 26 29 31 37

1 4 61 1 2 2 1 2 3 3 2

89

11

0%

10%

20%

30%

40%

50 %

60%

70%

80%

90%

100%

FI ES PT IE EL IT LU EU1 2 FR BE A T NL DE

% ver y + r at her ea sy % ver y + r at her dif fic ul t % nei ther eas y nor dif ficu lt DK /NA

Difficulty to distinguish and to manipulate coins, 2006

Source:FLASH EB 193

September 2 006

GALLUP

96 96 95 95 95 95 94 93 93 90 90 89

2 3 3 4 4 5 4 4 6 5 9 6 5

1 1 1 1 1 1 1 2 4 6

97

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

FI BE LU FR EL IT DE EU1 2 NL AT IE ES PT

% very + rathe r e asy % ve ry + ra the r difficult % ne ith er e asy nor difficult DK /NA

Difficulty to distinguish and to manipulate bank no tes, 2006

Q4b. Wh en you pay cash, would you say that it is: very easy, rather easy, rather difficult or ver y difficult to distingui sh

and to manipulate coins/ bank notes?

% by country

In 2006, Germany, the Netherlands, and Austria have the highest number of respondents withdifficulties using the coins of their new currency (37%, 31%, and 29%, respectively). The countrieswith the lowest percentages of citizens having trouble with euro coins are Spain, Portugal and Finland(7%, 7%, and 9%, respectively). The percentage of those who consider using euro banknotes difficultis rather low across the eurozone, and there is also less variation. However, in some countries peopleare somewhat more likely to say it is difficult, in particular Ireland (9%), Spain (6%), and theNetherlands (6%).

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1.3 The euro as a benchmark for price calculations

29

24

19

16

29

31

31

27

4 0

43

49

54

0 10 20 30 40 50 60 70 80 90 100

9/2006

10/2005

11/2004

11/2003

M o st oft en in eu ro As o ft en in eu ro as in [NAT. CURRENCY] M o st oft en in [NA TIONAL CURRENCY] D K/NA

The euro as mental bench mark for:

... exceptional purchases

Source:FLASH EB 193

September 2006

G ALLUP

57

56

52

4 6

21

22

22

24

22

21

25

30

0 10 20 30 40 50 60 70 80 90 100

9/2006

10/2005

11/2004

11/2003

... small purchases

Q2. Today, when purchasing, do you count mentally: most often in euro, most often in [NATIONALCURRENCY], or as often in euro as in [NATIONAL CURRENCY] when it concerns ...

% EU12

The euro seems to have reached a mental plateau in the extent to which people use it as a benchmarkcurrency for small purchases. 57% of citizens of the eurozone state that they calculate prices in euros

when carrying out everyday shopping. This opinion is as widespread as it was in 2005, showing only anominal change (+1 percentage point).

The previous years trend of increasing comfort with the euro as a benchmark currency for exceptionalpurchases, such as buying a car or a house, continues in 2006. For exceptional purchases, peopleincreasingly count in euro (+5 percentage points) and are less likely to calculate in national currencies

(-3 percentage points). We find that the euro is slowly becoming the benchmark currency forsignificant purchases. Nevertheless, major purchases are still primarily calculated in former nationalcurrencies (40%).

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page 12

Source:FLASH EB 193

September 2006

GALLUP

41 39 36 33 30 29 26 24 24 22 20 18

5

30 33

21

9

40

2926 33

47

2135

16

6

28 27

4357

28

40 44 41

27

5543

65

1 1 1 2 2 2 4 2 3 2 2 1

88

0%

10%

20%

30%

40%

50 %

60%

70%

80%

90%

100%

IE EL IT LU NL FI EU12 DE ES PT A T FR BE

Most often in euro As often in euro as in [NATIONAL CURRENCY] Most often in [NATIONAL CURRENCY] DK/NA

Exceptional purchases, 2006

Q2 a. Toda y, when purchasing , do you count mentally: mo st often in euro, most often in [NATIONAL CURRENCY], oras often in euro as in [NATIONAL CURRENCY] when it concerns:

a) Exceptional purchases such as the purchase of a car or a house for example% by country

Source:

F L A S H E B 1 9 3

Septem ber 2006

GALLUP

7 5 74

69 67 67 60 60 58 5750 49

43

3

1612

11 16 1721

159

2128

2140

7 8 1420

16 16 1826

31

22 2230

17

1 1 1 2 1 1

91

0%

10%

20%

30%

40%

50 %

60%

70%

80%

90%

100%

IE FI LU AT FR EL ES BE NL EU12 IT DE PT

Most often in euro As often in euro as in [NATIONAL CURRENCY] Most often in [NATIONAL CURRENCY] DK/NA

Small purchases, 2006

Q2b. To day, when purchasing, do y ou count mentally : most often in euro, most often in [NATIONAL CURR ENCY], o r

as often in euro as in [NATIONAL CURR ENCY ] when it concerns...

% by country

At the country level, for both small and exceptional purchases, the Irish clearly distinguish themselvesfrom all other eurozone countries; small purchases are calculated in the euro by 91% of the Irish and

exceptional purchases by 88%.

In addition to Ireland, the euro is most often used as a benchmark currency for small purchases in

Finland and Luxembourg (75% and 74%, respectively) and as a benchmark currency for exceptionalpurchases in Greece and Italy (41% and 39%, respectively). At the other end of the scale, there arethree countries in which 50% or fewer of the citizens use the euro as a mental benchmark for small

purchases: Portugal (43%), Germany (49%), and Italy (50%).

Focussing on the proportions using previous national currencies, we see that these currencies are used

for calculations in major purchases most often by Belgians (65%), the Dutch (57%), and Austrians(55%). Common purchases are calculated in the previous national currency most often by the Dutch(31%) and Germans (30%).

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page 14

Looking at country results, Ireland has the highest percentage of citizens who still report that makingpayments in the euro instead of their old national currency influences their consumer habits (71%),

and Portugal has the lowest percentage of citizens continuing to report changed spending habits(41%).

We also notice that countries with the same levels of supposed changed consumption habits do not

necessarily have the same proportions of citizens who report specifically buying less or more. Forexample, in both the Netherlands and Italy the percentage of those reporting changed consumer

behaviour is 58%. However, those in Italy are 10 percent more likely to report buying less for fear ofspending too much than those in the Netherlands.

Distinguishing between those who report buying less or more, we find that citizens from Germany andItaly (40% each) report being overly cautious due to difficulties using the euro, while the Irish aremost likely to think that they overspend (44%).

Changes in consumer behaviour, 2006

% y ou buy m ore

as y ou have

difficulty realising

how much y ou

are spending

% y ou buyless as you

fear spending

too much

% Neither one

or the other:

no difference

SEX

Male 25 29 44

Female 25 36 38

AGE

15 - 24 37 34 28

25 - 39 32 31 36

40 - 54 23 32 4455 + 17 34 48

EDUCATION

until 15 years of age 17 39 43

16 - 20 25 34 41

20 + 28 25 46

Still in education 34 35 29

OCCUPATION

Self-employed 24 26 49

Employee 30 30 40

Manual w orker 29 36 34

Not w orking 21 36 42

LOCALITYTYPE

Metropolitan area 29 29 41

Other towns 26 30 43

Rural zones 22 37 40Q7. For five years now all payments have bee n made in euro, some people buy more a s theydon't realise how much they are spending; on the other hand others buy less as they fearspending too much. Which of these two attitudes is closer to yours?

Examining the socio-demographic variables, a variation already observed in 2005 remains noticeable.

Comparing gender, men are more likely to see no difference in their consumption habits (44%compared to 38%), while women are more likely to think that they buy less out of fear of spending toomuch (36% compared to 29%).

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More respondents in the youngest age group (37%) think they buy more than do in the oldest age

group (17%). However, respondents in the oldest age group are more likely to answer that they see nodifference in their consumption habits (48%) as compared to those in the youngest age group (28%).

Looking at the differences between educational groups, we do not see significant disparity, with the

exception of those still studying. However, respondents with a low level of education are more likelyto respond that they spend less in comparison with those with a higher level of education (39%

compared to 25%).

Similarly, there are few differences in relation to place of residence, although citizens living in rural

areas are more likely to report that they spend less than those living in metropolitan areas (37%compared to 29%).

Lastly, almost half of the self-employed respondents think that they have experienced no changes intheir spending behaviour, while 34% of manual workers do hold this opinion. 36% of both manualworkers and those not working report that they continue to buy less out of fear of spending too much.

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page 16

1.5 Correct knowledge of charges for money and banking transactions

across the eurozone

In this last section, we present the results from some questions that measure respondents knowledgeabout bank card use and charges, as well as charges related to bank transfers throughout the eurozone.

Payment systems in the EU are going through a process of integration, with the objective of creating aSingle Euro Payments Area (SEPA) by 2010. One of the key steps in this process was the adoption ofRegulation 2560/2001 of the European Parliament and the Council which establishes the principle of

equality of charges for payments within Member States (national) and between member States (cross-border). The regulation has applied to ATM cash withdrawals and purchases by payment card sinceJuly 2002 and to credit transfers since July 2003.

23

30

27

29

27

34

37

31

51

36

37

40

9/2006

10/2005

11/2004

11/2003

No (correct answer) Yes (incorrect answer) DK/NA

Are there extra fees

... when with drawing mone y in another coun try of the eurozone

Source:


GALLUP

27

35

38

39

25

38

21

30

27

22

16

23

53

35

35

39

59

39

0 10 20 30 40 50 60 70 80 90 100

9/2006

10/2005

11/2004

11/2003

9/2006

10/2005

... when purchasing with bank card elsewhere in the eurozone

Q10. Compared to a similar operatio n done in [COUNTRY], in your opi nion, do you pay supplementary fees?a) When you use your bank card t o withdraw money in another c ountry of the eurozone

b) When you use your bank card to make a purchase in another countryo f the eurozone

c) When you make a banking transfer to another country of the eurozone% EU12

... for bank transfers within the eurozone

Lack of knowledge remains very high with regard to these issues: whether bank card usage for eitherwithdrawal or purchase, or banking transfers across borders within the eurozone is analysed. From2005 to 2006 there has in fact been a decrease in this knowledge.

The majority of citizens in the EU12 countries cannot correctly answer questions about banking fees.More than half of the eurozone citizens do not know if they pay supplementary fees when using a bank

card to withdraw money in another eurozone country (51%), or when making a purchase with their

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bank card in another eurozone country (53%), and 59% have no idea if there are supplementary feesfor making a bank transfer to another eurozone country.

Among those who venture to give an opinion, more or less half think (incorrectly) that there are feesconnected to using a bank card in another eurozone country or for transferring money betweeneurozone countries. There is no change compared to 2005 or to earlier years in this respect. Only a

minority a citizens across the eurozone are aware that there are no fees for using a/their bank card in

another eurozone country or for transferring money between eurozone countries.

35 33 30 30 2923 21 20 18 17 15 12

27 2737

55

27 31

27 38

11 19 20 20 29

36 3830

15

44 4051

41

7 063 63 65

59

37

0%

10 %

20%

30%

40%

50 %

60%

70%

80%

90%

100%

NL BE LU IE AT FR EU1 2 DE IT FI PT ES EL

No (correct answer) Ye s (incorrect answer) DK /NA

Are there extra fees... when withdrawing money in another country of the eurozone, 2006

39 35 33 30 30 28 27 23 22 21 1914

23

2424 28

55

23 2621

10 9 13 17 23

3137 42 39

16

48 46 53

67 69 67 6464

47

0%

10%

20%

30%

40%

50 %

60%

70%

80%

90%

100%

LU NL BE FR IE A T DE EU1 2 FI IT ES PT EL

No (correct answer) Yes (incorrect answer) DK /NA

... wh en purchasing with bank ca rd else wh ere in the eu rozone, 2006

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page 18

Source:


GALLUP

28 28 261 9 19 18 16

1 2 12 11 1 0 9

52

3630

2634 33

5

25 34

16 20 1 628

18

3642

48 48 48

7 7

5954

7 2 69 7 463

30

0%

1 0%

2 0%

3 0%

4 0%

5 0%

6 0%

70%

80%

9 0%

100%

IE LU AT BE NL DE IT EU12 FR FI PT ES EL

No (correct answer) Yes (incorr ect answer) DK /NA

... for bank transfers within the eurozone, 2006

Q10c. Compared to a similar operation do ne in [COU NTRY ], in your opinion, do you pay suppleme ntary fees?c) When you make a banking transfer to another countr y of the euro zone

% bycountry

Respondents are more likely than not to think that it costs them more to withdraw money in anothercountry of the eurozone. In 2006, 27% thought there was a supplementary fee, while 23% believedthat there was no extra charge in such a case. When we asked about extra charges for purchases made

in another country using a bank card, more citizens answer correctly (27%) than incorrectly (21%);this is similar to the results of previous years. The lowest proportion of correct answers is given inresponse to the question of whether or not citizens have to pay supplementary fees when making a

bank transferto another country in the eurozone; only 16% of citizens are aware that they do not haveto pay an extra fee for such a transaction.

It is clear that a general lack of knowledge characterizes citizens throughout the eurozone with regardto the costs of using a bank card in another country of the eurozone or when transferring money

between eurozone countries. In certain countries, such as Italy, Finland, Portugal and Spain, more thantwo thirds of the citizens cannot answer the questions on banking fees. For example, 70% of Italiancitizens do not know if they pay supplementary fees when using a bank card to withdraw money inanother eurozone country, 69% do not know if there are additional charges when making a purchase

with a bank card in another eurozone country, and 77% have no idea whether or not there aresupplementary fees for making a bank transfer to another eurozone country.

Lastly, a brief look at the differences between the percentages of correct answers to these questions inindividual eurozone countries. We find that the Netherlands has the highest percentage of respondentswho know that there are no additional charges when withdrawing money (37%); Luxembourg has the

highest proportion of respondents who know that there are no additional fees connected to bank card

purchases in another eurozone country (47%); and Ireland has the highest percentage of respondentscorrectly stating that money transfers between eurozone countries do not require additional charges

(30%).

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2. Future expectations

In the second chapter we discuss the perceptions of eurozone citizens toward certain policies related tothe changeover and practical use of the euro; we examine dual price displays in shops, thedenominations of euro coins, and the possible consequences of the removal of certain coins.

The summary results show that the majority of citizens in the eurozone do not consider it necessary tocontinue with dual pricing, that they are satisfied with the current selection of euro coins, and that they

tend to believe that the removal of the smallest denominations would increase prices.

2.1 The usefulness of dual price displays

To make sure that Eurobarometer measures this aspect reliably, two different questions were askedabout dual price displays to random halves of the national samples. One question inquired as to

whether people would like shopkeepers to continue displaying prices in the old currency, while the

alternative question inquired as to whether or not people find it useful to have dual price displays.

Source:


GALLUP

Dual price displays are so mething people like

54

60

58

39

44

38

40

3

2

2

2

589/2006

10/2005

9/2006

10/2005

No Yes DK/NA

Q3. It s five years /2006/ since all purchases have been ma de in euro and no longer in [NATIONAL CURRENC Y].

a) Would you like shopkeepers to continue dual price displays?

SPLIT BALLOT A

b) Would y ou say that it is useful for you that shopkeepers extend dual price displays?

SPLIT BALLOT B

% EU12

Dual price displays are use ful for them

Regardless of the question, a clear majority do not want to maintain dual price displays; 58% over39% when asked with regard to preference, and 60% over 38% when the question was more directlytargeted to utility. Support for dual displays has decreased somewhat over the past year; from 44% to

39% for the first question, and from 40% to 38% for the second question.

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page 20

Source:


GALLUP

7469

77 76

6 5

56

68

43

5447

3844

8478

74 74 73 7165 64 6 3

5 853

43 4 1

82

0

20

40

60

80

10 0

NL FI LU IE A T DE EL BE PT EU1 2 IT ES FR

1 0/2005 9/ 2006

Dual price displays are something people like, % ofNo answers

Q3a. It s five/2006/ years since all purchases have been made in euro and no longer in [NATIONAL CURRENCY].

Would you like shopkeepers to con tinue dual price displays?

% by country

SPLIT BALLOT A

Source:


GALLUP

76

6873

6 9

51

65

73

5358

5047

41

84 8276 76 75

68 66 64 6 46 0

5245

4 1

77

0

20

40

60

80

10 0

NL A T LU DE FI PT BE IE EL EU1 2 IT FR ES

1 0/2005 9/ 2006

Dual price displays are something people consider useful for them, % ofNo

answers

Q3b. I ts five years / 2006/ since all purchases have been ma de in euro and no longer in [NATIONAL CURRENC Y].

Wo uld you say that it is useful for you that shopkeeper s extend dual price displays?

% by country

In all but two countries the majority of citizens are not interested in maintaining dual price displays.This is especially true in the Netherlands (84% answered no to both questions) and Luxembourg

(74% answered no to the first and 76% answered no to the second question). The exceptions areSpain and France, where more than half of the citizens are in favour of maintaining the dual pricedisplays. In Spain 41% answered no to both questions, and in France 43% answered no to the first

and 45% answered no to the second question.

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Dual price displays are something people like, % ofNo answers, 2006

SEX

Male 62

Female 54

AGE

15 - 24 63

25 - 39 62

40 - 54 58

55 + 55

EDUCATION


16 - 20 56

20 + 64


OCCUPATION

Self -employ ed 60

Employ ee 61

Manual worker 51

Not working 57

LOCALITYTYPE


Other town s 55

Rural zones 58

Q3 A. It's five years since all purchases have been ma de in euro and

no longer in [NATIONAL CURRENCY]. Would you like

shopkeepers to continue dual price displa ys?

Dual price displays are something useful, % ofNo answers, 2006

SEX

Male 62

Female 58

AGE

15 - 24 62

25 - 39 60

40 - 54 62

55 + 57

EDUCATION


16 - 20 61

20 + 65


OCCUPATION

Self -employ ed 66

Employ ee 62

Manual worker 56

Not working 58

LOCALITYTYPE


Other town s 59

Rural zones 61

Q3B. It's fi ve years si nce all purchases have been made in euro andno longer in [NATIONAL CURRENCY]. Would you say that it is

useful fo r you that shopkeepers extend dual price displ ays?

Differences in support of the dual price displays are also visible within socio-demographic variables.Men are somewhat more likely to accept the idea of ending the dual price displays than women (62%

compared to 54% for the first question, and 62% to 58% for the second question).

More respondents in the oldest age group also tend to support the continuation of dual pricing. Forexample, only 55% of the oldest age category are in favour of ending the dual price system, while 63%of the youngest are no longer interested.

Those with higher levels of education and those still in school are also more likely to accept the ideaof ending dual price displays. While 51% of the least educated respondents think it is not useful toextend them, this opinion is held by 65% of those with the most education.

Comparing occupational groups, manual workers are the least likely to favour ending dual pricedisplays. For example, 10 percent more manual workers than employees would like to continue dual

price displays (51% to 61% negative answers). Manual workers are also the most likely to consider ituseful to maintain dual price displays. However, the difference in opinion between manual workersand those not working is less significant. Self-employed respondents are the most likely to state that it

is not useful to continue with dual price displays (66%).

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page 22

S o u r c e :F LA S H E B 19 3

S e p t e m b e r 2 0 0 6

GALLUP

Cu rrent sel ection of the eu ro coin s

36

4

2

58

36

4

2

53

40

5

2

4

2

58

56

38

Just the right number

Too many

Not enough

(DK/NA)

9/2 006 1 0/2 005 1 1/2004 11 /2003

Q5. Having used eur o coins for five years, do you con sider that

there are too m any or, on the contrary, not enough coins withdiffer ent values or do you consider that there are just the right

n um ber?

% E U 1 2

Citizens of metropolitan areas are less likely to think that dual price displays should be maintained

than those in rural areas and other towns (64% compared to 55% and 58%). However, there are nosignificant differences of opinion between respondents from different types of residence regarding theusefulness of maintaining dual price displays.

2.2 The future of euro coins and banknotes

2.2.1 Current selection of euro coins

More people have difficulties with

euro coins than with the banknotes,and a potential way of simplifyingcitizens lives would be the removal

of the smallest denominations.

Eurobarometer asked citizens in thecurrent eurozone for their opinions on

this matter.

As with the 2005 results, the selection

of the euro coins was generallyconsidered to be adequate. 58% ofcitizens from the eurozone consider

the variety of coins to be sufficient,and a significant minority (36%) wantfewer coins both percentages the

same as in 2005. A negligible numberof respondents express the view thatthey would like to have the selection

of euro coins increased (4%), onepercent less than in 2005.

Source:FLASH EB 193

September 2006GALLUP

80

64 61 58 58 57 5243 39 37 35 33

9 14

3232 36 38 35 45

48 59 61

5264

8 53

2 43

42

61 1

1122 2 2 5 2 1 4 1 3 1 1 1 1

81

0%

1 0%

20%

30%

40%

50 %

60%

70 %

80%

90%

100%

FI DE PT NL EU1 2 FR ES A T EL LU BE IE IT

Jus t t he right numb er T oo many Not enough DK/NA

Current selection of the euro coins, % oftoo many answers, 2006

Q5. Having used euro coins for five years, do you consider that there are too many or, on the contrary, not enough

coins with different values or do you consider that there are just the right number?% by country

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Analytical report, page 23

As in 2004 and 2005, Finland has the highest percentage of respondents who think that there is just theright number of euro coins. In addition, Finland has the second largest percentage of respondents of

the opinion that there are not enough different euro coin denominations (8%). As already explained inthe report of 2004, this result is not directly comparable with the scores for other countries since 1-and 2-cent coins were never introduced in public money transactions in Finland.

Excluding Finland, we find that Germans remain the most satisfied with the number of euro coindenominations (80%, +5 percentage points as compared to 2005), and that Italians are the least

satisfied with the number of denominations (33%, -10 percentage points as compared to 2005).

Against the general trend, there are four countries in which the majority believe that there are too

many differently valued coins; this is true in Italy (64%), Belgium (61%), Luxembourg (59%) andIreland (52%).

2.2.2 Which coins should be removed?

Source:FLASH EB 193

September 20 06

GALLUP

Removal of the euro coins, 2006

82

29

5

4

2

6

9

1

871- cent euro coin

2-cent euro coin

5-cent euro coin

10- cent euro coin

20-cent euro coin

50-cent euro coin

1- euro coin

2-euro coin

[DK/NA]

Q6a. Please indicate whether any of the eur o coin denominations should be removed. If yes, which one or which ones?Base: those who answered th ere are too many" coins with different valu es

% EU12

The respondents who feel that there are too many euro coin denominations were also asked which

denominations they would want removed. We find that 87% would prefer to remove the 1-cent coin,82% the 2-cent denomination, and 29% find the 5 cent coin unnecessary. We also observe that 9% are

in favour of removing the 2-euro coin. With regard to other coins, only smaller proportions favourtheir removal.

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page 24

2.2.3 Consequences of the suppression of small coins

So u rce:

F LA S H E B 19 3

S e p t e m b e r 2 0 0 6

GALLUP

The consequences of the supression of small coin s

2

27

7

62

3

31

4

65

2

28

5

64

Would raise prices

Would lower prices

Would not have any e ffecton prices

(DK/NA)

9/2006 1 0/2005 1 1/2004

Q8. Do you believe that th e suppression of sma ll euro coins (su ch

a s the 1 and 2 cent coins)

% E U 1 2

Supplementing the question of removal of any euro coins, respondents were asked about the expectedconsequences of any such action.

Citizens from EU12 countries have a continued fear of price increases should small coins be removed;almost two thirds of citizens from the eurozone are still of this opinion (64%, +2). This fear is

probably related to the expectation that changes in rounding procedures would lead to higher prices.

Only a minority believe that the removal of small euro coins would have no effect on prices (27%, -4),and a negligible number believe that such a change could positively affect (i.e. lower) price levels(2%, -1). At the EU12 level the results have remained fairly unchanged over the previous two years.

Source:FLASH EB 193

September 20 06

GALLUP

79

70 6 965

596 2

5 954

49

62

5145

79 78 76

6 9 6865 6 4

5 855 54 54 52

44

73

0

20

40

60

80

100

BE FR LU AT ES DE EU1 2 PT IT FI IE EL NL

10/2005 9/ 2006

The consequences of the supression of small coins, % ofwould rise prices answers

Q8. Do you believe that the suppression of small euro coins (such as the 1 and 2 cent coins)% by country

Belgium (79%, +6) is the country with the highest share of respondents fearing a rise in prices as aconsequence of the removal of small euro denominations, followed by France (78%, -1) and

Luxembourg (76%, +6). This ranking corresponds to the results of the previous years, in which therespondents in the same countries were the most sceptical.

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Similarly to earlier results, the Dutch are the least worried about price increases caused by the possible

elimination of some small euro coins (44%, -1).

In 2005, it was reported that all countries experienced a drop in the percentage of respondents fearing

price increases since 2004. Observing the changes in percentages between 2005 and 2006, we do not

see this decreasing trend continuing in all countries. Some countries even experienced an increase inthe percentage of respondents fearing price increases since 2004. For example, the percentage of

respondents fearing a rise in prices increased 6 points in Luxembourg (76% compared to 70% in2005).

2.2.4 New euro coin denominations

Source:


GALLUP

Which new denomination would you like to have besides the current ones, 2006

12

52

8

15

12

25-cent coin

5-euro coin

10-e uro coin

other denomination

(DK/NA)B a s e : t h o s e w h o a n s w e r e d t h e r e a r e "n o t e n o u g h " co i ns w i t h d i f fe r e n t v a l u e s

Q6b. Please indicate which denomination would you like to have, besides those currently in circulation.

Base: those who answered there are "not enough" coins with different values% EU12

In parallel to the questions on the removal of certain euro coins, the respondents were also asked if

they would like certain new denominations to be introduced.

We noticed earlier that only 4% of the citizens from the eurozone consider the variety of coins to be

too narrow. For this group of citizens it is interesting to note that they would be most interested in theaddition of a 5-euro coin.

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page 26

3. Using the euro outside the eurozone

This chapter evaluates how citizens use of the euro when travelling outside the eurozone. We measureto what extent respondents use the euro as a travel currency.

Around one fifth of citizens travelled to a country outside the eurozone: 19% in 2006, 22-22% in 2005and 2004, and 20% in 2003. We found no change from previous years results; the euro continues tobe the most prominent currency used by respondents when travelling outside the eurozone.

Source:FLASH EB 193September 2006

GALLUP

Using the euro outside the eurozone

16

29

2

55

16

27

2

54

15

30

1

29

2

53

52

17

Euro

Dollar

Another cu rrency

[DK/NA]

9/2006 1 0/2005 1 1/2004 11/2003

Q13. During your trip or trips to a c ountry outside the euro zone, what was the main currency that you took wi th y ou?Base: those who went to a country outside the euro zone

% EU12

Respondents who indicate that they had travelled outside the eurozone in the past year are also asked

to indicate the main currency they took with them on the trip. The euro continues to be the mostcommonly used currency in 2006. Today, slightly more than half of those who had travelled to acountry outside the eurozone state that they took euros with them as their main currency (53%).

The dollar is mentioned by 16% of the citizens, while other currencies (presumably those of thedestination country) are mentioned by 29%. The results show great stability over the years.

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Source:


GALLUP

Q13. During your trip or trips to a country outside the euro zone, what wasthe main currency that you took with you?

Using the euro outside the eurozone

Using Euro asmain currency,

by country

64

58

54

53

52

51

50

50

48

45

45

38

72EL

IT

ES

FR

EU12

PT

DE

BE

LU

IE

NL

AT

FI

Comparing the results between countries, we find that the Finnish (38%), the Austrians (45%) and theDutch (45%) are the least likely to rely on the euro when travelling outside the eurozone. Citizens of

Greece care the least to obtain foreign money when leaving the eurozone; 72% answer that they tookthe euro with them. This variation in relying on the euro when going to non-eurozone countries is ofcourse connected to the destinations citizens are travelling to.

Source:

FLASH EB 193

September 2006

GALLUP

58 576 3

5548

5 6 5 552

22

48

40 42

72

64

5 85 4 53 52 51 5 0 50 48

45 4538

65

0

20

40

60

80

10 0

EL IT ES FR EU1 2 PT DE BE LU I E A T NL FI

10/ 2005 9/2 006

Using the euro outside the euro zone, % ofeuros answers

Q13. During your trip or t rips to a cou ntry outside the euro zo ne, what was the main currency that you took with you?Base: those who went to a country outside the euro zone

% by country

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page 28

We found that the results at EU12 level for relying on the euro when travelling to a country outside theeurozone show great stability over the years. Comparing the changes in answers to this question

between countries, we notice that there was about a 5 percentage point decrease in relying on the eurowhen travelling to a country outside the eurozone in some countries (e.g., Italy, Portugal and theNetherlands), while for others we find similar changes in the other direction (e.g., Germany, Belgium,

and Finland). We found that the greatest increase in the number of travellers using the euro in Ireland

(48%, + 26 points).

Source:

FLASH EB 193

September 2006

GALLUP

6458 54 53 52 51 50 50 48 45 45

38

14

14 24

2016 18

141 2

1 729

1 5

911

1222 18

25 2921 33 37

3322

33 4546

2 2 29

2 1 1 27

16

72

0%

1 0%

20%

30%

40%

50 %

60%

70 %

80%

90%

100%

EL IT ES FR EU12 PT DE BE LU IE NL AT FI

Eu ros Dollars Anot her cu rrency DK/NA

Using the euro outside the euro zone, 2006

Q13. During your trip or t rips to a cou ntry outside the euro zo ne, what was the main currency that you took with you?Base: those who went to a country outside the euro zone

% by country

Finally, we look at differences between countries in favouring currencies other than the euro when

travelling outside the eurozone. Local currencies are favoured most by Finnish citizens (46%) andAustrian citizens (45%). They continue to be the ones who most often mention a currency other thanthe euro or the dollar. This could be partly explained by the destinations of travellers from these

countries. For example, Finnish people travel often to their neighbouring countries Sweden andEstonia.

The dollar is most favoured as an alternative by the Irish (29%). We mentioned earlier that we notice alarge increase for the Irish in using the euro when travelling outside the eurozone. This increase cameat the expense of using other currencies, but not at the expense of using the dollar as a currency for

travelling. In 2005, 31% of Irish travellers used the dollar, and 45% used another currency whentravelling outside the eurozone. In 2006, these percentages were 29% and 22%, respectively.

As was stated in 2005, the continuing popularity of the euro as a travel currency could be explained inpart by its stable international status, but also by the ease of using the euro in several countries. Inaddition, there are some new Member States where the euro is already accepted for purchases (for

example, Slovenia and Estonia.

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4. Perceived consequences of adopting the euro

This chapter examines citizens perceptions of the consequences of adopting the euro. In the firstsection, we look at perceived advantages and disadvantages, in the second section, we analysequestions about the perceived effects on price stability and price convergence.

In 2006, the adoption of the euro is still perceived to be positive; however, we notice a decreasingtrend in enthusiasm for it since 2002. The main benefits stemming from the introduction of the euro

are regarded to be cheaper and easier travel, easier price comparisons, and a stronger position ofEurope in the world. On the other hand, citizens almost unanimously blame the euro for increasingprice levels and they do not believe that the euro has contributed to a price convergence between the

eurozone countries.

4.1 Advantages and disadvantages of adopting the euro

In the first section, we look at the perceived advantages and disadvantages of adopting the euro. First,we present results for the overall evaluation of the euros adoption (advantageous overall,disadvantageous overall, or no change). In addition, respondents are asked what reasons they saw for

the advantageous or disadvantageous effects of adopting the euro. We first look at the respondentswho perceive the adoption of the euro to be advantageous, and compare the advantages they see in it.Then, we look at the respondents who perceive the adoption of the euro to be disadvantageous, and

analyse results for the different perceived disadvantages.

4.1.1 Overall evaluation of the adoption of the euro

Advantageousoverall

Disadvantageousoverall

No change DK/NA

September 2002 59% 29% 8% 4%

November 2002 54% 32% 7% 7%

November 2003 52% 36% 5% 7%

November 2004 53% 36% 5% 6%

October 2005 51% 39% 6% 5%

September 2006 48% 38% 7% 7%

In 2006, 48% of the citizens consider the adoption of the euro to be overall advantageous, 7% perceiveno change, and 38% think it is disadvantageous.

Although the adoption of the euro is still generally perceived to be positive in 2006, we notice adecreasing trend in enthusiasm for it since 2002. In 2006, the percentage of citizens recognising the

adoption of the euro as advantageous is the lowest since the first survey was conducted in 2002. In2002, 59% of the citizens reported that the introduction of the euro was overall advantageous. Thispercentage dropped to 53% in 2004 and to 48% in 2006.

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page 30

Source:FLASH EB 193

September 2006

GALLUP

65 64 62 58 55 51 48 46 43 41 38 38

21

1 6 18 2420 26 31 38 44

34

48

43 46

2

1 013 8

1 0 99

76

15

5

98

29 5 6 1 1 11 9 7

5 9 5 1 0 7

75

0%

1 0%

2 0%

3 0%

4 0%

5 0%

6 0%

70%

80%

9 0%

100%

IE FI LU AT BE ES FR EU12 DE PT IT NL EL

Ad van tage ou s ov erall Disadv ant age ou s overall Neithe r one or t he ot he r, no change DK /NA

Overall perception of the adoption of the euro, 2006

Q14a. In your opinion, for [COUNTRY], is the adoption of the euro advantageous ov erall and will stren gthen us for the

future, or rather the opposite, disadvantag eous overall and will weaken us?% bycountry

Looking at individual country reports, the highest percentages of respondents thinking that theadoption of the euro is overall advantageous can be found in Ireland (75%), Finland (65%), and

Luxembourg (64%). At the lower end, meaning countries with the lowest percentage of citizensconsidering the adoption of the euro as overall advantageous, we find Greece (38%), the Netherlands(38%) and Italy (41%).

Focussing on the percentages of citizens who consider the adoption of the euro disadvantageous, wesee that Italy (48%), Greece (46%), Germany (44%) and the Netherlands (43%) have the highest

percentages of respondents who consider the introduction of euro overall disadvantageous.

And finally, focussing on the percentages of citizens who perceive no change from the adoption of the

euro for their country, we find that the Portuguese have the highest percentage (15%). AlthoughPortugal was among the countries with a rather low percentage of citizens considering the adoption tobe advantageous, this did not mean that it also had the highest percentages of citizens finding the

adoption of the euro disadvantageous, but rather corresponded with a high number of citizens seeingno change.

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Source:


GALLUP

67

77

54

68

61

57 5147 45 43

39 38

75

65 64 6 2

58 55 5148 46

43 4 13 8 3 8

72

0

20

40

60

80

10 0

IE FI LU A T BE ES FR EU12 DE PT IT EL NL

1 0/ 2005 9/2006

Overall perception of the adoption of the euro, % ofadvantageous overall

answers

Q14a. In your opinion, for [COUNTRY], is the adoption of the euro advantageous overall and will strengthen us for th e

future, or rather the opposite, disadvantageous overall and will weaken us?% by country

At the EU level, we notice a decreasing trend in enthusiasm for the adoption of the euro since 2002.

However, looking at the changes in enthusiasm at the country level between 2005 and 2006, we notice

a decrease in some countries, but an increase in other countries. For example, Luxembourg andBelgium show a significant decrease compared to last year in the percentage of the respondents whoconsider the adoption of the euro overall advantageous (-13 and -10 percentage points, respectively).

Austria, on the contrary, is characterised by an increase of 8 percentage points in enthusiasm about theadoption of the euro.

Overall perception of the adoption of the euro, % ofAdvantageous overall answers,

2005 and 2006

10/05 9/06

SEX

Male 58 56 -2

Female 44 40 -4

AGE

15 - 24 57 60 +3

25 - 39 53 51 -2

40 - 54 51 45 -6

55 + 46 43 -3

EDUCATION

until 15 y ears 38 32 -5

16 - 20 50 44 -4

20 + 67 62 -5

Still in education - 63.2 -

10/05 9/06

OCCUPATION

Self -employ ed 54 52 -2

Employ ee 56 55 -1

Manual worker 47 38 -9

Not working 48 45 -3

LOCALITYTYPE

Metropolitan area 57 54 -3

Other town s 48 50 +2

Rural zones 48 44 -4

Q14a. In y our opinion, for [ COUNT RY], is the a doption ofthe euro advantageous overall and will strengthen us forthe future, or rather the opposite, disadvantageous

overall and will weaken us

When looking at the socio-demographic variables, we again find a similar pattern. In comparison to

women, men more often see the adoption of the euro as overall advantageous. The same is true for theself-employed and employees compared to manual workers and those not working, and forrespondents living in a metropolitan area compared to those living in a rural zone. The younger and

the more educated the respondents think in higher numbers that the adoption of the euro isadvantageous.

Looking at the changes in percentages between 2005 and 2006, we find that support for the eurodecreased in all socio-demographic categories, except in the age group between 15 and 24 years of age

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page 32

and for respondents living in towns; in these categories support for the introduction of the euroincreased by 3 and 2 percentage points, respectively. In addition, the decrease in the percentage of

respondents seeing the adoption of the euro as overall advantageous is the largest for manual workers(-9 percentage points).

4.1.2 Advantages of the adoption of the euro

Source:


GALLUP

Advantages of the euro

30

27

11

5

5

4

19

9

39

27

23

9

4

4

4

32

9

46Travels abroad less costly , easier to travel

Easier to compare prices

Reinforce the place of Europe in the w orld

More stable prices

Sounder public finances

Improv e growth, employment

Lower interests rates, less debts charges

Other

(DK/NA)

9/2006 1 0/2005

Q1 4b. In your opinion, what are the main advantages of the adoption of the euro for [COUNT RY]?Base: those who believet hatjoining theeurozone wasadvantegous overall for theircountry

% EU12

Respondents who perceive the adoption of the euro to be advantageous see three main advantagesstemming from the euros introduction: easier and cheaper travel (46%, +5 percentage points), easier

price comparisons (30%, +3 percentage points), and the reinforced status of Europe in the world (27%,+4 percentage points). These three concerns were the most important also in 2005, but they all showsome increase in 2006. Every tenth citizen emphasizes more stable prices (11%, +2 percentage points).

Sounder public finances, lower interest rates, and improvements in economic growth and employmentare not really considered to be important advantages of introducing the euro.

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4.1.3 Disadvantages of the adoption of the euro

Source:


GALLUP

19

7

5

5

3

2

1 5

7

78

12

7

5

7

2

3

18

8

81Prices increase

Complicates ev ery day life

More unemploy ment, less growth

Loss of sover eignty

Loss of competitiv eness

Generates too low interest rates

T oo rigid for public spending

Other

(DK/NA)

9/2006 10/2005

Q14b. In your opinion, what are the main disadvantages of the adoption of the euro for [COUNTRY]?Base: those who believet hat joining thee urozone was disadvantegous overall fortheircountry

% EU12

Disadvantages of the euro

Citizens who see disadvantages in adopting the euro almost unanimously agree that the main

disadvantage is the increase in prices (81%, +3 percentage points). A view far less prevalent but stillmentioned by nearly a fifth of citizens is that the introduction of the euro complicates everyday life(19%, +7 percentage points). Also 7% (unchanged from 2005) think that the euro is a cause for

increased unemployment and decreased economic growth. Other disadvantages of the introduction ofthe euro mentioned by the respondents are loss of sovereignty, loss of competitiveness, low interestrates or the rigidity of public finances; however, these disadvantages are mentioned by less than 5% of

respondents.

4.2 Perceived effect on prices

In this section, we look at respondents opinions on how the euros introduction in their country has

affected price developments and price harmonization.

4.2.1 Price stability and the adoption of the euro

Respondents widely believe that the euro has had a negative effect on prices. Nearly all citizens (93%)state that the euro has added to the increase of prices (this view has not changed compared to 2005).

Another 5% of citizens say that the euro has had no impact on prices, and only 1% says that the eurohas limited the increase of prices (both are unchanged compared to 2005).

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page 34

Source:FLASH EB 193

September 2006

GAL LUP

97 96 96 93 91 91 90 90 88 88 86

7 1

11

1 2 1 1 1 1 3

12

2 2 3 2 5 7 5 8 8 7 8 912

1 2 3 1 2 2 2

97

4 511 1 1

0%

1 0%

20%

30%

40%

50 %

60%

70 %

80%

90%

100%

EL ES IT FR EU1 2 FI NL DE LU BE AT PT IE

Ad ded t o th e increase of prices Limite d the increas e of price s No imp act on p rices DK/NA

Effect of euro on price stability, 2006

Q9. Concerning the evolution of prices for the last five years, would you say that the euro has?% bycountry

At the EU12 level respondents widely believe that the euro has had a negative effect on prices. This isalso the case at the country level; an overwhelming majority in each country of the eurozone consider

that the euro has had a negative effect on prices.

We find the highest percentages of citizens who think that the euro had added to the increase of prices

in Greece and Spain (97% for both countries). 96% of the citizens share this opinion in Italy andFrance. At the low end, we find Ireland, where 71% of the citizens say that the euro has added to theincrease of prices in the past five years.

Price stability, % of

euro added to the increase of prices

answers, 2005SEX

Male 92

Female 95

AGE

15 - 24 91

25 - 39 94

40 - 54 94

55 + 93

EDUCATION

until 15 y ears of ag e 9516 - 20 94

20 + 93


OCCUPATION

Self -employ ed 92

Employ ee 94

Manual worker 95

Not working 93

LOCALITYTYPE


Other town s 94

Rural zones 94

QUESTI ON: Q9. Concerning the e volution of prices forthe last 5 yea rs, would you say t hat the euro has ...?

Given the wide perception that the euros introduction has led to an increase of prices, the socio-demographic analysis does not add to our knowledge on this matter.

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4.2.2 Price convergence and the adoption of the euro

Source:

FLASH EB 193

September 2006

GALLUP

Effect on the harmonisation of prices

45

23

31

53

16

31

51

19

21

32

29

50

Yes

No

(DK/NA)

9 /2 006 1 0/2 005 1 1/ 2004 11 / 2003

Q11. After five / 2006/ ye ars of using the euro, do you believeyes or no that the eur o:

b) Reduced price differences between countries in the Eur o% EU12

45% of citizens also mention that they do not believe that the euro has contributed to a priceconvergence between the eurozone countries. This percentage, however, is lower than in 2005 (53%, -

8 percentage points). Whereas the proportion of respondents believing that the euro reduced pricedifferences is almost unchanged (32% in 2006, 31% in 2005), the percentage of those who cannotanswer the question increased (23%, up from 16% in 2005).

Source:


GALLUP

54 52

59

485 2 52 50

534 7 45

36

5453 5 1 5 1 5 0 48 47 47 45 45

3732 31 3 0

6 0

0

20

40

60

80

10 0

DE LU EL FR PT BE NL AT EU1 2 IT ES FI IE

1 0/ 2005 9/2006

Effect on the harmonisation of prices % ofNo answers, 2005-2006

Q11. After five / 2006/y ears of using the euro, do you believe yes or no that the euro:b) Reduced price differences between countries in the Euro

% by country

Similarly to the 2005 research results, Germany has the highest number of respondents who doubt thatthe euro reduced price differences (53%, -7 percentage points), followed by Luxembourg (51%, -3percentage points), Greece (51%, -1 percentage point) and France (50%, -9 percentage points).

Finland (31%, -5 percentage point) and Spain (32%, -13 percentage point) continue to be the countrieswith the fewest respondents who are in doubt on this matter. However, in 2006, Ireland had the lowestlevel of respondents who doubt that price differences have decreased in the eurozone. We found that

only 30% of citizens in Ireland believed that the adoption of the euro has not lead to a decrease in

price differences; this is down 24 percentage points from 2005.

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page 36

Price convergence, % o fyes answers, 2006

SEX

Male 37

Female 27

AGE

15 - 24 4225 - 39 32

40 - 54 31

55 + 28

EDUCATION


16 - 20 30

20 + 37


OCCUPATION

Self -employ ed 40

Employ ee 33

Manual worker 33

Not working29

LOCALITYTYPE


Other town s 34

Rural zones 30

QUESTION: Q11b. After five years of using the euro, doyou believe y es or no tha t the e uro reduce d pricedifferences between countries in the Eurozone

When it comes to socio-demographic categories, it can be noted that men, respondents between 15 and24 years of age, respondents with higher educational levels, and self-employed respondents are mostlikely to believe that the euro has led to a decrease in price differences between countries in the

eurozone.

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5. The international role of the euro and European identity

In this chapter, we present citizens perceptions about the euro as an international currency, and theirknowledge and concerns about the euro/dollar exchange rate. In the last section the development of aEuropean identity is examined.

The euro has maintained its perceived status as an international currency, and we see in fact anincreasing trend in this perception since 2003. Most people do not care about the conversion rate, but

the majority are aware that the euro is worth more than the US dollar. Most citizens in the eurozone donot think that the euro has had any effect on their sense of being European.

5.1 International status of the euro

Source:

FLASH EB 193

Sep tember 2006

GALLUP

International status of the euro

18

8

73

23

4

72

23

5

7

74

68

25

Yes

No

(DK/NA)

9/2006 10/2005 1 1 /2004 1 1/ 2003

Q11. After five / 2006/ years of using the euro, do you believe yes or no that the euro:

a) Has become an internation al currency like the dollar or the yen

% EU12

The euro has maintained its perceived status as an international currency, and we see a slightlyincreasing tendency in this perception since 2003. In 2006, three quarters of citizens in the eurozone

see their currency as an international one comparable to the US dollar or the Japanese yen (74%, +1).

Compared to 2005 (or previous years), significantly fewer respondents disagree with the statement that

the euro has become an international currency like the dollar or the yen (18%, compared to 23% in2005).

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page 38

Source:FLASH EB 193

September 20 06

GALLUP

85 83

7579

9083

7673

82

70 6966

84 83 8380 79 78 78 78

74 74 71 71 70

82

0

20

40

60

80

100

ES LU EL NL AT IE BE PT EU1 2 FI FR DE IT

1 0/2005 9 /2 006

International status of the euro, % ofyes answers, 2005-2006

Q11. After five / 2006/ ye ars of using the euro, do you believe yes or no that the euro:a) Has become an international currency like the dollar or the yen

% by country

The highest percentages of those who recognize the international status of the euro are found in Spain

(84%), Luxembourg (83%) and Greece (83%), while the lowest numbers are found in Italy (70%),Germany (71%), and France (71%). In 2005, the Irish were the most convinced of the internationalstatus of the euro, however, the percentage of Irish who feel this way dropped from 90% in 2005 to

78% in 2006 (-12 percentage points).

The euro as an international currency, % ofyes answers, 2006

SEX

Male 82

Female 67

AGE

15 - 24 80

25 - 39 76

40 - 54 73

55 + 72

EDUCATION


16 - 20 73

20 + 82


OCCUPATION

Self -employ ed 82

Employ ee 77

Manual worker 72

Not working 71

LOCALITYTYPE


Other town s 76

Rural zones 72

Q19. Generally speaking, does the value of the euroaga inst the dollar concern y ou: a lot, a litt le or not at all?

In the socio-demographic analysis, there is a continuation of the patterns detected in previous years.

Men are more likely to support the statement that the euro is an international currency than women(82% compared to 67%). This is also the case for respondents who are self-employed or employees incomparison to the other occupational groups. This is also the case comparing those who live in more

densely populated areas with those in rural zones. The younger the respondent or the higher he or sheis educated, the more likely he or she is to be in support of the statement.

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5.2 The euro/dollar exchange rate

5.2.1 Concerns about the euro/dollar exchange rate

Concerned about euro-

dollar exchange rate A lot / a little Not at all

01/2002 49% 47%

03/2002 49% 46%

05/2002 46% 49%

09/2002 45% 49%

11/2002 42% 52%

11/2003 39% 54%

11/2004 44% 51%

10/2005 42% 55%09/2006 32% 61%

In 2006, almost two thirds of the citizens in the eurozone are not concerned about the euro/dollarconversion rate (61%); this figure is up 6 percentage points compared to 2005. The percentage of

those claiming to be not at all concerned about the exchange rate shows a trend of increase since 2002.

A third of respondents are concerned a lot or a little (32%, 10 percentage points less than in 2005).

Source:


GALLUP

16 16 12 9 7 9 7 4 4 7 7 4

3431

2526 28 29 23 23

24 21 18 1 714

42

45 5353

61 6261

5264 72 70 74

75

49 6 9

2 2 71 8

83 5 3 7

20

0%

10%

20%

30%

40%

5 0%

60%

70%

80%

90%

100%

IE ES EL PT LU FR EU1 2 IT FI BE AT DE NL

A lot A lit tle Not at all DK/NA

Concerned about the euro / dollar exchange rate

Q19. Generally speaking, does the value of the euro against the dollar concern you: a lot, a little or not at all?% by country

Citizens are most concerned about the exchange rate in Ireland (54%), Spain (47%) and Greece (41%).

Those who seem to be the least concerned reside in the Netherlands (75%), Germany (74%) andBelgium (72%).

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page 40

Source:


GALLUP

6258 60

62

5 5 5448

4348

4541

54

75 74 72 7064 62 61 6 1

53 53 524 5

4 2

70

0

20

40

60

80

10 0

NL DE BE A T FI FR EU1 2 LU PT EL IT ES IE

1 0/2005 9/ 2006

Conce rn about the euro / dollar exchange rate, % ofnot concerned at all answers

Q19. Generally spe aking, does the value of the euro against the dollar concern you: a lot, a little or not at all?% by country

The largest changes within the country analysis in the percentage of respondents reporting that theyare not concerned at all about the euro/dollar exchange rate are found in Belgium and Ireland. In

Belgium, the overall percentage of respondents not concerned at all increases 14 points (72% in 2006,compared to 58% in 2005), while in Ireland the percentage decreases by 12 points (42% in 2006,compared to 54% in 2005).

Concern about the euro/dollar exchange rate, % ofnot concerned at all answers, 2006SEX

Male 59

Female 63

AGE

15 - 24 68

25 - 39 61

40 - 54 59

55 + 61

EDUCATION


16 - 20 65

20 + 57


OCCUPATION

Self -employ ed 53

Employ ee 60

Manual worker 66

Not working 63LOCALITYTYPE


Other town s 60

Rural zones 64

Q19. Generally speaking, does the value of the euro

aga inst the dollar concern y ou: a lot, a litt le or not at all?

Looking at socio-demographic results, it becomes clear that the youngest age category is the leastconcerned about the euro/dollar exchange rate; they have the highest percentage of those notconcerned at all about the exchange rate (68%). This low rate of concern is also found among those

who completed full-time education between 16 and 20 years of age, manual workers and those livingin rural areas. In contrast, self-employed respondents are the most concerned about the exchange rate;they have the lowest percentage of those not concerned at all about the exchange rate (53%).

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5.2.2 Knowledge of euro/dollar exchange rate

Source:FLASH EB 193

September 2006

GALLUP

Value of the euro against the US dollar

21

17

14

49

23

18

9

48

21

21

10

28

1 2

48

35

25

one euro is wort h more than

one dollar

one e uro is worth less t han one

dollar

one euro has an equivalentvalue to one dollar

(DK/NA)

9/2006 1 0/2005 1 1/2004 11 /2003

Q18. From what you know, would you say that today one euro is worth more, less or is equivalent to one dollar:..?% EU12

The level of awareness of the euro/dollar exchange rate remains stable; we found no significantchanges

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