Twenty years later, the impression persists that the euro pushed prices up

“With 100 German marks you filled the shopping cart. Now with 100 eurosIt’s not even enough for two bags, ”says Maria Napolitano in Frankfurt.

Like many Europeans, this Italian-born woman still thinks that the euro made prices rise, despite the fact that official statistics do not support it. “The euro is catastrophic,” says Napolitano.

It was 20 years ago but Víctor Irún, a 53-year-old Spanish teacher, remembers the feeling that the country had “entered a club of rich people and we still did not have the right clothes to enter.”

The feeling was “that we weren’t ready to do it yet,” explains this Madrid neighbor. “It was as if we paid with Dutch or French money, and we lived like in Spain.”

In Germany, the single currency was called at the time the “teuro”, a play on words between the euro and “teuer”, “expensive” in German.

Perception and statistics

The German university professor Hans Wolfgang Brachinger already spoke in a 2006 study about the increase in the index of “perception” of the rise in prices by German citizens, by 7% between 2001 and 2002 when it was normally 2%. Except that the statistics of the time do not show an acceleration of inflation in Germany.

“There was a strong feeling that prices had risen, but despite everything the statistics tell us otherwise”, recalls Giovanni Mastrobuoni, professor of economics at the University of Turin, author of a detailed study on the subject.

To illustrate his words, he collected the prices of various day-to-day products in the euro zone: cheap products rose in price with the currency exchange because of the “roundings” that traders did, usually above the old price. It is in these types of products that the outrage of Europeans is centered.

Among them, fruits and vegetables, drinks and food in restaurants and cafes, bread … “Products that we consume every day, which, although they do not cost much, shape that perception because they are the most common transactions”, explains Mastrobuoni .

In France, coffee only rose unexpectedly between the end of 2001 and the beginning of 2002, according to the National Institute of Statistics (INSEE), going on average from 1.19 euros to 1.22 euros.

Price drops

This phenomenon occurred more in those countries where the distribution sector was less concentrated, according to Mastrobuoni, since small merchants had more freedom to raise prices. This “mechanical” rise due to the change to the euro was between 0.1% and 0.3%, calculated the European Commission.

But the general inflation statistics were not affected as the most expensive products did not rise in price. There were even some that fell due to increased productivity.

The twelve largest economies in the euro zone had inflation that stood at 2.3% in 2001 and 2002, according to the European statistics office Eurostat. And, despite reaching 2.8% and 3.6% in 2001 and 2002, respectively, in Spain, it remained stable in most countries, even declining in Belgium, Germany, Luxembourg and the Netherlands.

To understand the unequal perception of prices, it is important to study the “profiles” of consumers, says Pierre Jaillet, researcher at the Jacques Delors European Institute: “The average consumption basket corresponds to the budget of a middle-class household living in a city. There is little chance that it matches that of the majority of consumers. “

The most disadvantaged categories, who spend a good part of their salary to buy food products, could feel affected, indicates Jaillet, who also explains that, in general, consumers remember price increases more than decreases.

Belgian economist Philippe Defeyt considers, for his part, that the strong increase in petroleum products and fruits and vegetables in the months prior to the entry of the euro (not attributable to the single currency) contributed to creating this majority negative perception.