A Currency Experiment Tests People’s Patience

For six months, Adrienne Fougere, who is standing outside the Casino grocery store on a bright spring afternoon eyeing the strawberries, has been part of a great economic experiment. And the 72-year-old retired shopkeeper is confused.

“There are a lot of pros and cons in this euro business, especially for older people like me who can’t get their bearings,” Fougere says.

The plastic trays of plump, red Spanish-grown fruit she is looking over are priced both in French francs (9.90 francs for 500 grams--$1.49 a pound), and in the still unfamiliar money that is going to replace francs, the euro.

“I only look at the franc number,” confesses Fougere. The amount in euros--1.51 euros for 500 grams of berries--still means nothing to her, she says.

Since October, more than 100 stores in this quaint market town in the Perigord region of southwest France have been putting price tags in both francs and euros on many of their wares. The experiment, spearheaded by the town’s dynamic and European-minded Citroen dealer, is only the leading edge in what is shaping up as the most ambitious venture in applied economics since the free market supplanted communism in Eastern Europe and the former Soviet Union: teaching 290 million people in 11 countries of the European Union how to use a new and shared form of money.

“The positive side of it is, my clientele is starting to say, ‘The euro is going to be here in 3 1/2 years: What are we going to do about it?’ ” sums up Francois Chevalier, manager of the Casino in Sarlat’s main shopping street, the Rue de la Republique. “But the oldest people are reacting the worst, and some of them even tell me, ‘I hope I’m dead before this all comes to pass.’ ”

It is not only old folks in this town of 10,000 who are having a hard time internalizing the value of the new money. “I look at the prices in euros, and I feel nothing inside yet,” said Dominique Gouzy, the 45-year-old secretary at the Chamber of Commerce’s information bureau.

“We have no experience, because up until now, we haven’t held the money in our hand. We’ve had the feeling that it’s like playing,” is the explanation from a 49-year-old saleswoman at Lou Perigord, a shop selling goose liver pate, sweet Monbazillac white wine and other regional delicacies.

Nelly Gervais, a 50-year-old pharmacy clerk, also admits to ignoring the euro price tags, but she believes she’ll need just two days to get used to the money--the same time it takes her in Spain or another country to get comfortable in a strange currency.

“I just need to calculate the coefficient” to convert from francs to euros, she says briskly. “If I’m right, I should multiply by 3 and divide by 2.” In fact, her method yields a result too large by a factor of 10.

To cope with the euro, many people in Sarlat say they plan to buy one of the special currency-converting calculators now being manufactured for sale. As are people throughout the euro zone, the residents of Sarlat are also being exposed to publicity campaigns meant to drive home what a euro is worth.

Getting the message may take a while. Many French, including members of the younger generation, still do their mental reckoning in “old francs,” the money abolished nearly 40 years ago that was worth 1/100th of the “new” franc currently used.

Consumer advocacy groups across Europe are also worried that the new money will tempt some merchants to gouge bewildered customers or that there will be widespread “euro creep”--a rounding up of prices when converted to the new currency.

Because of Sarlat’s experiment, one of several in France, Italy, Germany and other euro countries, merchants here have extracted important, sometimes disturbing conclusions, which they recently forwarded in a report to European Union bureaucrats in Brussels.

For instance, at the Parfumerie La Boetie, owner Magdeleine Veber wonders how she is going to fit both euro and franc prices on standard-size stickers.

The euro, like the U.S. dollar, is subdivided into 100 cents. The problem is that the word “cent” is pronounced the same as the word for “one hundred” in French. That could confuse both merchants and customers.

Then there are the eight kinds of coins, which will have a common face. Each of the 11 euro countries, though, will put its own design on the flip side, meaning there will be 88 varieties. Will the Germans and Dutch among the 500,000 tourists visiting Sarlat annually insist on getting change in their country’s coinage? Or, to put it differently, will shopkeepers need cash drawers with pigeonholes for 88 types of coins?

However, it is the six-month transition period beginning Jan. 1, 2002, when bills and coins in both national currencies and in euros will circulate, that merchants in Sarlat most strenuously object to. They don’t want to have to do cash transactions in two different kinds of money simultaneously or keep two sets of accounting records and two cash registers.

In Germany, the retailers association estimates a “big bang” changeover, perhaps over a long weekend, would cost little more than half the $17 billion that will be required to operate German stores in two currencies over the half-year now planned.

“Either we’ll understand the euro in three years, or we won’t, and it’s not six more months that will make the difference,” declares Christian Salive, the affable owner of the Sarlat Citroen dealership who heads the municipal merchants association and is the driving force behind the euro experiment here.