Euro is now part of Dutch life

Euro is now part of Dutch life

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Has the euro made life in the Netherlands more expensive? Will it last? A reflection on ten years of the new Dutch currency.

Ten years ago, the euro was introduced in 11 European countries, including the Netherlands - first for inter-bank business, and four years later as hard currency for the population as a whole. It was designed to promote price stability within the European Union. In 2009, 16 countries are in the eurozone, with Sweden and Iceland considering the currency's introduction. Critics, however, still maintain that life in the Netherlands has become more expensive since the euro was introduced.

Immediately after the introduction of the euro, the Dutch were able to get used to the new currency. Prices were given in both euros and the old currency, the guilder. There are still people who convert prices to see how much they are paying. A customer at a Dutch market complains:

"A cauliflower was a guilder, now they're one euro each. That's the equivalent of two guilders twenty cents. Everything's became more expensive."

Price rises

Ten years ago, Economist Arjo Klamer was highly sceptical about the introduction of the euro, but now he says:

"Looking back, I think it's gone really well with the new currency".

He thinks it a shame that the Netherlands has not carried on giving prices in both the old and new currencies, as is still the case in France. Consumers are quick to feel they have been swindled but this, he feels, is only part of the picture:

"Part of it is how you feel about it all. A soused herring now costs one and a half euros; the price used to be one and a half guilders. That's over twice as much. The same goes for rolls. These prices have gone up, but others haven't. Take computers and cars. Here, converting the prices was done properly. So, the idea that everything went up is wrong."

"The Dutch were swindled"
Part of the euro price rise was down to inflation, but André ten Dam, from the Short-Change Society (Stichting Wisselverlies), maintains that the Dutch were swindled and that the guilder was given away on the cheap:

"In 1999, the exchange rate from the guilder to the euro was wrong. Independent research by various banks shows the Netherlands' national currency was valued 13 percent too low. We're still suffering the consequences today. Our purchasing power was diminished."

The Short-Change Society is fighting for rectification of the euro exchange rate. It is taking the issue to the European Union and will go as far as the European Court if necessary.

Financial Crisis
Mr ten Dam, however, still thinks the introduction of the euro in general was a good thing:

"With the euro, we make up a stable monetary bloc, which is able to withstand a knock. If you look at the UK, which refused the euro a decade ago, you see the pound is down about 30 percent against the euro."

Future euro
Mr Klamer has got used to the euro, but does not think it will last:

"I don't think the Netherlands will have the euro in a hundred years' time. You never know what's going to happen in international politics. And managing the euro will become increasingly difficult as more countries join the eurozone."

Nobody knows how long the euro will last. Very young Dutch shoppers have only ever known the euro. They at least do not feel the urge to convert prices to guilders.

6 January 2009

Saskia van Reenen and Belinda van Seijn*

* RNW translation (mw)

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