On January 1, 2002, euro coins and banknotes officially took the place of francs in the French wallet (and in twelve European countries simultaneously). Would you still be able to convert some emblematic values or prices of our daily life in 2022 into francs? And if we also applied inflation to francs, not just the euro …
It was the big surprise of the poll commissioned by MoneyVox YouGov to mark the 20th anniversary of the entry into circulation of euro coins and banknotes: more than one in two French people (51% to be exact) still occasionally convert into francs. Precision of importance: occasionally and not systematically since only 5% of the people questioned always make this calculation.
However, it has been more than 20 years that the euro has been visible, and a fixed value since January 1, 1999. From 1999 to 2001, the francs were still in the wallet of the French, but financial exchanges were already made in euros , and the rule was in shops with a dual franc / euro display just to get used to this conversion.
As a reminder, the conversion value is as follows: 1 euro = 6.55957 francs. And here is the most convenient mnemonic rule: 100 francs for 15euros about. But is converting like this using this formula still relevant? Knowing that if we keep certain prices in francs in memory, these are costs that have been in effect 20 years earlier. However, even if the franc had remained the daily currency, this would not have prevented inflation, as several economists explain in the article below.
20 years later, has the euro reduced your purchasing power?
Worse, counter-intuitively, the rise in prices has been less in France since the arrival of the euro: On average, since the launch of the euro, French inflation has been much lower than it was before. , in the time of the franc, explains Eric Dor, director of economic studies at the IESEG School of Management. From January 1956 until the launch of the euro on January 1, 1999, average inflation was 5.7% in France. Since the launch of the euro, from January 1999 to November 2021, average inflation has been 1.3% in France according to the national consumer price index.
Gross conversion … or with inflation
Let’s move on from the concrete. Here are some prices, incomes or emblematic amounts of our daily life, in 2022, and their theoretical value in francs … by applying on the one hand a gross, mathematical conversion, and on the other hand by taking into account inflation including for francs using the Insee franc-euro converter (2002 vs 2020 conversion).
Baguette. It rates on average 90 euro cents currently. In francs, that would all the same 5.90 FF if we apply the formula 1 euro = 6.55957 francs. And by correcting currency erosion, by comparing today’s euros to the francs of the time? Taking into account the currency erosion due to inflation, the purchasing power of 0.90 euros in 2020 is therefore the same as that of 4.67 francs in 2002, explains INSEE. One franc less than with a basic conversion! As for the question of the evolution of the price of the baguette since the arrival of the euro, the following article shows that it has climbed less quickly than the minimum wage.
The euro is 20 years old: has the price of the baguette soared?
Cinema ticket. You want to go see Matrix Resurrections this weekend the UGC des Halles Paris? 13.50euros instead, at full price. In francs, that would be almost 90 FF (88.55 exactly), and 70 FF by correcting this conversion of currency erosion. But this high price is more due to the price evolution of the big cinema brands more than the average evolution of the cinema ticket, in fact more moderate.
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Net minimum wage. Following the last automatic revaluation, the monthly net minimum wage is 1,269 euros (1,603 euros gross) on January 1, 2022. In francs, this would amount to 8,324 FF, but only 6,581 FF net (8,313 FF gross) according to INSEE by applying inflation . There, the comparison is very precarious but, in fact, in 2001 the gross monthly minimum wage was 7388 FF.
Median salary. The median net salary of private employees (50% earn more, 50% earn less, differentiating from the average salary) is 1940 euros. In francs, this would give 12,726 FF, but in reality only 9,874 FF taking into account the currency erosion due to inflation.
Real estate price. According to the FNAIM, a house is currently being bought for 348,000 euros on the outskirts of Strasbourg. In francs, this gives 2.28million FF, and 1.8million francs by correcting for inflation. There, house prices really skyrocketed. But this is another story.
Real estate price: how many m2 have you lost in the big cities?