Is the euro currency, which is celebrating its 20th anniversary, the cause of a surge in prices?


Almost twenty years ago, on January 1, 2002, the euro currency made its appearance. Since its introduction, it has been the subject of many debates, in particular on the evolution of prices over the years. The regional daily Ouest France then asked the question, Saturday, December 25, based on figures from the National Institute of Statistics and Economic Studies (Insee).

Between 2002 and 2020, prices increased by 26%. That is an average increase of 1.4% per year. “This is significantly lower than the average rate, from the post-war period until the mid-1980s (+ 10% per year on average),” writes INSEE. It is also a little less than during the fifteen years preceding the changeover to the euro when prices had increased by 2.1% per year. “We have not seen a general acceleration in prices following the changeover to the euro,” says Sébastien Faivre, head of the consumer prices division at INSEE. For economist Anne-Laure Delatte, “we even lacked inflation in recent years, which reflected a lack of dynamism in the economy”.

Strong distrust of the euro

Households, on the contrary, had the feeling of a surge in prices. Until 2013, those questioned by INSEE were more and more numerous to worry about it. “The arrival of the euro gave rise to a temporary waltz of labels”, analyzes Christian de Boissieu, professor emeritus at Paris 1, with the newspaper Ouest France. Prices have often been rounded up to the next unit, which explains the distrust of money. “The rounding effect was clearly bullish for frequently purchased products such as bread, pastries or coffee,” notes INSEE.

The daily also questioned the price of the baguette. In 2002, the latter suffered the inflationary effect of the changeover to the euro, with an increase of 3%. But this outbreak did not last. For twenty years, the price of the baguette has increased by 1.6% on average per year. It is slower than in the ten years preceding the euro. If the indicators show that the euro has not necessarily had a long-term effect on prices, the feeling is quite different.

>> To read also – Inflation: will the price of the baguette increase in supermarkets?

“The increased divergence between measurement and perception could result from what households have kept anchored in their memory the last known price in francs”, tries to analyze the Institute. “For the baguette, for example, they would tend to compare its current price, 90 cents on average, to its last price in 2001, or 4.40 francs, the equivalent of 67 euro cents”, adds. he. “By nature, this gap is growing over the years. Such anchoring in time is only likely to occur on the occasion of a change of currency. ”

On current inflationary pressures, professor emeritus Christian de Boissieu explains it by shortages of raw materials, the price of energy or also by the lack of housing. “But” there is no connection with the euro ”, He concludes.

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