Slovenia sees price rises in euro changeover

Despite several warnings and months of preparations and consumer education campaigns, the recent euro changeover in Slovenia is resulting in price hikes in a number of areas, particularly the provision of services.

A spokesman for the Slovenian Consumers' Association yesterday told The Sunday Times that the association is receiving many reports of abuse by some retailers and shop owners who have taken the opportunity to raise their prices under the changeover.

"The reports we have include steep rises in the price of coffees, drinks, breakfasts and lunches in restaurants, hairdressing and car parking facilities," the spokesman said. "These price hikes are not justified as the euro-changeover process did not in itself raise the prices. We are monitoring the situation and the public is co-operating."

Asked how the association intended to fight this abuse, the spokesman said that a black list of shops and service providers is being published daily in the press as a warning to consumers.

"We are practically telling people to boycott these establishments. The price rises noted are simply not acceptable," the spokesman added.

Slovenia is the first new EU member state to join the euro. Malta and Cyprus are expected to follow in the beginning of next year. A survey conducted by the European Commission a few months ago showed that the majority of Maltese consumers fear price rises with the introduction of the euro.

Technically, the euro changeover in Slovenia last Monday seems to be going according to plan with no particular hitches.

According to the European Commission, after only a few days the euro had already largely replaced the tolar, Slovenia's national currency, and the old banknotes and coins look set to exit circulation well before mid-January, when the dual circulation period ends.

"Slovenia's adoption of the euro is taking place very swiftly and smoothly," European Economic and Monetary Affairs Commissioner Joaquin Almunia said. "This shows that Slovenians were able to benefit from the experience of the first group of countries that launched EU monetary union but is also testimony of their excellent preparation."

The Commission said that euro cash payments are already becoming the rule, and should become generalised well before the end of the 14-day dual circulation period foreseen in the changeover plan.

By the end of last Wednesday, the first working day of the year as January 2 was also a bank holiday, around 40 per cent of Slovenian currency had been returned to banks and withdrawn from circulation. Since the beginning of January, banks have provided only euros and retailers are no longer giving change in tolars. While banks faced an unusually high level of activity in the first two working days, as many customers appeared to want to exchange the legacy cash for euro as soon as possible, the situation is now returning to normal.

On Thursday evening, as many as 39 per cent of Slovenians had only euro banknotes in their wallets, with a further 31 per cent having only a few tolar notes left, according to a daily survey carried among the Slovenian population for the Commission.

As the tolar has been withdrawn from circulation, cash payments in euro have increased steadily and already represented more than half (54 per cent) of all cash payments on Friday evening.