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PRACTICAL CHANGEOVER TO THE EURO THE EXPERIENCE OF FRANCE

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					PRACTICAL CHANGEOVER TO THE EURO :

     THE EXPERIENCE OF FRANCE

            Philippe Creignou
       Tallinn, September 30, 2003
 1999 AND 2002 CHANGEOVER


        MAIN FEATURES :
     UNPRECEDENTED EVENT
 SIMULTANEOUS IN 11 COUNTRIES
    300 MILLION INHABITANTS
A THREE-YEAR TRANSITION PERIOD
  BANKNOTES AND COINS TO BE
 MANUFACTURED FROM SCRATCH
     ACCESSION COUNTRIES
     FUTURE CHANGEOVER

         LESS SIMULTANEOUS
A POSSIBLY SHORTER TRANSITION PERIOD
         EXISTING BANKNOTES
                 BUT
     STILL HISTORIC, MAJOR EVENT
 SAME ORGANISATIONAL CONSTRAINTS
PHASED APPROACH TO THE CHANGEOVER

 CONCLUSION : A NUMBER OF LESSONS
 CAN BE DRAWN FROM THE FIRST-WAVE
           CHANGEOVER
     4 LESSONS WE LEARNT FROM
OUR FRENCH CHANGEOVER EXPERIENCE


  • CO-ORDINATED APPROACH
  • FORWARD LOOKING APPROACH
  • THE ROLE OF THE CENTRAL
    BANK
  • A CLEAR AND COMPREHENSIVE
    INFORMATION CAMPAIGN
                             ORGANISATION OF THE CO-ORDINATED APPROACH
                                              Main bodies involved in the preparation

                                                 NATIONAL EURO COMMITEE (CNE)
                                     (chaired by : the Minister of the Economy, Finance and Industry)


                                       BANKING AND FINANCIAL WORKING GROUP                                   Euro Task Force (inter-ministerial
                                       ON THE CHANGEOVER TO THE EURO (GCPPE)                                  taskforce in change of Preparing
      « Entreprise » Group
                                                   (Chaired by : Hervé Hannoun,                                     general Government
                                          Fisrt Deputy Governor of the Banque de France)                          for the euro changeover)


                                                            Euro Steering Commitee, jointly
                                                            chaired by the Banque de France
                                                              and the French Association
                                                                  of Credit Institutions
                                                                 and Investment Firms




    Introduction                                                                                                                 Other Groups
     of the euro           Organisation             Interbanking              Cashless euro             Cashless euro
                        of the transitional     Monitoring Committee           changeover                changeover            - Communication
     Withdrawal                                                                                                                - Security
     of the franc             period              on the Cash Euro        for the general public        for companies
                          Co-operation                                                                                         - Anti-money
    Co-operation                                                                                                                 laundering
                         with companies
    with the retail                                                                                                            - Costs
sector and consumers                                                                                                           - Welfare aspects
    BENEFITS OF CO-ORDINATION (1)

INVOLVING ALL THE PARTIES CONCERNED
• Credit institutions
• payment systems
• retail sector
• government agencies
• insurance companies
• consumer associations
• trade unions…
 EXHAUSTIVE VIEW OF ISSUES RAISED
 BENEFITS OF CO-ORDINATION (2)


  CLEAR ALLOCATION OF REPONSIBILITIES
        CONSENSUS-BASED SOLUTIONS
                          
 TO FACILITATE OWNERSHIP OF DECISIONS
(scenarios drawn up by professionals, approved at the
                   political level)
     TO LIMIT THE NUMBER OF FORMAL
                 REGULATIONS
  TO RAPIDLY RESOLVE URGENT PROBLEMS
        A FORWARD LOOKING APPROACH (1)


                   AN EARLY PREPARATION :

 AN ORGANISATIONAL STRUCTURE PUT IN PLACE AT A
            EARLY STAGE (1995-1996)

      CHANGEOVER SCENARIOS DRAWN UP WELL IN
                    ADVANCE
   - Plan for the Banking and Financial Community designed in February 1997
- Guidelines for the Scenario of the 2002 Changeover validated in February 2000
     A FORWARD LOOKING APPROACH (2)


   THE CHOICE OF AN EARLY, GRADUAL CASHLESS
             CHANGEOVER DURING 2001 :
                       WHY ?
- TO DISTANCE IT FROM THE CASH CHANGEOVER
- TO FACILITATE THE TECHNICAL PRIOR PREPARATION
- TO PREVENT A SPILLOVER INTO 2002
- TO FAMILIARISE PUBLIC AND BUSINESSES WITH THE
  USE OF THE EURO
                 MAIN STAGES OF THE CASH EURO CHANGEOVER IN FRANCE


       04/01/99
  The euro France’s
       currency;                                           09/10/01
The franc subdivision of                              All bank accounts
       the euro;                                   (private and corporate)                                    14/12/01                17/02/02
                                                                                       01/12/01
  Monetary policy in                                  converted to euro                                     Distribution            at midnight
                              Fist half of 2001                                  Start of frontloading
         euro;                                     Widespread distribution                                   of coins to       French franc banknotes
                           A significant number                                    of retailers with
 Conversion of public                               of euro cheque books                                   general public       and coins cease to be
                           of companies finished                                 banknotes and coins
    debt into euro;                                                                                      (euro starter kits)        legal tender
                             their preparation
 Financial markets in
                                for the euro
         euro




                                                               01/09/01
                  01/07/00                               Start of frontloading                                            01/01/02
                    Public                               of commercial banks                                       Introduction of euro
                procurement                                 with banknotes                                         banknotes and coins
                   in euro                                     and coins                                          The Frenc franc ceases
                                                                                                                       to be used for
                                                                                                                   cashless transactions
 THE ROLE OF THE CENTRAL BANK (1)


  MONITORING PREPARATIONS IN BANKING
               SECTOR
CO-ORDINATION OF THE PREPARATION OF THE INTER-
PROFESSIONAL SCENARIOS FOR 1999 AND 2002
ESTABLISHING COMMUNICATION CHANNELS
MONITORING TABLES (quaterly surveys)
IDENTIFICATION OF DELAYS AND CORRECTIVE ACTIONS
ALLOWING BENCHMARKING AND PEER PRESSURE
THE ROLE OF THE CENTRAL BANK (2)


 ORGANISING THE CASH CHANGEOVER
            1. Distribution of euro cash
• frontloading is key
• a decentralised organisation
           2. Withdrawal of legacy cash
• an even more complex operation
• a more gradual process
          A CLEAR AND COMPREHENSIVE
             INFORMATION CAMPAIGN


  INFORMING THE ACTORS OF THE CHANGEOVER      :
   ENCOURAGING THE ACTORS TO BE READY IN TIME

        INFORMING THE GENERAL PUBLIC :
     FAMILARISING WITH EURO NOTES AND COINS
 A PHASED CAMPAIGN RELYING ON A WIDE RANGE OF
                    MEDIA
 CONTRIBUTING TO PUBLIC ACCEPTANCE OF THE EURO

				
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