PARIS, Dec 7: The euro is a pretext for underhand pricing tricks, many people fear with support from some consumer studies echoing alarm which has marked currency changes in France, Britain and Germany in the past 40 years.

European Union surveys now show that up to two-thirds of euro-zone residents are worried about temporary increases in prices during the switch to single currency notes and coins from January 1.

And probes by consumer associations and government agencies underpin their concern.

From French hairdressers to Dutch DVD distributors, prices have jumped, and while European Commissioner Pedro Solbes speaks of “anecdotal evidence”, and insisted on Friday that the euro would not increase inflation, the German central bank says increases are “clearly perceptible”, for food in particular.

The demons of pricing trickery show up each time a country modifies its monetary structures.

In 1958, French leader Charles de Gaulle sought to create a psychological shock for the nation, then embroiled in war in Algeria.

Economist Jacques Rueff conceived a plan to liberalize foreign exchange and launch on January 1, 1960 a new franc, each of which was worth 100 old francs.

Most shocked of all were the elderly, who complained bitterly of the change, recalled Jean Raynaud, whose job was to answer their letters.

They all contained the same idea: all my life’s savings are going to fly away, Raynaud said.

One woman wrote to de Gaulle, saying: You have decided this for the francs of today, which are earned very easily. But I hope you are not going to touch the francs earned since 1904 and saved up.

Officials point out now as they did then that the perceived slashing of savings or salaries is accompanied by an equivalent cut in price figures, but many elderly people still express values in old francs, bizarrely using the old valuations with extra zeros particularly for big, not small sums, such as the price of a house.

On January 1 cash of 6.55957 francs will boil down to one euro, and experts say the transition could be quicker than that from old francs to new, since the change is clear-cut.

In 1960 the French feared prices would rise, with people exclaiming: We are all going to lose our shirts, or we will end up (living) under the bridges.

As it turned out, the chronically weak franc stabilised, and the daily Le Monde said on January 2: After going to sleep in France, the French woke up this morning in Switzerland.

In Britain, decimalization of the pound in February 1971 was meant to simplify a system in which sterling was subdivided into 20 shillings, each of which comprised 12 pennies.

Again, people feared prices would skyrocket, and the issue was still being debated in anniversary press reports one year later.

The General Index of Retail Prices shows prices increased by 1.38 per cent from a value of 145.0 to 147.0 between December 1970 and January 1971, and edged up to 147.8 in February when decimalisation took place, and to 149.0 in March.

The index surged to 152.2 in April for a one-month spike of 2.15 per cent.

Surveys found that 80 per cent of the population believed that prices had risen, but the Nottingham study said: Our results strongly imply that consumers tend to notice and remember increased prices much better than stable or falling prices, and they are inclined to judge changes in the general price level by the former rather than by the latter.

A report by Noel Moore, secretary of the Decimal Currency Board which oversaw the change, said almost all observers exonerated retailers from the charge of ‘decimal diddling’ over this immediate changeover period.

Yet while most people had few problems making the transition, the Financial Times quoted one woman whose value references had been disrupted as bemoaning: Why couldn’t they have waited to do this until all the old folk were dead?

Extension of the deutschemark to eastern German states at the end of June 1990 was marked by great urgency with 16 million people being provided with an initial stock within two days at a rate of one for one ostmark.

The one-for-one rate was essential to win political and psychological acceptance in eastern Germany even though it was opposed by the Bundesbank as over-valuing the ostmark.

The terms appeared to increase the nominal wealth of East Germans but in fact worsened the uncompetitive structure of their economy for years.

The Bundesbank said in a report on the switch in 1990 that fears of inflation which had arisen in the run-up to the monetary union did not materialise.

But in 1991, subsidies were removed from energy and transport fares, and along with higher labor costs pushed the consumer price index in eastern states up by 13.5 per cent in May compared with the same month one year earlier.—AFP