The French are convinced that the euro has rocked the labels. and that prices generally increased when the franc was abandoned on January 1, 2002. Is this true? The Dispatch make the point.
The famous baguette of bread! The French clung to this emblem to measure the rise in prices. Convinced that the euro has rocked the labels, the consumer associates the introduction of the euro with inflation, in particular on bread. With a baguette close to one euro in 2021, prices have not exploded, however. In 2002, when the euro arrived, a baguette did not cost 1 franc as some think, but 4.41 francs or 67 euro cents.
Since 2002, the price of the baguette has kept pace with inflation to increase by 30%, while consumer prices have increased by 26% between 2002 and 2020 according to INSEE. The minimum wage jumped 50%! “We have not seen a general acceleration in prices following the changeover to the euro,” said Sébastien Faivre, head of the consumer prices division at INSEE. This feeling of increased cost of living can be explained, in the first years of the introduction of the euro, by a rounding of prices to the higher unit practiced by traders.
Enduring distrust of the euro
This practice aroused strong mistrust of the now stubborn euro. “The rounding effect was clearly bullish for frequently purchased products (bread, pastry, coffee)” confirms INSEE. Significantly less for capital goods such as large household appliances, automobiles, real estate, etc. However, this concern regarding an excessively sharp rise in prices was only measured among consumers until 2013. Since then, this feeling has continued to decline.
In Toulouse, it is the variations of the euro once morest the dollar that are closely scrutinized by Airbus. Indeed, in 2014 when the strong euro appreciated once morest the greenback, Louis Gallois, then boss of Airbus had launched: “A rise of ten cents of the euro once morest the dollar costs a billion euros to the operating income of EADS * ”. Since then, exporting companies have resorted to currency hedges, an insurance to protect themselves once morest fluctuations in currencies.
