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France to ditch franc within weeks

John Lichfield
Monday 05 November 2001 20:00 EST
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The French franc may have only 10 weeks to live. The French government is planning a swift elimination of the franc after the euro is introduced in the 12 euroland countries on 1 January.

The French franc may have only 10 weeks to live. The French government is planning a swift elimination of the franc after the euro is introduced in the 12 euroland countries on 1 January.

Although the existing, European national currencies can, theoretically, continue to circulate alongside the euro until 15 February, the French government and the French retail trade hopes to banish the franc by mid-January.

The government denied press reports yesterday suggesting the franc might be banned a month early, although François Patriat, the French consumer minister, confirmed that he hoped for a "rapid changeover.

"It must be in the interests of shopkeepers to have two tills for as short a time as possible. For consumers also, it will not be simple to live with two currencies," he said.

The French government would therefore do all it could, he said, to encourage a policy of "euro impatience" which would lead, de facto, to an early elimination of the franc.

The new policy might appear to demonstrate government confidence that the French public is ready, psychologically and practically, for the changeover to a single European currency. On the contrary, the move seems to have been generated by fears that the French public will try to cling on to their familiar francs for as long as possible, thus disrupting the transition. By the end of September, only 27 per cent of French people admitted to having made a payment in euros, by cheque or credit card. The government had hoped for a figure of 70 per cent.

French officials had considered the possibility of forcing a "big bang" in early January by fining shopkeepers who gave change in francs, according to the newspaper Libération. This policy has been abandoned, but the government and retail trade will pursue an informal policy of extinguishing francs as soon as possible.

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