- The Washington Times - Monday, June 10, 2002

ROME Flavia Grassi used to lunch regularly at a charming trattoria close to the Piazza del Popolo. From midday, for a modest 18,000 lire, La Magutta offered its loyal patrons a splendid buffet and 8 ounces of good-quality wine.
Lunching there was a habit that Mrs. Grassi thought she never would break. Then the menu prices were converted into euros.
"After the introduction of the euro in January," she said, "the price suddenly soared to 15 euros (about 30,000 lire). Now I have stopped going on principle. So have a number of my friends. This is Italy, and we're no longer eating out."
Mrs. Grassi is an experienced economist, so it is hardly surprising that she should object to a 70 percent increase in the price of her lunch. But she was not the only one to take offense since the euro arrived six months ago a recent survey revealed that one-third of Italians no longer went out for meals regularly.
Indeed, living a normal life in much of Europe has become more expensive.
In December, a haircut in Hamburg, Germany, cost the equivalent of 5.11 euros. An identical trim now is priced at 7.5 euros. In Rome, the standard local bus fare is going up by 25 percent to precisely 1 euro.
A Coca-Cola in the Madrid sunshine, which cafe owners once sold for the equivalent of less than 1.2 euros, has been adjusted upward to the neater figure of 1.5 euros. Rents are up, the cost of household maintenance is up, the price of a potted plant is up.
Everyone agrees that the new currency is simpler. But once the zeros have been crossed out, the troublesome decimal points eliminated and the numbers rounded off, the same goods and services cost a great deal more.
The political fallout is felt even in Brussels. Last week, the European Commission was shocked by the results of its own survey, which indicated that 68.5 percent of the 301 million euro-zone residents felt that life with the new single currency was more expensive.
Astonished economists from the commission and the European Central Bank are scrambling for a solution.
Theoreticians say "euro-inflation" never should have happened. Just after Jan. 1, when the euro entered ordinary circulation in 11 countries, the president of the European Central Bank, Wim Duisenberg, said that "continuing high levels of competition in retail" would put a stop to excessive "rounding up" of prices converted into euros. But it hasn't worked that way.
According to the EU's own statistics office, the first three months of 2002 saw record increases in the prices of 20 categories of goods and services. Beneficiaries include dentists, garage mechanics, tailors, house insurers, decorators and television repairmen.
"The government allowed us to regulate ourselves," said one Florence, Italy, restaurateur, whose Santa Croce business makes much of its money selling pizzas to tourists. "You could say that we erred on the generous side."
Popular dissent has become deafening. In Germany, the new money, now known as the "teuro" a play on the word teuer (expensive) is becoming an object of national mockery and contempt.
Dirk Landschoff, 32, a contributor to a recent television debate on the changeover, said the introduction of the single currency "has given Europe a money fit only for shady double-dealers, rip-off merchants, criminals and cheats."
Senior members of the German government, terrified by polls that show that 54 percent of voters want to change back to the Deutschmark, say the changeover has been a disaster as far as millions of ordinary citizens are concerned.
The same goes for Spain, where redondeo (rounding up) has entered the national vocabulary as a synonym for sharp practice.
"It has been pretty shameless," said Carmen Martinez, a cleaner from the suburbs of Madrid. "The shops have put the prices up on fundamental things like food. Everything seems a bit more expensive. It's OK if you have plenty of money, but I don't earn much. Now I have to budget that bit more."


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