The first signs of consumers benefiting from the euro emerged yesterday when the car manufacturer BMW said it would have just one basic price for its 7 Series range throughout the 12-nation eurozone.
The move was the first indication that multinationals were having to rethink their policies on prices since products started being sold in the single currency on 1 January. Buoyed by the BMW decision, the European Commission said that it expected some big price disparities to disappear, a view echoed by consumer groups.
However, a survey by The Independent showed some big price differences across the eurozone even for products sold by multinational chains such as Ikea and McDonald's.
And there was bad news from Belgium, where the consumer organisation Test Achats said that a range of goods and services had increased by about 7 per cent over the past six months, well above the rate of inflation.
Its latest survey of 1,500 prices showed that 13 per cent were still not given in both currencies. For those that were, 16 per cent were wrongly calculated – although 8 per cent were too high and 8 per cent too low.
Officials argue that, even if anecdotal evidence of inflation is borne out more comprehensively, competition will drive prices down given the increased transparency brought by the euro.
BMW's statement said that the basic cost in the 12 eurozone countries for the 7 Series will be the same, excluding differences in taxes and legally required fittings, a policy which will eventually be extended to other models. At present prices can vary within a 12 per cent band before the European Commission takes action.
But a survey by The Independent showed that big price differences remain around the zone even for products sold by multinationals. The same three-seat Ikea sofa is advertised in Belgium for €470.88 but in Italy for €645.57. A Big Mac costs €2.50 in Rome and Madrid but €2.80 in Berlin, €2.95 in Brussels and €3.20 in Paris.
Gerassimos Thomas, a spokesman for the European Commissioner for economic and monetary affairs, said: "What we would like and what we would expect is that unjustified price discrepancies will disappear and that prices will converge."
The European Consumers Association (BEUC) believes there will be a reduction in some prices, although the pattern will be patchy. Its director, Jim Murray, said: "Some of these price differences will probably be sustainable except between adjacent countries. For example, I'm not going to travel from Italy to Belgium to buy a sofa, and how far is it worth travelling to save €50 on a suit? But there should be an effect on high-value items like cars."
Even within individual countries variations are often wide, reflecting differences in overheads, employment costs and the volume of turnover, as well as various tax regimes.
Meanwhile, the European Commission said that the euro changeover was going well and that the proportion of cash transactions conducted entirely in euros doubled to 40 per cent, while 97 per cent of cash dispensers had been adapted to deliver only euros by Thursday night. It urged consumers to change large-denomination old currency banknotes at banks rather than shops, which it said were having difficulty giving change in euros. But in France some of the banks refused to perform the changeover for non-customers despite orders to do so.
In Italy, where the switch has been dogged by delay and a political controversy, the Prime Minister sought to quash claims that his government did not support the new currency.
Silvio Berlusconi said: "It is me who guides the foreign policy of this country, and our commitment to the euro is not up for discussion."Reuse content