Abu Dhabi, UAESunday 25 October 2020

Spaniards saying hasta la vista to euro and hola peseta

Spanish shopkeepers are encouraging customers to pay for goods in pesetas, the country's old currency before the euro was brought in.

For the moderately inquisitive visitor to France or Germany, it does not take too long to come across someone who recalls with affection the golden ages of the franc or Deutschmark.

They were not always such golden days at all, of course, as anyone remembering times of high inflation could readily testify.

But in an unexpected extension of opinion poll findings and anecdotal evidence showing many in the euro zone to favour returning to their previous currencies, the people of several Spanish towns have put their money where their mouths are.

Following an example set in the town of Salvaterra de Miño, close to the border with Portugal, shopkeepers and traders in at least four towns have encouraged customers to pay for goods and services with the notes and coins kept from pre-euro days.

Unlike other members of the euro zone, Spain set no deadline for cashing in pesetas when it introduced the single currency in 2002.

The Bank of Spain has estimated that pesetas to the value of more that €1.7 billion (Dh8.27bn) remain in private hands. It is still taking in the old currency at the rate of €1m to €2m each month, keeping one window open for notes and another for coins, with identification required only when the amount being converted to euros exceeds 500,000 pesetas.

In Villamayor de Santiago, about 100 kilometres south-east of Madrid in the country's La Mancha region, which was home to the Spanish fictional character Don Quixote, 30 shops, including supermarkets, chemists and hardware stores, have been accepting pesetas.

The scheme was originally intended by the local merchants association to run throughout January but proved so popular that it was extended at least until the end of this month.

"People kept hold of old pesetas thinking that they might come in handy one day if the euro fails," Luis Miguel Campayo, the chairman of the association, was quoted as saying in Spanish media reports.

"It seems that those fears might come true. Lots of Spaniards, especially older people, have a strong emotional attachment to the peseta and still do their sums in it when talking about big transactions. The economy is struggling so much that euros are scarce," Mr Campayo was quoted as saying.

Traders have so far recorded takings of about 1m pesetas, equivalent to €6,000. "The first week of January was slow, but after the second week, the customers began to get into it," a shop owner was reported as saying.

Support for the idea has been especially strong among those convinced life has been tougher under the euro.

"To still think in pesetas is a generational thing," another shopkeeper told the Spanish daily newspaper El Pais. "And in this town there are a lot of older people who still haven't changed their mental chip."

"When you figure that three kilos of tomatoes now cost 500 of the old pesetas, you see how much our economy has changed in only a decade," said Jesús Pérez Manzanera, one of the makers of the renowned La Mancha cheese.

Maribel López, who has a small supermarket, said she was surprised so many people had clung to their pesetas more than 10 years after the euro was meant to render them redundant. One family bought groceries worth €150 in her shop, paying with 33,000 pesetas.

When the experiment comes to an end, the merchants association will take the pesetas to Madrid, convert them to euros at the Bank of Spain and distribute the proceeds among the traders who have taken part.

Local officials say the idea has sound economic justification, given the need to stimulate trade after recession forced a drop in sales.

In Spain as elsewhere in Europe, many are sceptical of the euro. One recent poll found one Spaniard in three had lost confidence in the single currency.

The consumer group OCU estimates that the cost of basic food items has risen by 43 per cent since the euro was introduced in Spain. Bread and milk prices have increased by almost half while potatoes have more than doubled.

One person in three in Villamayor, which has a population of about 3,000, is out of work. Youth unemployment in the country as a whole is running as high as 50 per cent, with large numbers of graduates unable to find any work and repeatedly described as the "lost generation".

A Spanish embassy official in London said: "I am aware of this but think it is largely symbolic. Some people, especially the elderly, still make calculations in pesetas, so there is a bit of nostalgia at play in what has been happening.

"I do not think it has spread beyond a few small towns or that it will become general. It sounds more like a marketing gimmick than anything else. The euro has been good for Spain, but who knows what would happen if things got worse?"

 

business@thenational.ae

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Updated: February 22, 2012 04:00 AM

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