PART IV: How the Changeover Went

111. Introduction The previous reports of the Board, and the previous parts of this report, have described the extensive preparations for the changeover that were made by the Board in the areas of legislation, practical planning and public information. The test of these preparations was, of course, the success or otherwise of the cash changeover itself. This is now described.

112. Beginning of the Cash Changeover: Frontloading The cash changeover may be said to have begun on Monday 3 September, when the first consignments of euro coins left the Central Bank Currency Centre for bank branches around the country. In total, the Central Bank minted over 1000m euro coins and 969m (total value €249.9m) of these were distributed in "frontloading" (ie. delivery to financial institutions in advance of 1 January 2002) over the period from 3 September to end-December 2001. A further milestone in the changeover was the beginning of the frontloading of euro notes, which began on 1 November 2001 and again continued to end-year: in total, the Central Bank produced over 250m euro notes and some 129.4m (total value €2,286.2m) of these were frontloaded to financial institutions.

113. Sub-Frontloading In turn, euro coins and notes were sub-frontloaded to retailers, though of course the branches of financial institutions retained much of the quantities they had received in order to meet customer withdrawals and provide exchange for IR£ cash from 1 January 2002. While in theory, sub-frontloading of euro coins to retailers could begin as early as September, and some large coin users did in fact receive direct coin deliveries from then, in practice the bulk of sub-frontloading of coins to retailers took place in late November and in December. Similarly, while euro notes were available to be sub-frontloaded from November, in practice retailers did not obtain them until December, and in most cases until late December. Following a trial exercise carried out by the banks in Mullingar as a representative town, the euro coins were packaged for retailers in two main ways: for larger retailers, in a box filled with bags of sachets of coins in the various denominations, to a total value of €11,880 and containing a total of 47,500 coins; and for smaller retailers, in a portable plastic bag filled with sachets of coins in the various denominations, to a total value of €253 and containing a total of 1,400 coins.

114. Success of Sub-Frontloading The arrangements on bank charges agreed with the banks and on insurance agreed with the insurance industry, and the work of the financial institutions, Forfás, the retail organisations and the Board's Planning Unit, all combined to ensure that the sub-frontloading of retailers was very successful. Virtually all retailers were sub-frontloaded, a level significantly higher than in most euro Member States. This meant that retailers were in a position to give change systematically in euro, thus fulfilling a key element of the Board's Cash Changeover Plan.

115. Packs to Retailers A further important step in the changeover process was the delivery to retailers in October/November 2001 of the Forfás retail training kit. Its contents have been described earlier. There is no doubt that this kit and the many other Forfás initiatives targeted at retailers, plus the seminars run by retail organisations and the training for retailers provided by FÁS, were of great importance in preparing retailers for the vital role they played with such success in the early days of the cash changeover. A second Forfás pack was issued to retailers in November, again as already described.

116. Attempting to Influence the Behaviour of the Public The process of trying to influence the behaviour of the public during the early days of the changeover began in earnest in late November 2001 with the distribution by the Board of leaflets, posters and so-called "tent" cards entitled "The euro changeover: how we can all help". The posters were included with the second Forfás pack for retailers; the leaflets were distributed in very large quantities, to major retail outlets especially; and the tent cards were circulated to pubs. The messages on these materials urged the public from 1 January first to spend their IR£ cash and then, when they needed more money, to get it in their usual way - from ATMs, social welfare payments, wages and so on.

117. 14 December 2001: Starter Packs for the Public For the public, the first physical manifestation of the changeover came on Friday 14 December 2001, when starter packs of euro coins went on sale. (The original date set for this was Monday 17 December, on the basis that ECOFIN in November 1999 had said that euro coins could be made available in advance but "not before the second half of December 2001"; however, a few Member States decided to put them on sale from Friday 14 December and Ireland did so too, on the grounds that an extra selling day was important given that financial institutions would be closed for most of Christmas week; also, Friday is the day when old age pensions are paid in post offices, and it was desirable that the first day of sale should coincide with that). Demand for the packs was strong and despite an industrial dispute initially "blacking" their sale in some sub-post offices, the packs sold very briskly. Indeed, many outlets were quickly sold out, though the entire production of 1m packs was not exhausted.

118. The Weekend 28 December - 1 January Financial institutions used the period from Friday 28 December to Tuesday 1 January to convert their systems and accounts to euro. This was facilitated by the fact that the European Central Bank had declared Monday 31 December a closed day for the TARGET interbank settlement system and that the Euro Changeover (Amounts) Act 2001 had declared it a non-value day for financial transactions in Ireland. Some final deliveries of euro cash were made over the period, too, and significant numbers of retailers received their sub-frontloaded supplies of euro cash, especially notes.

119. 30 and 31 December: Special Newspaper Advertisements On Sunday 30 and Monday 31 December, the Board, with the Central Bank, Forfás and the Office of the Director of Consumer Affairs, placed a two-page advertisement in the newspapers featuring the appearance of the euro notes and the value of the euro notes and coins, the logo of the National Code on Euro Changeover and advice for retailers and the public.

120. Publicity Events of 31 December On 31 December the Board held a publicity event at the corner of St. Stephen's Green in Dublin to celebrate the introduction of euro notes and coins. There was a jazz band, a compère and very brief speeches, and young people in euro coin costumes handed out 'Happy Euro Day' cards and bags of euro gifts to the public. The Minister for Finance, the Governor of the Central Bank of Ireland, the Director of Consumer Affairs and the Chairperson of the Board then walked down Grafton St. to the corner of Harry St, where the Minister made a final purchase, of flowers, in Irish pounds before €-day. Also on 31 December, the RTE television variety show at midnight had a euro theme and featured a quiz with a prize of €20,000 sponsored by the Board.

121. The Board's Monitoring of the Changeover For the changeover itself, the Board put in place an extensive monitoring operation to enable the Secretariat to obtain each day a soundly-based overview of how the changeover was progressing, to identify any areas where difficulties were arising and to respond if necessary. The monitoring operation also provided the foundation for the press releases the Board issued on each of the first four days of the changeover and enabled the Board to respond to press queries whether made by phone or at the press conferences the Board held each day 2-4 January. The Board's press releases gave an authoritative overview of the progress of the changeover in the first few days.

122. How the Monitoring Operated In carrying out its monitoring exercise, the Board drew on the experience gained and contacts made in its oversight of key stakeholders' preparations. For the monitoring, contact was made on a daily basis for the first two weeks or so with over 30 stakeholders, so that the Board would have information about the banking and post office system, large, medium and small retailers, public transport, the relevant Government Departments and local authorities, toll bridges, vending machines etc. The main indicators of success were, of course, the successful conversion of accounts in financial institutions; the changeover of ATMs to dispensing euro and the level of usage of ATMs; systematic giving of change in euro by retailers; the making of social welfare payments in euro; the proportion of cash transactions being carried out in euro; the extent of cash exchange and withdrawal across financial institutions' counters; and the response of the public.

123. European Commission Monitoring The monitoring operation also enabled the Board to provide daily reports to the European Commission about the progress of the changeover in Ireland, for the purposes of the monitoring operation that the Commission was carrying out across the euro area in conjunction with each of the Member States. Using the daily reports from Member States, the Commission was able to issue daily press releases for the first two weeks describing the general situation across the euro area.

124. 1 January 2002 On 1 January 2002, the Irish Bankers' Federation reported to the Board before 10am that accounts in financial institutions had successfully been converted to euro as had the ATM system, and that ATMs themselves were in the process of conversion, with some already dispensing euro notes. Telephone and Internet banking had also been converted to operate in euro, as had over 40,000 point-of-sale terminals for Laser and other card transactions. Reports also indicated that parking meters and toll roads were taking both euro and IR£ coins without difficulty and that retailers were giving change in euro systematically. Not many retailers were in fact open and in some cases those who were, were finding that some members of the public were making small-value purchases with large-value IR£ notes and so were fearful that they might run out of change. The Central Bank was operating a cash exchange office at its headquarters in Dame Street, Dublin; large queues formed there and it received widespread publicity on radio and television. At lunchtime, the Taoiseach made a purchase in IR£ at his local newsagent and was given his change in euro; he also made a purchase there with the Belgian euro coins he had received from the Belgian Prime Minister at the recent EU summit. The occasion was well attended by the media and the Taoiseach gave a number of interviews, in the course of which he publicly praised the work of the Board. The Chairperson was also interviewed. By 6pm, some 85% of ATMs were dispensing euro and most of those not yet converted were in less-frequented locations: none was dispensing IR£.

125. 2 January On the second day of the changeover, financial institutions reopened and began to operate cash exchange (ie. giving euro cash for IR£ cash) and withdrawals in euro. It was clear that the public reaction to the new currency was very enthusiastic: large queues formed in many branches, and it seemed that many members of the public were anxious simply to exchange all their IR£ cash etc. for euro so as to avoid holding two currencies at once, rather than spending their IR£ cash. Almost all the remaining ATMs were converted and usage was about 10-20% higher than usual. Most retailers were open and were, it seemed, giving change systematically in euro. The phenomenon of some customers tendering large-value IR£ notes for low-value purchases continued to occur, though on a diminishing basis. Retailers and their staff coped very well with the difficulties presented by the changeover and queues were generally normal: some retailers had extra staff in place to ensure smooth running of their outlets. Some retailers and publicans operated limited bureaux de change facilities, at which customers exchanged (limited amounts of) IR£ cash - usually in standard amounts, eg. £10, £20 - for euro: in some cases the retailer had made up the euro equivalent of such standard amounts in packets in advance, so as to save time. In a number of cases, retailers operating bureaux de change ran out of euro cash. Social welfare payments began to be made in euro, and this swelled the amount of euro cash in circulation, particularly as child benefit, normally paid on the first Tuesday of the month, had been deferred from 1 January (because it was a public holiday) to 2 January. Public transport operated normally, without euro-related delays. Overall, reports from stakeholders indicated the euro was being used in around 30% of cash transactions, though there were wide variations between sectors and some newsagents and Dublin pubs were reported as seeing much higher figures. Public bodies such as Motor Tax Offices were successfully operating in euro and giving change in euro only.

126. 3 January Queues at financial institutions' counters continued to be very lengthy on Thursday 3 January as the public's enthusiastic reception of the new currency continued. The conversion of ATMs was now complete. Systematic change-giving in euro by retailers continued. Some localised incidents of shortages of some denominations of euro cash were reported, but retailers compensated with alternative denominations when giving change in euro. The adaptation of vending machines had begun. In its press release issued at noon on 3 January, the Board said that it was well on the way to exceeding its target of having the bulk of transactions in euro by the end of the first two weeks after €-day. Reports from stakeholders later in the day confirmed this view: in fact, overall it seemed that some 50-60% of cash transactions were in euro on 3 January.

127. 4 January Queues at financial institutions continued to be very long on Friday 4 January and the Central Bank made arrangements to replenish some branches with euro notes where these had been running low. ATM usage continued to be busy, at about 10-20% higher than normal, and the IBF reported that over the three days 1-3 January, some 1 million transactions had been conducted at ATMs. Queues in shops were reported normal and systematic change-giving in euro by retailers continued. The rate of adaptation of vending machines was increasing and it was expected that the majority would have been converted by the end of the day. Social welfare payments in euro continued and it was estimated that by the end of the day, over half-a-million people would have received social welfare payments in euro, in cash, in the three days 2-4 January. Overall, reports from stakeholders indicated that some 60% of cash transactions were in euro.

     The level of ATM usage in the first three days and expected usage on 4 and 5 January, the effects of the systematic change-giving by retailers and the level of exchange and withdrawal of cash at financial institutions' counters, and the numbers who had received social welfare payments in cash, were such that the Board issued a press release on 4 January to the effect that by the evening of Saturday 5 January, well over 2 million people - the vast majority of adults in the country - would have euro notes. The press release went on to predict that next week it would be "business as usual, and business in euro".

128. The Weekend 5 - 6 January Although Saturday 5 January was a major shopping day, queues at tills were normal and stakeholders' reports indicated that over 60% of transactions were in euro, with a higher proportion in some sectors, though a significantly lower one in some rural areas. Over the weekend, the Central Bank arranged replenishment of some bank branches where stocks of euro cash were running low, and this operation continued over the following days until business at financial institutions' counters returned to more normal levels.

129. 7 January Monday 7 January was an important day in that it marked the return to full working throughout the population after the Christmas holidays. In that sense it represented the fullest test of the changeover since the launch of euro cash. The test was passed comprehensively; queues at tolls were normal and public transport operated normally. Queues at banks remained high and ATM usage remained 10-20% above usual levels. The rate of adaptation of vending machines was estimated at well above 75%. Queues in retail outlets were described as normal. Overall, the rate of euro usage in cash transactions was reported at well above 75% and the urban/rural divide that had been seen before the weekend disappeared, with the rate of euro use in rural areas increasing dramatically. The Board had not issued a press release since Friday 4 January and it was now decided not to issue any further press releases and to discontinue the press conferences that had been held daily on the three days 2-4 January. The Secretariat did of course continue to monitor the progress of the changeover and to provide reports to the European Commission to help inform its press releases: these provided the basis for the very favourable comment about the progress of the changeover in Ireland that the Commission made in the following days.

130. 8 January Tuesday 8 January marked the virtual completion of the cash changeover: almost 90% of cash transactions were being carried out in euro, with the figure above 90% in several sectors. The IBF reported that by 3pm that day, some 2.6m withdrawals had been made from ATMs for a total of over 250m euro. (Later, in February, the IBF estimated that some 2m over-the-counter transactions had been conducted in bank branches in the five working days ending on 8 January, the majority of them involving cash exchange and the lodgement of IR£ cash to accounts). Retailers reported that queues continued normal, while vending machine adaptation was in excess of 90%. In effect, by the end of just one week from €-day, the new notes and coins were in use everywhere and the use of IR£ cash, already rare, was becoming increasingly only a memory.

131. The Run-up to 9 February Legal tender status was withdrawn from IR£ notes and coins at midnight on Saturday 9 February 2002. As already described, the Secretariat consulted the Cash Changeover Working Group in mid-January about the tone of the message to be used in the Board's advertising for the run-up to that date, and both retailers and financial institutions considered that a fairly firm message should be given, on the grounds that they would prefer to deal with a rush of IR£ cash in the days before 9 February than with its being presented in small amounts over a long time afterwards. Accordingly, in the advertising it conducted from 24 January on press and radio and from 28 January on television, the Board's message was that the public should use up their IR£ cash before 9 February, though mentioning on radio and in the press that financial institutions would continue to accept it for exchange or lodgement for a time afterwards and that the Central Bank would give value for it indefinitely. In the event, no rush materialised and the end of legal tender status passed quietly and with comparatively little notice.

132. Withdrawal of IR£ Cash While the introduction of euro notes and coins was the event that received public notice, the withdrawal of IR£ notes and coins was also a vital part of the changeover operation. It was also much more difficult to plan from a logistics viewpoint because of the difficulty of predicting when, where and in what quantities IR£ cash would be lodged. Nevertheless, the withdrawal operation was very successful.

     By 8 January, 44% of IR£ notes and 11% of IR£ coins had been withdrawn, compared with the value in circulation at end-December 2001. By 14 January, these figures had risen to 56.2% and 13.7% respectively, and by 21 January to 68.2% and 21.7%. At end-January they were 78.6% and 34.5%, while on 14 February, i.e. just after the end of the changeover period, they stood at 85.9% and 48.4%, a testimony to the efficiency of the withdrawal logistics.

133. The Board's Thanks To conclude: the changeover to the euro was extremely successful. It was completed smoothly, rapidly and with minimum disruption to commerce and the public. This result was achieved because of the hard work and effort of a very large number of people in a wide variety of organisations across the Irish economy and across Irish society. Rather than attempting to list all the people and organisations involved, the Board would like here to thank everyone who played any part in the changeover and to congratulate them on its success; and to express too its sincere appreciation of the enthusiastic reception given to the new currency by the people of Ireland.

Part III: Public Information Activities
Appendix 1: Membership of the Euro Changeover Board of Ireland

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