Transition from Markka to Euro

[riku2]

like a packet of Makkara used to cost 10 Markka, but changing to Euro it was just 1 euro (kind of cultural shock).

I don't think there would be much "shock" should that price conversion rate be used. 10markka would be about 1.68e, so if the supermarkets cut the price to 1e then people would be filling their fridges with sausage.
The prices were converted at roughly the correct exchange rate, there was no price inflation (to move things to prices like 1.99euro, 4.99e etc). Probably since finns use plastic a lot there is not the obsession with price points in finland as much as in places like the UK, there is no obsession with pricing things in the supermarket at 1.99 for example.

From what I remember of it the main annoyance was that machines/devices accepting/using coins (supermarket trolleys for example) were not converted straight away. And the transition time when you could use both currencies was quite short (a few months), so there soon came a time when supermarket trolleys would not unlock with the currency actually in use. But things were sorted out eventually of course.

Finland isn't like France where they are still printing the price in Francs on price tags!

I still find it a bit strange how finns are quite accepting of the "rounding" of prices though, up/down to the nearest five cents. Not all euro countries do this and 1 and 2 cent coins are freely in use in France and Germany for example. If this was the UK then there would be lawsuits raised on the basis that if something is offered for sale at 73 cents then you should be able to hand over 73 cents for it and not have the supermarket checkout round it up to 75cents !! It's no doubt written into the law that this is allowed, but when the 1 and 2 cent coins do exist then it's a bit wierd. There should really be the chance to pay 73cents - IF you have the small coins. which since they're not handed out by finnish banks would mean most people would have to pay 75, but you should at least have the choice to pay (if you had the small coins).

[ajdias]

You do have the chance to pay 73 cents - if you have the coins or if you pay with card. The coins are just not used here and, in hindsight, it was a darn good idea.

[jahasjahas]

I still find it a bit strange how finns are quite accepting of the "rounding" of prices though, up/down to the nearest five cents. Not all euro countries do this and 1 and 2 cent coins are freely in use in France and Germany for example.

Having 1 and 2 cent coins in use is a bad idea.

Here's an informative video: CGP Grey: Death to Pennies.

[AldenG]

Finns and Swedes and probably other Nordics started rounding decades before the Euro existed, so whatever resistance may have existed in Finland would be the stuff of old folks' reminiscences. After all, pennies in those currencies were/are worth a good deal less even than Euro cents.

[Rip]

In that sense the transition was pretty smooth. The prices were given in both currencies (I think) for one year both before and after the transition date. Markka was accepted in shops for two months (while the change was given in euros), so most could get rid off their old cash without going to a bank.

Nowadays it seems I can often manage with the same 10 or 20 euro banknote in my wallet for weeks. Makes the point regarding 1 and 2 cent coins also moot for me.

[Jukka Aho]

I haven't seen Markka notes in my real life, just in pictures, but I have seen few coins here and there, as I was not in Finland during those days, so just curious to know how was the transition process.

The good, the bad and ugly part of it?

The price tags had the pricing printed in both currencies both before the transition, and some time after. Cash registers and their back-end systems required upgrades or updates to be able to handle two differently-valued currencies. Where upgrading the cash register was not deemed feasible, the store-keeper had to do the currency calculations manually during the transition period.

If you paid in markkas, you would receive the change in euros. In order to take the markka out of circulation as rapidly as possible, the checkout clerks were not allowed to give you your change in the old currency. The markka was accepted in the banks, or at least exchanged to euros in the Bank of Finland, much longer than it was accepted in stores.

In the related public discourse and communication, much was made out of the fact that the exchange rate was almost 1:6 (1 EUR = 5.94573 FIM). People were advised to take a refresher course on their mental “times 6” multiplication table. Special calculators with a built-in currency conversion function and slide rules fulfilling a similar role were available in the stores and handed out as business gifts, exhibition/advertising paraphernalia, etc.

Long after the transition, many still reported mentally multiplying the euro prices by 6 to get a better hang of the “actual value” of everything, especially pertaining to larger sums you don’t normally deal with in your daily life.

To some degree, people have been accusing stores of masquerading price hikes in the transition process, hiking them shortly before or during the transition period, this way taking advantage of the consumers’ temporarily diminished awareness of the “real value” of their new money. The merchant organizations have typically denied any such intention and later tried to fight this conception with statistic and graphs showing the effect of (the supposedly natural) inflation. In this battle of perceptions, the price of a cup of coffee in a cafe has long been the most-quoted and discussed example.

[jahasjahas]

many still reported mentally multiplying the euro prices by 6 to get a better hang of the “actual value” of everything,

so true... I guess this is natural instinct. This happens to me a lot when I travel outside eurozone, trying to evaluate the actual value of things by mentally calculating and comparing it to Euro.

It makes sense when traveling, since you actually need to compare the two currencies.

What doesn't make sense is comparing current Finnish euro prices to some barely remembered "real" markka prices from 2002. The x6 conversion rate doesn't apply after years of inflation, etc.