The currencies were pegged for a period before then so other than niche cases there really weren’t opportunities for massive price increases.
Dunno about Belgium but what I notice in French supermarkets is that prices aren’t rounded at all. 10k SKUs will have 10k different prices (ish).
Plain frozen pizza? 4,62 EUR.
Same with pepperoni? 4,92 EUR
Domestic 500mL beer? 1,14 EUR
Fancier beer? 1,81 EUR
They really hammered this in. It was even a question on my exams.
One small disruptor to a core component of a small economy and they are standing outside the IMF to survive.
There are currently 50-60 small countries that depend on borrowing from the IMF (that too in dollars paying interest in dollars - given competition levels guess what dollar generating capacities small economies have? They end up economic vassals of larger systems or selling off national assets or being used in geopolitical games).
On the other hand look at China and India. They have more provinces/states than the EU and larger populations. Vastly differently economies spanning all those subunits. Yet you wont find any of those subunits complaining about their central bank setting monetary policy.
Why? Cuz look at the surroundings - Sri Lanka/Pakistan/Myanmar/Bangladesh/Thailand/Indonesia/even South Korea all at one point or another requiring the IMF to step in and bail them out when they ran into trouble.
The world is too complex and fast/ever changing and small economies are increasingly dependent on larger economies to manage the unknowns and unpredictability that lie ahead. Its almost become impossible to survive by themselves. Sort of like running a book store in the era of Amazon.
This is ludicrously wrong of India, and I understand enough of human nature and economics that I’d be surprised if it were true of China, though it may be more suppressed.
Monetary policy is government policy. The ruling party is seldom uniformly popular across their entire domain. Perhaps you’re more familiar with US politics: broadly, rural is Republican, urban is Democrat. In India, the ruling party BJP has a lot of the north, but not so much of the south or east. Accordingly, you should expect dissent from regions with a different state government. And as for socioeconomic disparity between states, rich may complain if they seem to be subsidising poor, poor may complain if they don’t seem to be getting enough attention.
> Monetary policy is government policy. The ruling party is seldom uniformly popular across their entire domain.
If by monetary policy you are referring to fiscal policy, you're pretty much spot on. There's always in-fighting between states and lots of complaining about the central/federal government favoring certain states over others.
I mean and also the US, but the key difference here is that those are also cohesive countries where wealth transfers between different areas is the norm. Much less problematic if a policy is better for New York than Alabama if you know for sure that the federal government is going to make sure Alabama doesn't get screwed.
In the EU you have the opposite problem: policies that benefit rich countries will result in the rich countries complaining about how they support the other economies and moralizing.
The situation was literally identical in Germany, where the official rate was also precisely 1.95583 to the euro (because the lev used to be tied to the DM at 1:1), but not so in most other European countries.
The lev was pegged to the euro in 1999, Bulgaria was roughly 80% poorer than the EU leaders
(I'm using PPP figures from ChatGPT to make these comparisons, I don't know if I'm making any sense)
I mean if you've tried to find evidence and can't, this feels a lot like you're simply misremembering?
I've only checked the data for Italy but real inflation stayed pretty much constant while perceived inflation absolutely blew out of proportion.
So essentially people noticed some minority of shops raising their prices talking advantage of the little confusion around the exchange rate and never shut up about it since
The country already experienced quite a bit of inflation last years, regardless of not being in the euro. I don’t see why the change of the currency that is already pegged to euro since the creation of Euro will cause any inflation beyond the rounding and the rounding is for 1:1.95583 and that often provides rounding sown incentive as 4.99 becoming 2.04 and 4.49 becoming 2.2957
A more realistic concern can be that Bulgaria might start borrowing irresponsibly. Currently Bulgaria's debt to GDP is just around %22, which is very low.
The inflation did correct itself the years after (aka lower than usual). The perception with many people still is that the euro made everything more expensive, but that's only based on feelings. The inflation numbers tell a different story.
When Germany converted to the Euro, the conversion rate was (IIRC) about ~2 DM to the Euro but from what I recall, a lot of everyday things went from costing 7 DM to 7 euro, effectively doubling in price. IIRC France was similar (ie ~6.5 francs to the Euro but 10 Francs went to 3 euro, etc).
I've tried searching for any studies on this to see if the effect was measured and, if so, whether it held with later countries joining the euro.
I'm a little surprised that the euro has been this stable for this long (going on 30 years). Finland debated leaving. IT's debated if there's even a legal mechanism to leave. We still have the problem that the ECB sets eurozone monetary policy with Germany and Greece being vastly different economies.