The Euro Takes Its Toll

Jean-Louis Perusin may be the first man to face ruin by the euro, the new currency that will replace the francs, drachmas, pesos, guilders and deutschmarks of a dozen European countries on January 1, 2002. He runs a small gas station and garage on a country road in the heart of France, on one of the quieter routes down to the Spanish border.

His gas station, with a clutch of aging cars parked outside awaiting renovation, is just outside the town of Le Bugue, some 350 miles south of Paris. He has lived here all his life and his brother is one of the local rescue squad firefighters.

Jean-Louis is a small round man, as hard as nails — and a fine mechanic with a gift for coaxing elderly vehicles back to purring life. “But these days, the modern cars need less servicing and fewer repairs. They have computers on board, so there’s less work for old-fashioned mechanics like me,” says Jean-Louis.

No matter, there was enough work, with the gas pumps out front selling two brands of unleaded, one of leaded and one of diesel to the passersby. Even that was getting tough. There used to be five gas stations in town.

Now there is just Jean-Louis — and the cut-price operation outside the giant Intermarché supermarket on the road out of town. Inevitably, the giant chain can undercut Jean-Louis. More and more locals go there to save the dollar or so on a tank of gas. Yet, enough of them still use Jean-Louis and the takings are good in summer when all the tourists are around.

But last month, the German run petroleum company, Avia group, that has sold Jean-Louis his gas for years, and whose sign is the biggest thing you see as you drive into town, said they were going to have to stop. It was the euro, they explained. It would cost more than $30,000 to install pumps denominated in euros and the new 24-hour credit card payment systems that go with them.

“They said I had a nice little business, declining but OK, still turning them a steady profit. But the costs of the new pumps changed everything. The euro has changed all the calculations,” Jean-Louis explained, as he leafed through a catalog for a high-pressure cleaning and car wash system that he might open instead.

“It wasn’t just me,” Jean-Louis went on. “Avia alone are closing scores of small country gas stations all over this part of France. And Avia is one of the smallest of the petrol companies.”

“From colleagues I have in this business, this is taking place all over France and in Spain and Italy. The costs of the euro conversion can only help the big guys, the centralized modern gas stations on main roads or on supermarkets — and kill off the small ones like me.”

The euro has faced a lot of criticism before. In Ireland, they found the big milk supplier subtly raising prices by 13 percent as they converted to euro pricing and to liters from pints. In Germany, the ARD public TV station ran a series of surveys and spot checks. It found that the habit of “rounding up” figures to an eye-catching 5.99 and 10.95 mean that euro conversion was already concealing an average price rise of 4.4 percent.

But in France, the fact that the euro is contributing to the slow death of those rural communities they love so much adds a new complication.

In Brussels, where the European Commission runs a euro information service, they are skeptical of Jean-Louis Perusin’s tale. They believe him, but they question whether the Avia group is being entirely frank in blaming the euro conversion for their decision to close so many rural gas stations.

“All petrol pumps can be calibrated, because the price goes up and down. It is not complicated to put a euro sticker where the word franc used to be — and then re-calibrate the pump for the new price. But many companies are using the excuse of the euro to bring forward rationalizations they had been planning to do anyway.”

Jean-Louis Perusin is trying to sell his house, to unlock some capital that he can then put into something else. He’s not sure about the carwash business since the supermarket already has one. Maybe he’ll specialize in restoring old cars, but more and more other mechanics are being forced to do the same.

His wife, Kati, thinks they might have to go into “brocantes,” the antiques business. Or maybe she should open a women’s gym. “I never used to mind this euro currency — and saw a lot of advantages in it,” she says. “But now I hate it.”

December 3, 2001