Changeover

The exchange of the national currency  for euro  was first addressed in 1994 by the European Monetary Institute (EMI). Preparatory activities were carried out over a number of years. 

The euro entered into circulation on 1 January 2002, in twelve countries: Germany, Austria, Belgium, Spain, Finland, France, Greece, Netherlands, Ireland, Italy, Luxembourg and Portugal. Subsequently, Slovenia joined in 2007, Cyprus and Malta in 2008, Slovakia in 2009 and Estonia in 2011.
Currently, euro banknotes and coins are legal tender in 17 of the 27 EU Member States.

The 10 non-participating Member States are: Bulgaria, Denmark, Hungary, Latvia, Lithuania, Poland, United Kingdom, Czech Republic, Romania and Sweden.

The Changeover in Portugal

In Portugal, the exchange started in September 2001, with the frontloading of euro banknotes and coins to credit institutions.

Overall, the euro cash changeover was broken down into four major areas of action: the distribution of the euro, the withdrawal of escudo from circulation, the training of professional cash handlers and the information campaign.

The share of banknotes allocated to Banco de Portugal was mostly produced by Valora S.A. The euro banknotes were collected by cash-in-transit companies and delivered to credit institutions, according to their requests and following a pre-defined programme.

Euro coins were produced by Imprensa Nacional - Casa da Moeda (the Portuguese Mint)  and their distribution proceeded along similar lines as those of banknotes, with frontloading starting in September 2001, mostly from Alcochete.

In addition to credit institutions, banknotes and coins were also sub-frontloaded to major companies and retailers in December 2001. Finally, as from 17 December 2001 starter kits worth €10 were sold to the public at the counters of both Banco de Portugal and credit institutions, containing a mix of all euro coins denominations.

Also with regard to distribution, mention should also be made to the conversion of automated teller machines (ATM). According to the strategy followed, on 31 December 2001 it was still possible to withdraw escudos, with a quick and gradual conversion of the machines over the following days; by the end of 1 January 2002 63% of ATMs had been converted to the euro and by 4 January 100% of machines were dispensing only euros.

Escudos started to be withdrawn from circulation in January 2002: 95% of the total value of banknotes in circulation on 31 December 2001 had been withdrawn from circulation by May 2002. Given that the treatment and handling of coins is more complex, only 33% of coins had been withdrawn from circulation by 31 May 2002.

Escudo banknotes withdrawn from circulation were checked for authenticity and subsequently destroyed in the Banco de Portugal’s sorting centres; between January and May, 418 million banknotes were sorted and 358 million were destroyed. Escudo coins were stored in the Alcochete premises of Imprensa Nacional - Casa da Moeda (the Portuguese Mint)  and the Directorate General for the Treasury .
 
In addition to these logistical operations, Banco de Portugal provided intensified training to a number of agents, in particular the financial system, law enforcement authorities and distribution companies.

An extensive and manifold information campaign  was launched: establishment of partnerships, organisation of conferences, production and distribution of information and broadcast of press and TV advertisements.

Overall, the replacement of the escudo for the euro went smoothly, particularly in the case of banknotes, given that the euro progress ratio reached 84% at the end of January and 95% at the end of May. The distribution of banknotes was fast, due to the successful conversion of ATMs, with an uneventful withdrawal of banknotes. The circulation of euro banknotes quickly reached stable levels, albeit somewhat lower than those of escudo banknotes in year-on-year terms. Following abnormal values in the first month, deposits and withdrawals of euro banknotes stabilised somewhat.