Franc-ly, the French Don't Give a Damn
By Louise Cross and Christina White
With just weeks to go before the French franc expires on Feb. 17, a painfully -- and surprisingly -- long queue of euro enthusiasts snakes out of a branch of La Poste in the Marais district of Paris. Nobody thought the patriotic citoyens would be so eager to dispense with what had been regarded by some as a symbol of national honor. Yet eager customers are rushing to rid themselves of their soon-to-be-defunct currency.
In a windowless room in the back of the post office, a team of eight workers is diligently feeding stacks of notes into a whirring machine. Helping to destroy the 6.6 billion worth of francs that are returned, on average, every day throughout France is an agonizing and time-consuming task. An air of solemnity reigns as the money proceeds to the hole-punching machine, which pierces each note through the heart of its watermark.
SEASON OF CHANGE.
Amid the clattering of coins and the hammering of the punch, the branch manager heaves a sigh at the huge stacks of notes and coins in front of him. Such sounds are no doubt being heard all over France these days, as they will be for some time. The task of gathering and destroying the 1.5 billion French notes and 8 billion coins in circulation -- part of one of the biggest peacetime logistical efforts Europe has ever seen -- will continue until the fall at post offices and bank branches throughout the country.
Informational campaigns mounted by banking associations and the Finance Ministry in 2001 familiarized the French with the new currency before it was in people's hands. "The franc disappeared quickly," says Gilles Guitton, director of the French Banking Federation. "What was technically a colossal plan passed much more normally than the pessimists predicted."
Indeed, even before Jan. 1, the French were displaying a surprising indifference to their currency, which is adorned with such symbols of national pride as Marianne, Antoine de Saint-Exupéry, and Gustave Eiffel. A public eagerly anticipating the arrival of the new currency scarcely noticed, let alone celebrated, the franc's 641st birthday in December, 2001. "I was not very attached to the franc," says Fabrice Grether, an Air France pilot. "I've thought more about the birth of the euro than the death of the franc."
He's clearly not alone. La Poste estimated that it would be invalidating 1.3 billion francs a day. But, on some days, nearly three times that sum has come pouring in. "The volumes that we have taken in are much greater than what we expected," says Patrick Werner, executive vice-president for financial activities at La Poste.
Removing the franc from circulation is done according to regulations set by the Bank of France, which is managing the superseded currency's destruction. The process begins when the money passes over the counter and specially trained bank employees on duty at the post office take it out of public view to begin the sorting process. Each employee, supervised by a colleague, shuffles notes from trays into counting machines. The notes are then fed into the piercing machine. Once marked, the notes are no longer legal tender. Even the mere possession of an invalidated note is a finable offense.
Coins take a different route. After being stacked and bagged, they're sent to the Bank of France for storage. Eventually, Medailles et Monnaies, the French mint, will melt them down and extract the nickel.
INTO THE FURNACE.
The notes are taken to the closest Bank of France branch, 40 of which are equipped with shredding machines. Some 60% of the notes are turned into confetti. The Bank of France has contracted with two companies, Sita, a division of the Suez utilities group, and a waste-management company to get rid of the resulting waste. Sita, which is handling all of the country but the Paris region, has been testing its franc-disposal system since October, 2001.
Prior to the euro hitting the streets, 180 million worth of francs had already been shredded before being incinerated or buried. Says a Sita spokesman: "The destruction schedule will be very busy until March."
If a regional Bank of France isn't equipped to shred notes, the money is passed along to the branch at Vic le Comte, in central France. There, at the same site where paper for the new euro notes is produced, the remaining 40% are burned in a furnace crowned by a towering chimney. Concerned about the environmental impact, the Bank of France has installed a special filter and regularly monitors the smoke for contaminants.
Not every country is so anxious to see its retired currency go up in smoke. Environmental rules forced Germany's Bundesbank to shut down its incinerator before it could host a deutschemark bonfire. And a green conscience also precluded Germany and the Netherlands from turning all their shredded notes into landfill.
It's a good thing, therefore, that they have figured out how to cash in on the old money's sentimental value: Germany's Bundesbank is selling bottles filled with shredded marks, and, after months of negotiation, Dutch outfit MoneyNotes has won the permission of central banks in Germany, Belgium, Spain, and the Netherlands to recycle their nations' old currencies. Now, euro-skeptics can indulge their nostalgia by buying paper, envelopes, and mouse pads embedded with flakes of their forever-lost paper money.
The franc will have no afterlife, however. "The Bank of France did not want the notes to be recycled because it would have been a psychological shock for the French," says the Sita spokesman. But the Bank of France was wrong. The French aren't mourning. They've already bid adieu to le franc.
Cross and White work in the Paris bureau of BusinessWeek
Edited by Patricia O'Connell