"The people of France have regarded it as a badge of honour since time immemorial to find imaginative ways to avoid paying taxes," says a banking analyst from BNP Paribas.
It is standard practice, for example, for people to pay out hundreds of thousands of francs in cash when they're buying a house simply in order to avoid stamp duty. This phenomenon, officials at the Banque de France have come to realize, is what lies behind the steady decrease in the amount of French francs in circulation. But now that the national currency is due to be abolished, all the cash that has been stuffed under mattresses is being taken out and spent.
Since the beginning of 2001, Ffr25 billion ($3.25 billion) has been returned to the Banque de France from commercial banks whose deposits have increased as a result of increased flows from the commercial sector. The number of francs in circulation as of June 22, according to the Central Bank, amounted to Ffr272 billion, compared to Ffr291 billion on the same date in 2000. This is a fall of 6.5%, a remarkable figure considering that a country's money supply normally increases by 3% a year.