Brussels, 22/06/2006 (Agence Europe) - The closer the date for their entry becomes, the more the Candidate countries for accession to the euro need to speed up their practical preparations, the Commission points out in a communication detailing the progress of the eleven countries concerned (the ten States from the last enlargement and Sweden, which also has a temporary derogation, but whose preparations have stalled). This third report of its kind, published on Thursday, does not concern itself with the Maastricht criteria setting out the conditions for the adoption of the euro and which are dealt with in the convergence reports, but examines the state of practical preparedness at national level ahead of the adoption of the single currencies. It notes an improvement in how the euro is perceived by the citizens of the new Member States, who are often ill-informed. According to a Eurobarometer survey conducted in April this year, 48% of respondents were happy to see the euro replace their national currency, compared with only 36% in the preceding survey of September 2005, and 44% in September 2004. Only 37% of citizens, however, feel well informed on the euro, compared with 32% eight months ago, and 46% of respondents still believe that the euro will cause inflation (compared with 48% previously).
Slovenia, which will join the euro zone in January 2007, seems to be at an “advanced stage” in its preparations, although certain areas need to be better covered, says the Commission. It considers that an agreement has to be reached as soon as possible between retailers and consumers, ensuring stability of prices during the transfer to the euro. The Consumers' Association in Slovenia will monitor consumer prices and will publish in the media the names of all those who increase prices by exaggerated amounts during the transition period. This practice of naming and shaming, which was not introduced at the creation of the single currency, has the support of the Commission and Member States themselves, but requires an initial formal commitment. To ensure that the introduction of the euro is not used as an opportunity for excessive price rises, there could be an accompanying campaign indicating, by means of little stickers, for example, which shopkeepers had undertaken to abide by fair practices on prices.
On the home straight towards accession to the euro, Ljubljana must also increase the number of automatic cash dispensing machines which will be able to dispense euros from the first day of adoption, and bring this number close to 100%. Current figures suggest on 60 to 70% of dispensing machines will be able to dispense euros from 1 January 2007. The current number of 150,000 euro kits, containing euro coins to enable the public to familiarise itself with them, which will be made available from 15 December 2006, should be increased, says the Commission. Frontlaoading (the provision of stocks of euro coins and notes) will begin in September and December respectively. Finally, the commission adds that banking hours should be extended around the date of transfer to the euro to ease the changeover. The period during which both euros and the Slovenian tolar will be in circulation is to last 14 days (past experience has shown this to be sufficient), but prices shown in both currencies, which became compulsory on 1st March 2006, will continue until the end of June 2007.
At an earlier stage in their preparations, Cyprus and Malta are encouraged to speed up to be ready to join the euro zone in 2008, as they are aspiring to do. Cyprus still has no national changeover plan, giving precise guidelines to public and private operators, and Malta has only recently adopted such a plan, says the Commission. Estonia, which aspires to adopt the euro on 1st January 2008, Slovakia (1st January 2009), Lithuania (target date to be decided), and Latvia (date to be decided) have changeover plans, while the Czech Republic (1st January 2010) is still at the very early stages and there is nothing to report from Hungary (1st January 2010) or Poland (date to be decided). The Commission encourages all Member States to have a Plan B, particularly with regard to communication, in case the date of entry should have to be pushed back, and players in every sector have to be kept informed.
More generally, the Commission insists that formal agreements are reached between retailers and consumers on price stability (code of conduct, ethical code, etc.). Price monitoring and publication of findings will serve to reinforce consumer confidence, says the Commission, anxious not to feed the perception among citizens of a sudden and excessive rise in inflation. Most countries are planning “appropriate” front loading and sub-front loading measures over varying periods, says the Commission, which recommends prices being indicated in both currencies for a period of six to twelve months only so as not to slow down the mental changeover. While Estonia, Lithuania and Slovenia, have adopted and started their communication strategies, Cyprus and Malta only finalised theirs in April 2006. Latvia and Slovakia have drawn up a first draft, and Poland and Hungary have not yet planned any communication or information activity.