Brussels, 16/07/2007 (Agence Europe) - Less than six months before Cyprus and Malta adopt the euro, the Commission took stock of practical preparations for the transition to the single currency in both countries. This fifth report, which was adopted on Monday 16 July, also concerns the other member states which have not yet adopted the single currency, particularly Slovakia, which is hoping to do so in early 2009 (only the United Kingdom and Denmark do not have to introduce the euro). According to the Commission, the preparations are going well in both Cyprus and Malta, which, further to the approval of the finance ministers of the EU27, will join the eurozone on 1 January 2008 (EUROPE 9465). If Valetta is doing “extremely well”, Nicosia needs to step up the pace, the spokesperson to Commissioner Almunia told the press.
Cyprus is planning a period of double circulation, during which the national currency and the euro will both be legal tender. Compared to the situation at the last assessment in November 2006, progress has been made and the national transition plan of the country has been updated (EUROPE 9304). The period of advance distribution for euro coins will start on 22 October and banknotes on 19 November, to conclude in mid-December at the latest. It is also in the last month of the year that euro kits will be offered to businesses, retailers and the public. On 1 January 2008, the day of the transition to the euro, certain banks will open to facilitate the exchange of Cypriot pounds into euros. From this date onwards, traders will give change in euros only. The displaying of prices in both currencies will be applicable from 1 September 2007 to 30 September 2008. In order to respond to the fears and concerns of consumers and to encourage the establishment of fair prices during the changeover, the government has provided incentives for businesses and retailers to adopt a “fair tariff code”, valid for one year starting on 10 July 2007. In its conclusions, the Commission stresses the need to ensure the correct implementation of this code, and a communication campaign on the euro.
Malta is also planning a double-circulation period of one month for the Maltese pound and the euro. Advance distribution for commercial banks will start at the end of September or early October for banknotes in euros and a month later for coins. Distribution by credit institutions to retailers and businesses will start on 1 December, at the same time as the distribution of euro starter kits (available to the general public as of 10 December). From 1 December, credit institutions will begin to exchange Maltese pounds for euros and vice versa, free of charge. Price displays in both currencies will become obligatory from the irrevocable setting of the conversion rate by the Ecofin Council of 10 July, and will remain in place until 10 June 2008. Several measures have been set in place to limit the risks of abusive price increases. A fair pricing agreement for retail trade (FAIR initiative) has been in place since January 2007 and provides, amongst other things, for fines for subscribing companies failing to respect their commitments. A monitoring centre for the transition to the euro, a series of anonymous assessments carried out by a union organisation, and regular controls on 200 products and 40 services complete the raft of measures. Preparations are “at a very advanced stage” and the country's communication activities are “extremely complete and very high-quality”, states the report.
Slovakia is not faced with the same level of urgency, but the country will have to “speed up its preparatory work considerably” on a number of points, amongst other things to build up consumer confidence in price stability. Since the complete national transition plan was adopted in July 2005, the pace of preparations has slowed in Slovakia, observed the Commission, which added that the details concerning advance distribution, the withdrawal of cash in Slovakian crona and the communication strategy have not yet been defined. Slovakia, which hopes to adopt the euro on 1 January 2009, is planning a period of double circulation lasting 16 days. Advanced distribution of coins will start in September, with the distribution of notes starting in mid-November. The obligation to display prices in both currencies will last one year from the introduction of the euro.
Apart from Romania, which has set itself a target of 2014 for its accession to the eurozone, the other countries have not yet definitively established the date on which they will adopt the single currency. The Czech Republic has put forward a good example of sufficiently advanced preparations for the transition to the euro in the absence of a target date, according to the Commission report. Prague has adopted a complete national transition plan, whilst Estonia and Lithuania have recently updated theirs. In the other member states, no specific developments have been noted since the last report was published, the Commission adds.
The report on practical preparations for the forthcoming enlargement of the eurozone is available at: http: //ec.europa.eu/economy_finance/publications/euro_related/2007/enlargement_euroarea_en.htm (ab)