Brussels, 28/11/2007 (Agence Europe) - Cyprus and Malta are well prepared for the introduction of the euro, the European Commission noted in its 6th report on practical preparations for the transition to the euro. This report, which was published on 27 November, focuses mainly on these two member states, both of which are to join the eurozone on 1 January 2008. The eurozone will then have 15 members. A working document prepared by the services of the Commission and annexed to the report examines the state of preparedness on the other countries of the EU which have not yet adopted the euro. “(Cyprus and Malta) must embrace this important step with confidence, but also with their eyes wide open to make sure that they are fully familiar with the new currency and to detect, and challenge, any abuse”, insisted Joaquín Almunia in a press release. He went on to call on the public authorities to show “prudence” in ensuring price stability.
Cyprus. Five weeks ahead of the changeover, preparations for the introduction of the euro have made considerable progress in the country, which seems well-prepared overall, states the Commission, which has noted good supplies of euro notes and coins. The frontloading of commercial banks started on 22 October for coins and 19 November for notes, and the Cyprus Central Bank states that the banking sector will receive about 80% of the value of euro notes that they will need before the month of January. The Cyprus Central Bank estimates that more than 60 million notes (worth €1.2 billion) and 395 million euro coins (of the value of €100.26 million) will be needed. Public opinion, however, remains divided on the subject of the transition to the euro. According to a Eurobarometer survey carried out in September, 67% of the citizens believe that they are “rather well” or “very well-informed” about the euro, but nearly three-quarters of respondents are concerned that price increases may result from the changeover to the single currency. In order to face this problem, prices must be displayed in both currencies from September, to be monitored by five Euro observatories.
Malta. Malta is also well-prepared, according to the Commission, having further refined and completed its practical preparations. The frontloading of banks with cash started in mid-September and 41.51 million euro notes (other value of €799 million) and 140 million coins (of the value of €39.29 million) will be needed to replace the Maltese lira in circulation. Businesses seem well-prepared, but around two thirds of the Maltese population (65%) are still concerned at the possibility of price increases due to the transition to the euro. Measures have been taken to appease these fears, particularly the FAIR initiative, under which more than 6500 businesses, representing around 80% of all retail points-of-sale, have pledged not to increase prices for products and services in the changeover to the new currency. Price stability agreements have also been concluded with the main importers and manufacturers.
The report is available at: http://www.ec.europa.eu/economy_finance/index_en.htm. (A.B.)