The euro changeover

Joseph F.X. Zahra, chairman of the National Euro Changeover Committee (NECC), recently addressed members of the National Council of Women (NCW), affiliated organisations and the public at NCW headquarters in Blata l-Bajda.

Mr Zahra outlined NECC's vision and mission, and focused on Malta's preparation for the introduction of the euro. The NECC's main objective is to ensure an efficient, successful transition to the euro for the good of society at large.

It is also the NECC's aim to educate and provide public and consumer information through an effective communications campaign.

To be able to carry out its task, the NECC endeavours to develop effective strategic plans through collective participation and committed leadership.

The communications campaign being embarked on by the NECC is based on two operating principles. These are simplicity and flexibility. It is designed to prepare the public well in advance before the introduction of the euro.

Mr Zahra pointed out that an integral aspect of the NECC's communications strategy is to target specific sectors of society, mainly consumers, businesses and vulnerable groups. This latter includes the elderly, people at risk, the visually impaired and persons with disability.

Guidelines published by the NECC include the optional display of prices in euro, the conversion of past data into the euro, the use of the term "euro" in the Maltese language and the rounding and smoothing of the amounts in Maltese lira converted into euro.

E-Day, or the target day when the euro becomes legal tender, is January 1, 2008. The NECC chairman explained how the Maltese government has opted for a Big Bang scenario with a phasing out period.

A Big Bang scenario means that entry into the euro area will coincide with the introduction of the euro notes and coins while the phasing out period is a period after E-Day in which certain limited financial reports can be drawn up in Maltese lira.

Mr Zahra gave details on how Government wishes the dual display of prices to start on January 1, 2007; this is when prices are to be shown both in Maltese liri and in euros. "This is an important instrument which assists consumers to learn the value of goods and services in euro and be able to compare prices," he said.

"Consumers will benefit from a one-year exercise which will also facilitate the actual changeover and create confidence that the conversion rates are being adhered to and used properly."

An important issue raised by Mr Zahra related to the difference between real inflation and perceived inflation. In fact, studies in countries which adopted the euro in 2002, reported that citizens experienced a 0.2 to 0.5 per cent rise in prices directly influenced by the euro changeover.

"Paying particular attention to price conversions of daily consumables such as milk, coffee, bread and the newspaper is vital for a smooth changeover to the euro," Mr Zahra emphasised. The more quickly and thoroughly the public adjusts to the euro, the smoother the changeover for the economy in general and for the consumer in particular.

For more information on the euro changeover contact the National Euro Changeover Committee on 2205-0000 or e-mail euro@gov.mt.