Dual pricing announcement 'soon'

It will soon be made known when retailers and the service industry must start displaying prices in both euro and lira.

Phased in gradually, dual display of prices would start on a voluntary basis followed by a period of mandatory dual pricing, according to Joseph F.X. Zahra, chairman of the National Euro Changeover Committee (NECC).

Fielding a question on the introduction of dual pricing during a Vodafone Economic Forum at the Radisson SAS yesterday afternoon, Mr Zahra said there would be a period where businesses would be "encouraged" to display prices in both currencies. This would be followed by a period during which it would be mandatory to price items or services in both currencies.

"The starting dates will be made known soon. What is definite is that the dual pricing period would end on June 30, 2008," Mr Zahra said. He stressed that dual pricing was for display purposes only and the lira and the euro would be allowed to circulate together for just a few weeks after January 1, 2008.

Lawyer Andrew Borg Cardona, who was the moderator of the forum for businesses and self-employed entitled Are You Fit For The Euro?, immediately asked the NECC chairman to clarify the issue, adding that he had the impression that the introduction of dual pricing had already been set.

Initially, mid-2007 had been set as the dual pricing date. Early in April, however, the Cabinet announced that dual pricing must start as from January 1, 2007 - six months before the dual pricing period normally required by the EU - so that the public may get used to the value of the new currency.

The decision was reversed following heavy criticism from organisations represented on the NECC - most notably the Chamber of Small and Medium Enterprise (GRTU) - which claimed that the Cabinet had forged ahead with a mandatory date disregarding advice given by experts. The GRTU went as far as accusing the NECC of being a front for the government's unilateral decision.

Replying to Dr Borg Cardona's question, Mr Zahra said that though some had given the impression that decisions were being taken "behind closed doors", the NECC was taking into consideration the feedback received from different sectors so as to find a balance.

"My style is for consultation. We are prepared to listen, even if it is a challenge to meet the demands of different sectors. We need a balance which makes all sectors feel comfortable," he said.

In an interview with The Times on June 15, Mr Zahra had said that dual display would still start on January 1, 2007, albeit gradually and phased in for different sectors.

As expected, an issue brought up during the seminar was inflation. A couple of speakers said studies carried out in the first countries to adopt the single currency showed that the average price increases that could be directly attributed to the euro were 0.3 per cent.

In Italy, a country which the Maltese know very well, the euro was thought to have increased prices giving rise to abuse.

Statistics, however, showed that much of the inflation was due to other factors, such as taxes, introduced before the changeover took place. Moreover, the euro had become embroiled in a political controversy when Silvio Berlusconi, then Prime Minister, claimed that inflation had come about due to the previous government's decision to join the euro.

Mr Zahra said he had full faith that Maltese businesses would rise to the occasion and make the changeover process a success, stressing the need for preparation.