Ensuring a smooth and fair euro changeover process

This is the start of a challenging year, which should see the nation adopting the euro as its national currency on January 1, 2008. This is indeed a historical step, which makes us all proud of the completion of the economic integration within Europe - the next logical step for Malta that should lead to significant benefits to consumers, businesses and other sectors of our society.

The government is increasingly optimistic that the necessary convergence criteria that should enable us to introduce the euro on January 1 of next year will be met. The political consensus among all the social partners of our society focuses our energy to dedicate this year to ensure a smooth, fair and successful changeover in everyone's interest.

From the outset, the government declared its commitment, through the setting up of the National Euro Changeover Committee (NECC), to work with consumer interest groups, the private sector, and a wide representation of civil society to ensure that everyone is geared up and mobilised to partake in order to ensure that information in relation to the euro changeover process reaches everyone - consumers, businesses, vulnerable groups, children, the elderly, educators and civil society in general.

The NECC, with the assistance of the European Commission, is gradually unfolding its communications campaign aimed at ensuring that nobody will be left behind during or after the changeover. At the same time, our communications efforts need to be solidly grounded into a practical, workable and credible policy framework to ensure that the changeover minimises fears and preconceived concerns.

It is precisely for this reason that the necessary legal and administrative infrastructure has now been set up to ensure that the changeover process will be seamless and fair. The changeover process and the introduction of the euro belong to everyone - consumers, retailers, businesses, banks and workers. The advantages linked with the euro are evident for the different sectors of society but for the country to be able to fully reap these advantages we have to secure a level playing field that should enable the business community to cope with the euro changeover process without any unnecessary burden or bureaucracy. At the same time, it has to be ensured that the public and consumers will put their mind at rest that there will be no abuses during or after the changeover process and that this project as such should not lead to any increase in the cost of living.

Needless to say, the government strongly believes that the absolute majority of retailers and business operators have consumers' interest at heart and believe that it's in their best commercial interest to ensure that best practices are followed during the changeover. However, we are in duty bound to address the concern of the public - also as constantly being expressed in the surveys published by the European Commission - that there could be abuses during or after the introduction of the euro or the cost of living could increase simply because of the euro.

The NECC is working together with the Malta Chamber of Commerce and Enterprise, the GRTU, the MHRA, the MEA, the FOI and other constituted bodies to ensure that consumers' confidence in the euro changeover process will be boosted by business and retailing organisations. We are also, through the NECC and the setting up of the Euro Observatory, securing assistance and a regular flow of information with business operators - irrespective of their size.

The government has also very recently published a legal notice that regulates the dual display of prices. The legal notice provides the necessary infrastructure that should enable the Euro Observatory to successfully manage the FAIR (Fair-pricing Agreements in Retailing) initiative among retailers and business operators. This is an initiative specifically aimed at creating a level playing field among retailers and traders and at the same time boosting consumers' confidence in the euro changeover process as well as in our business community.

The response of retail outlets and business has been overwhelming, with hundreds already starting the process to join this initiative - indeed a remarkable result within a very short span of time.

The regulations also set the framework within which dual display obligations during the voluntary and mandatory periods are to be satisfied. Equally important are the regulations, which the government is determined to strictly enforce, that concern the correct conversion and rounding of monetary amounts from lira to euro. The regulations also create a new obligation on retailers and businesses not to increase prices during the changeover - indeed, unjustified price hikes will be investigated and, if necessary, acted upon.

It is essential for business operators to be familiar with the new regulations and I urge retailers and traders to contact the NECC should they require more information on this subject.

My direct appeal to retailers, business operators and the private sector is simple yet strong - if you want to ensure a successful and smooth changeover for your organisation, you have to start preparations as of now. Leaving it to the last minute can be costly and disruptive. The government - through the setting up of the NECC and the Euro Observatory - will be providing all the assistance necessary for your organisation.

We do expect, however, ethical and correct pricing strategies. Unjustified price hikes are not only unacceptable but are not in the country's economic interests especially in a frail and competitive industry such as tourism and the service sector. Increasing prices unjustifiably will only have a boomerang effect on those same businesses on two fronts: higher compensation costs as the retail price mechanism kicks, and, as happened in other countries, lower sales are experienced as consumers move to shops offering fairer deals.

This leads me to my second appeal for businesses, that is, to seek to join the FAIR initiative as early as possible. This will give you assurance that your organisation is moving on the right track during the changeover process and will also boost the consumers' confidence in your organisation.

Mr Fenech is Parliamentary Secretary in the Ministry of Finance. He also chairs the government's steering committee coordinating the euro changeover process.