Euro information

Melvyn Mangion from the National Euro Changeover Committee answers your questions on the euro:

When was the new currency issued?

Conversion to the euro was one of the largest projects of the European Union. It involved a massive publicity campaign and a logistical exercise extending across 12 nations and over 300 million people.

In many Eurozone countries the euro was made available to clearing banks and major corporations during late Autumn 2001. The currency formally entered into circulation on January 1, 2002, and ran in parallel with national currencies until the end of February 2002.

How does the single currency affect EU member states outside the zone?

EU member governments outside the Eurozone cannot take part in the Euro-13 Council called the Euro Group, that deals with economic and fiscal policies within the common currency area.

However, these countries must still avoid excessive government deficits and continue to regard their exchange rate policies as a matter of common interest. They have no representatives on the board of the ECB and no voice in decisions about Eurozone interest rates, even though these will directly affect the value of their own currencies.

Have Eurozone states lost their sovereignty and economic autonomy?

All economies are vulnerable to external monetary speculation that places national independence at the whim of global financial markets. By pooling national interests, governments are protecting their new currency from external speculative influences and achieving greater control over their economic policies. This will provide more stability and encourage the growth of the European economy.

Does the euro changeover provide any financial benefits for a retailer/businessman?

While there are certain one-off costs associated with the changeover (e.g. changing IT systems, HR efforts and menu costs), these are by far exceeded by the longer-term financial benefits. The latter are mainly related to the fact that the euro eliminates the need to exchange the Maltese lira into euro (the majority of Malta's trading activity is carried out with Eurozone countries).

For the importer, this means no more charges and risks related to the exchange rate, while at the same time increasing the possibility to compare prices between different exporters. Certain studies have estimated the net financial benefit at 0.5% of GDP.

Businesses that are in any way related to the tourist sector should benefit from a potential increase of Eurozone tourists and/or the potential increase in spending power since they can use their 'home' currency in Malta without any charges.