Euro information

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

What are the disadvantages of the euro?

On the date of the adoption of the euro, the national currency ceases to exist and responsibility for monetary policy is relinquished to the European Central Bank. Many may see this as a drawback. One might consider, however, that Malta trades heavily with countries of the Eurozone and our local economic cycle is already well incorporated within the European one. Our monetary policy today, therefore, is already influenced by decisions taken by the European Central Bank.

Another issue that is frequently raised concerns the loss of one's national identity. Certainly one cannot imply that the Germans or the French have surrendered their cultural identity due to the adoption of the euro. The same applies to all the other citizens of the Eurozone countries.

What are the advantages of the euro?

A strong and credible currency will help to attract additional foreign direct investment and will encourage the convergence of economies.

The elimination of foreign exchange risks, cheaper cross-border transaction costs and the transparency of prices within the Eurozone all help reduce the cost of travelling and all have a positive impact on our economy. The euro will therefore make travelling easier, lower operating costs and promote investment. These are the reasons why government aims to join the Eurozone as early as possible, once the economic criteria are met.

What steps will the government take to control price increases during the changeover to the euro?

The government wants to ensure that the changeover to the euro will be smooth and efficient.

As Malta prepares to adopt the euro, particular attention will be given to the monitoring of prices. According to surveys conducted among the Maltese population, many seem to think that the euro will cause prices to rise. Through the Euro Adoption Act, measures against unjustified price increases such as dual display will be given legal status and thus become enforceable.

The dual display of prices will also be an important instrument in this regard. This will create confidence among consumers who will learn the value of goods and services in euro and will be able to compare prices. The dual display of prices is for information purposes only and in no way does it encourage payments in euro.

Which countries have adopted the euro?

Twelve countries have so far adopted the euro: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Slovenia and Spain. Other EU member states are in the process of introducing the euro. Slovenia was the first country from the ten new member states to join the Eurozone on January 1 this year. Malta and Cyprus will adopt the euro on January 1 next year.