Do I have to change my insurance policy?

As all other forms of contracts, monetary amounts will be automatically converted into euro, on 1 January, according to the fixed conversion rate. This means that your insurance policy will remain valid, without any specific intervention required from your side. Your insurance provider cannot change any aspect of your insurance policy because of the euro changeover and without your consent.

Should I start converting my Maltese lira into euro now?

This is possible, but you will be paying charges for that resulting in loss of monetary value of your holdings. As from 1 December (e-day) no charges will apply.

Is it worth it to invest in euro now?

It is always better to check with a financial consultant first. What is definitely true is that charges apply at this stage in order to deposit Maltese lira into euro denominated accounts or investment funds. This means that the value of your holdings will decrease if you invest them in euro at this stage.

I am the owner of a small business. In what currency do I have to present an FS3 to my employees in January 2007 and January 2008?

In January 2007 (relating to employment in 2006), the FS3 has to be presented in Maltese lira (dual display in euro is optional). In January 2008 (relating to employment in 2007), the FS3 must be presented in Maltese lira with euro amounts dual displayed. Dual display is mandatory. In January 2009 (relating to employment in 2008), the FS3 has to be presented in euro.

I have some stamps in Maltese lira. Up till when can I use them?

You can use them till the end of the dual circulation period, that is 31 January. Following that, you will have another two months, until the end of March, to exchange Maltese lira stamps for euro-denominated ones.

In which currency do I have to submit my company’s financial declarations for periods that end before e-day?

In the case where returns or declarations are submitted prior to 1 January 2009, an organisation submitting statutory returns or financial declarations where the financial period ends prior to e-day shall report in Maltese lira. When an organisation is submitting returns/declarations for a financial period ending prior to e-day, but the date of submission is on or later than 1 January 2009, the organisation can opt to report in euro or Maltese lira. Whichever reporting currency is chosen, the whole report must be specified in that currency.

In which currency do I have to submit my company’s financial declarations for periods that end after e-day?

All statutory returns and financial declarations drawn up for financial periods with a year end on 1 January or later shall be reported in euro.

What about VAT reporting? What currency will be used?

The VAT department will be revising VAT reporting periods to ensure a cut-off date coinciding with 31 December. Hence all VAT registered traders and organisations shall receive a VAT return in December, covering the period up to and ending 31 December. The return will be duly filled in Maltese lira and submitted to the VAT Department by 15 February. Any amounts payable or refundable will be paid in euro.

More about the euro and changeover

Which countries use the euro?

The euro is the single currency of 13 European Union member States (Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, The Netherlands, Portugal, Spain and more recently Slovenia). These countries are home to around 320 million people. The euro is also used in Monaco, Vatican City, San Marino, Andorra, as well as in Montenegro and Kosovo.

Are euro banknotes and coins the same across the eurozone?

All euro banknotes are almost the same. The only changes reflect the extended maps to include the newly joined member States and the change in signature reflects the change in the President of the European Central Bank.

Coins have a common side and a national side. All “Maltese” euro coins can be used in all eurozone countries and vice-versa.

Can Malta decide not to join the eurozone?

No. Malta has committed itself to join the euro by acceding to the European Union. Therefore in principle, the Maltese population accepted to introduce this new currency through the referendum to join the EU.

What are the different euro notes?

The different notes are: Euro 500, 200, 100, 50, 20, 10, 5. The coins represent 2 and 1 euro, and 50, 20, 10, 5, 2 and 1 euro cent.

Why was the euro introduced?

There are various reasons for introducing a common currency. For most EU countries today, a very high percentage of trade is made with other EU member States. Most currencies suffered severe economic instability before joining the eurozone. The new currency removed exchange rate risks from the internal market, cut the costs of transactions and encouraged firms to trade across national borders. It also forced EU States to adopt responsible economic policies that contained inflation and increased real living standards.

In simple terms, what criteria need to be satisfied for a member State to join the eurozone?

The criteria that need to be satisfied are also known as the Maastricht criteria. These are:

Inflation: no more than 1.5 per cent above the levels of the three best-performing EU States.

Long-term interest rates: no higher than two per cent above those for the best performing EU member States.

Budget deficit: This must not exceed three per cent of GDP.

Public debt: Overall level must be below (or falling towards), a reference level of 60 per cent GDP

Exchange rate: A stable rate within the European Monetary System for two years.

Central bank: There must be an independent national central bank.

How does the eurozone operate?

General economic responsibility for monetary union lies with the Council of Economic and Finance Ministers (ECOFIN) and the European System of Central Banks (ECSB). Monetary policy, however, is the domain of the European Central Bank (ECB). The ECB is charged with maintaining stability for the euro and has sole responsibility for adjusting interest rates. The European Council, formed from among the Heads of State of EU governments, is the body that decides who will be allowed to adopt the single currency.

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 1 January 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?

The 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 achieve greater control over their economic policies. This will provide more stability and encourage the growth of the European economy.