The European Commission yesterday issued a report praising Malta for its preparations to introduce the single currency on 1 January 2008 and at the same time reprimanded Cyprus, the other country adopting the euro on the same date, for lagging behind in its preparations.

The Commission said that “Malta’s practical preparations for the introduction of the euro are very well advanced. The country’s communication activities on the euro are exceptionally comprehensive and of a very high quality. Malta should maintain the current momentum of its preparations with a view to an efficient and smooth changeover.”

This was the conclusion in the fifth report of the Commission which was sent to the Council, the European Parliament, the European Economic and Social Committee, the Committee of the Regions and the European Central Bank.

In the fourth report, the Commission concluded that the “second updated Masterplan for the Euro Changeover in Malta” addressed the relevant changeover aspects in a detailed and comprehensive manner, while some features required further specification.

In its report, the Commission explained that since January this year, banks were obliged to accept deposits of euro banknotes into euro-denominated bank accounts without the imposition of bank charges. In the absence of fees for depositing euro cash into (euro) accounts, retailers who are prepared to accept euro cash payments already in 2007 (such as in the tourism sector) are legally required to do so at the conversion rate without any charges.

In addition, since the irrevocable conversion rate was fixed by the Council on 10 July, credit institutions accept, on a voluntary basis, euro banknotes deposited by their business clients into Maltese lira accounts at the conversion rate and free from any exchange charges.

Frontloading of euro banknotes to credit institutions will start in late September/early October 2007, and frontloading of euro coins in late October/early November 2007. Sub-frontloading operations to businesses will start on 1 December 2007, together with the distribution of coin starter-kits with a value of EUR131 for small businesses, notably retailers.

The public will be able to buy mini-kits worth EUR11.65 as from 10 December 2007. In addition, as from 1 December 2007, credit institutions will exchange Maltese lira into euro, and vice-versa, at the irrevocably-fixed conversion rate without any exchange charges. The public will however be reminded that the euro will only become legal tender on 1 January.

Around 60 per cent of all ATMs (approximately 150 in all) will dispense low-denomination euro banknotes (EUR10 and 20) as from 1 January at midnight, while the remaining ATMs will all be converted during the course of the day.

As Malta does not have a national mint, the Maltese euro coins are produced by the Monnaie de Paris, following a public call for tenders.

In order to address consumers’ fears of price increases in the changeover period and to contribute to stable prices, the government and the National Economic Changeover Committee launched a comprehensive set of measures.

Firstly, the FAIR (Fair-pricing Agreements in Retailing) initiative became effective in January 2007 and more than 5,000 businesses have subscribed to it so far.

Secondly, the Euro Observatory, established in the last quarter of 2006, coordinates the FAIR initiative, monitors price developments during the changeover period and carries out investigations in cases of alleged infringements of the provision on the dual display of prices and of commitments under FAIR. The Euro Observatory is supported by 70 Euro Assistants.

Thirdly, a series of anonymous “mystery shopping” exercises are being conducted by a trade union on behalf of the NECC, following a call for tenders. The prices of 200 products and 40 services are being monitored. The results are analysed with a view to publishing sector specific pricing trends as well as specific cases of high price increases in the changeover period.

Finally, as a general rule, monetary amounts in national legislation and any amounts to be paid or accounted for (e.g. fees, penalties) will be replaced with the exact equivalent in euro resulting from the application of the conversion and rounding rules.

Given the initially relatively low support ratings for the euro in Malta, in autumn 2006, the NECC started a comprehensive and intensive communication campaign in preparation for the changeover. The first phase of the information campaign (until May 2007) focused on creating awareness of the core messages and the benefits of the euro among the public and in specific consumer sectors via a telephone helpline (154), daily television and radio spots, a euro newsletter, weekly adverts in national newspapers, targeted articles in magazines, conferences and seminars. The campaign that will be intensified in a second phase, aims to reach every single group of society and therefore uses a multitude of channels and tailor-made tools (e.g. audiovisual and printed matter were developed to reach and educate vulnerable people and their tutors).

The mass media campaign was supported by the distribution of a euro calendar to all households and the telephone helpline (154). The intensified mass media campaign again consists of daily television and radio spots, a euro newspaper for the public, weekly adverts in all national newspapers, targeted articles in magazines, conferences and seminars. For business target groups, special attention was given to the FAIR Pricing Agreement in Retailing.

These activities have clearly borne fruit as the latest Flash Eurobarometer results show an impressive improvement in support of the euro and in the perceived level of information.