Although dual pricing in the euro and the Maltese lira will only become obligatory in 2007, the decision to publish guidelines on the matter, until specific legislation is enacted and comes into force, makes a lot of sense.

First of all, the guidelines, published last week, are intended to suggest best practice thereby ensuring transparency on euro pricing for traders who choose to display prices in both currencies.

A number of retail outlets have been using dual pricing for quite some time, especially those located in areas frequented mainly by tourists. One of the main concerns is that shop owners will tend to round off the price in euros in a way that is financially beneficial to them but more costly for those who want to buy something in euros. In some cases, the price in euros could be up to 10 per cent higher than the price in Maltese liri.

The guidelines published by the National Changeover Committee (NECC) ensure that any currency conversion is consistent in every shop. According to the NECC, the price displayed in euros should be the price of the goods and/or service in Maltese liri at the central parity rate of Lm0.4293 for every euro to the nearest euro cent.

This makes a lot of sense and is also a guarantee that shop owners have not inflated their prices when converting to euros. Shop owners have the right to impose a charge associated with the exchange of the euro currency into Maltese liri, but this charge will have to be clearly and prominently displayed at the point of sale.

Although the Maltese will, for now, continue to pay in Maltese lira, tourists who want to pay in euros can – and they will – be able to check that they are not being charged a higher price than they should be. Visitors from European Union countries will be more attentive, because they have first-hand experience of what shop owners can get up to. The guidelines also make it clear that neither the owner nor the customer is obliged to make a transaction in the euro currency.

Malta is in a fortunate position because the government and the Central Bank are aware of the problems experienced by other countries when the euro was introduced. In publishing these guidelines, the NECC is not only responding to queries from consumers and traders, but addressing issues that will require clarification during the changeover period.

The NECC is being proactive, instead of waiting until the changeover to address the problems that will arise, and this is an extremely positive approach. With a set of guidelines in place, traders and customers will be able to prepare themselves mentally for what will happen when Malta joins the Euro-zone sometime in 2008. These guidelines establish a level playing field which is always desirable in business. They will also give the authorities, especially the Consumer Affairs Division, a running-in period during which they can monitor how traders are adapting to dual pricing. It will also give them the opportunity to identify, on the ground, the problems or possible signs of abuse, and how best to ensure a level playing field where pricing is concerned.

The changeover to the euro currency is still two years away but the NECC’s decision to publish the guidelines now, a full year before dual pricing becomes obligatory, is a wise one. It sends a clear signal to both traders and consumers that the authorities will not accept any abuse now or when the euro becomes legal currency.

It is also the beginning of a new process of change for Malta because, for the second time since independence, it will have to adapt to a new currency.