The Chamber for Small and Medium Enterprises – GRTU has warned of a head-on collision with the government if dual-pricing is introduced as planned on 1 January 2007. The chamber told the government yesterday that it would instruct its members not to obey the directive if the authorities do not listen to the GRTU’s members’ concerns.

The dual-pricing mechanism allows retailers, for example, to display the price of their product in both the Maltese lira and in the euro. The rationale behind this decision makes sense: it is an opportunity for customers to become accustomed to the new currency and it also lessens the impact the changeover will have on price structures when the euro becomes legal tender on 1 January 2008. If the public starts getting used to converting prices from the lira into euros from now, there would be little room for retailers to round off figures to their benefit and, as a direct consequence, increases prices.

The argument holds very well if you are looking at the issue of dual-pricing from a consumer perspective and the government’s efforts to limit the impact on inflation. The GRTU, however, are seeing the matter from a totally different angle. They are not against dual-pricing in principle but rather the timing of the exercise and the duration of the dual-pricing period. The GRTU agree that dual-pricing is beneficial and certainly needed considering the impact a change of currency could have on the public and retailers – especially the latter.

What has set them on the warpath with government is the government’s decision to have a trial period of 12 months. The GRTU is insisting that this is way too lengthy and it will only increase costs for retailers who are already being forced to make sacrifices to balance the books. The GRTU is not calling for the abolishing of a dual-pricing period but rather reducing it to six months – a suitable period for the public to adapt to the changes, it has argued. They are also concerned that exchange rate costs, bank charges and other induced costs would be crippling for retailers.

The question that has to be asked is not ‘should dual-pricing be introduced’ but rather ‘for how long’? Both the government and the GRTU will have done their homework very well and, we would argue, both have valid arguments.

The National Euro Changeover Committee (NECC), which is responsible for the introduction of the new currency, may be concerned that six months is not enough for the public to adapt to the euro. However, is it aware that six months of extra costs for the retail sector could cause more harm than good when you look at the overall economic picture?

And if the GRTU’s allegation that a representative of the retail industry was not given the opportunity to attend meetings on the euro’s introduction is true, we must ask, why?

It would have made a lot of sense if the NECC listened to what the retailers had to say before taking the plunge.

The problem in this country is a total lack of communication when it is needed most. The government prides itself on having a wide consultation with the public and stakeholders on nearly every subject. However, somehow, someone always gets left out of the equation. The result: a heated debate that could have been easily prevented if someone bothered to make sure that all interested parties had a say in the matter.

The GRTU has made it clear that it will not obey any directive to introduce dual pricing on 1 January of 2007. That decision, certainly, would put more than a few spokes in the NECC’s plans for a smooth changeover in 2008.

We suggest that the GRTU and the NECC sit down some time before the end of the year and come to an agreement on this matter. It is in everyone’s interest that the transition to the euro is a smooth as possible. It’s already difficult as it is when politicians enter the debate.