It is highly likely that the target date set by the Maltese government for the changeover from the Maltese lira to the euro will be reached. As things stand now, Malta should be able to join the eurozone as from 1 January 2008.
The government has for long been preparing the country for a changeover that will bring about great changes in our way of life. We will soon have to start to think in euros, rather than in liras, and although such a shift takes time to be understood and implemented well, the public will soon get used to the idea in the same way we all did when there was a shift from the pound to the lira in the early 1970s.
Of course, the information campaign will be stepped up all through 2007, and the more the changeover date draws near, the more the people will need to be told what the change is going to mean to them. More about that later.
That Malta will, in all probability, be able to join the eurozone on the established date was confirmed by the European Economic and Monetary Affairs Commissioner Joaquin Almunia last week.
Basing on figures in a six-monthly report issued by the EU, Malta’s fiscal and economic performances seem to be well in line with the criteria established and, although a final decision will only be taken next year, the country is on track to move from the lira to the euro.
The country’s deficit for this year is forecast at 2.9 per cent and it is estimated that for next year this will go down to 2.7 per cent. This will in turn mean that public debt will continue to be reduced. The country’s economy is growing at a rate of more than two per cent every year – all these are positive indicators for Malta.
The only difficulty seems to be the rate of inflation, which at over three per cent is higher than the established criteria and observers believe could be a stumbling block in the run-up to the eurozone. The government has said that all is under control, and the EU report states that it will fall to around 2.4 per cent in 2008.
Last week, Malta received a second piece of good news from the European Commission, which had words of praise for the preparatory work that is being carried out towards the euro changeover.
Still, the same report discovered that the Maltese are rather sceptical – only 48 per cent were happy with the changeover, while 62 per cent said they were not informed much about the euro. Once again, the Maltese showed their innate resistance to change, but we are sure that with clear guidelines and ample information this situation will change.
And this is why the National Euro Changeover Committee must come up with a comprehensive campaign that covers all aspects of the shift. The NECC has already been very active in this regard, but the coming year will certainly be more busy for the committee as the changeover date draws closer.
One other positive aspect on this issue is the Malta Labour Party’s decision to respect the euro introduction date. In his reaction to the budget, Labour leader Alfred Sant said that if his party continued to express doubts, this will have an adverse effect on the economy.
Some have interpreted this as another u-turn by the MLP; others have said that the MLP’s intentions were to remove the euro introduction from the political agenda as it could have cost it the coming election in the same way as it has lost the one held in 2003 over EU membership.
What is important is that there is now a consensus on the issue, and that no spokes will be put in the euro wheels.