The memorandum of understanding signed between the government and the Malta Chamber for Small and Medium Enterprises (GRTU) is an important breakthrough for the country in more ways than one.

The GRTU and the government rarely see eye-to-eye and therefore it is a welcome change to have them reaching an agreement on what will be an important development for Malta – the change-over to the euro currency on 1 January 2008.

The GRTU has not opposed the government’s decision to join the eurozone and the chamber believes that the euro will have a positive effect on the economy. The GRTU has emphasised that, while the general feeling among its 9,000 or so members is that there is no objection to the adoption of the euro, many are still concerned about who will be bearing the costs of the changeover.

The GRTU has found it very difficult to accept certain principles exercised by the National Euro Changeover Committee (NECC). As the director-general of the chamber admitted on Monday, it was more a question of the regulations being imposed by the NECC than anything else. The GRTU felt that its members were being hindered rather than helped to switch to the new currency.

Although the GRTU and the NECC may still disagree on certain points, the presence of the parliamentary secretary in the Finance Ministry seems to have helped smooth out any differences.

The government is certainly happy that it has the GRTU on its side and the latter are probably satisfied that the government has finally got round to understanding its position and that of its members.

At the end of the day, the MOU is not just a piece of paper to show that the government and the GRTU can work together on important issues or that they are capable of not crossing swords on every single issue.

It is a clear sign that the government and the GRTU need to work together to protect the consumer because, ultimately, the arguments related to changeover costs incurred by businesses, unless properly addressed, will have a negative impact on the consumer. An irate businessman who has to spend money on a new system will not carry the burden alone but factor in this cost in his prices. And this is something that the government does not want.

In essence, the agreement binds the GRTU to ensure that its members treat consumers in a fair manner and that both the government and the chamber will work to “instil a positive attitude” among consumers and shop owners.

Both agree that an increase in prices for the sole reason that a currency changeover is taking place is unacceptable, since it undermines consumer confidence in the euro changeover process. They both want to avoid abuse as much as possible, and at the same time ensure that the changeover will be an easy process for everyone.

The agreement will allay fears that GRTU members will be incurring unnecessary expense – such as changing cash registers – with the government offering incentives in the form of tax credits to those who upgrade their systems. The chamber has also agreed to promote and encourage its members to subscribe to the FAIR initiative in order to enhance consumer confidence during the changeover process.

With the support of the changeover committee, the GRTU will also inform its members about all aspects of the euro changeover. To this effect, the NECC and the GRTU will co-finance information and communication initiatives specifically targeting the owners of small and medium-sized enterprises.

This positive development will give an added boost to the government’s changeover plans. The more the government has the support of the business community and the public, the easier the changeover will be in 2008. With its mind at rest that the issue is no longer a political football, and that the business community is willing to work with the government and willing to protect the consumer, the government can now focus its efforts on meeting the economic criteria to join the eurozone – and that basically means tackling Malta’s high rate of inflation.