After years of preparatory work, purse string tightening and a plethora of fiscal sacrifices, Malta was yesterday given the final go-ahead from the EU’s economy and finance ministers to adopt Europe’s single currency.

Meeting yesterday morning, the EU’s Economic and Finance Ministers Council (ECOFIN) approved Malta to hold its own E-Day on 1 January and, in a decision bound to have quelled many fears, also left the exchange rate between the euro and the Maltese lira where it has been for the last two years – at Lm0.4293 to the euro.

Addressing a press conference in the wake of the announcement, the EU’s Economic and Monetary Affairs Commissioner Joaquin Almunia paid heed to Malta’s efforts toward fulfilling euro convergence criteria, and urged the country to turn its full attention to preparations for the monumental currency changeover – Malta’s second in living memory, following the shift from pounds, shillings and pence to decimalisation in the early 1970s.

Portuguese finance minister Fernando Teixeira Dos Santos, whose country currently holds the EU presidency, hailed the decision as “a historic turning point for the EU”, while pledging to provide all the support necessary as Malta continues to foster increased budgetary discipline, macroeconomic stability and competitiveness in the economy.

Finance ministers also gave fellow new EU member and island state Cyprus their approval to join the eurozone on 1 January, which will bring eurozone membership, including Malta, to 15 states.

Technically speaking, Malta will become the 14th country to adopt the euro thanks to the one-hour time difference with Cyprus.

Malta could not have chosen a better day to have its interest in what is, arguably, the world’s strongest currency finalised, with the euro having reached an all-time high against the US dollar of $1.3716 to the euro yesterday.

Thirteen states of the EU27 currently use the euro – Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxemburg, The Netherlands, Portugal, Austria, Slovenia and Finland – 12 of which have been using the currency since its initial introduction on 1 January 2002, while the currency has been in use in Slovenia since the beginning of 2007.

ECOFIN yesterday encouraged Malta to continue with the appropriate policies to ensure it will make the most of the advantages of eurozone membership, especially with respect to budgetary rigour, structural reform and maintaining the competitiveness of the economy.

Now that Malta’s approval for eurozone membership has been finalised, attention will turn to preparations for the big changeover, to be coordinated by the Central Bank of Malta and the National Euro Changeover Committee. The final master plan for the changeover will, in fact, be published tomorrow.

Malta’s delegation to the ECOFIN meeting was led by Prime Minister Lawrence Gonzi, Finance Ministry Parliamentary Secretary Tonio Fenech, Malta’s Permanent Representative to the EU Richard Cachia Caruana, Central Bank Governor Michael C. Bonello and other officials.

Addressing the Council yesterday, Dr Gonzi cited Malta’s eurozone accession a logical step following EU membership and heralded the country’s adoption of the euro would increase Malta’s competitiveness and make the country more attractive for both local and foreign investment.

The Malta Bankers’ Association yesterday pointed out that with immediate effect, banks in Malta will begin accepting euro banknotes deposited by businesses into Maltese lira accounts free of exchange rate charges that are normally applicable to foreign currency deposits.

The arrangement, the MBA adds, is limited to euro banknotes acquired by businesses in settlement of goods or services, and does not apply to euro banknotes acquired with no relation to any underlying sales of goods or services.

Reacting to yesterday’s announcement, Malta Chamber of Commerce and Enterprise president Victor A. Galea commented, “It is indeed a historic milestone which will further enhance Malta’s competitiveness and strengthen the way we do business.” The chamber added it was important to ensure the mandatory dual-pricing regime is respected and observed so as to help with price stability and consumer confidence.