With little more than a month to go until Malta’s currency changeover, the European Commission yesterday found the country seems “well prepared” for the introduction of the euro on 1 January.

Over the last few months, the tempo of changeover preparations has been turned up a notch, during which time Malta has further refined and completed its practical changeover preparations, the EC found in its “Sixth report on the practical preparations for the future enlargement of the euro area”.

The report, published yesterday, is the last to include Malta and Cyprus – both of which join the eurozone at the inception of 2008.

The report, however, notes that particular attention should be paid to ensuring an appropriate level of sub-frontloading so that businesses will be able to give change exclusively in euros as from E-day.

According to Central Bank of Malta estimates, 4.5 per cent of the total banknotes to be introduced and 19.5 per cent of the coins are to be supplied to businesses as from 1 December and before 1 January by their banks under sub-frontloading agreements.

The estimates include 33,000 starter-kits for businesses, worth EUR131 (Lm56.24) each, and 330,000 mini kits for citizens, worth EUR11.65 (Lm5), and which will become available from banks as from 1 and 10 December respectively.

According to CBM estimates, a total of 41.51 million euro banknotes worth EUR799 million (Lm343.01 million) and some 140 million euro coins worth EUR39.29 million (Lm16.87 million) are required to replace the outgoing Maltese lira.

The CBM borrowed the necessary volumes of euro banknotes from the Banca d’Italia, while the Maltese euro coins were produced by the Monnaie de Paris and arrived in Malta between mid-September and the end of October.

Frontloading of euro cash to commercial banks started on 15 September. In total, approximately 92.5 per cent of the banknotes to be introduced into the Maltese economy – 38.43 million banknotes worth EUR749 million (Lm321.55 million) – and about 71 per cent of euro coins – 99.12 million coins worth EUR27.81 million (Lm11.94 million) – will be supplied to the 107 bank branches throughout the country before E-day.

As far as the changeover of automated teller machines is concerned, about 60 per cent of Malta’s 154 ATMs – which typically handle 306,000 withdrawals per week with an average value of EUR26.55 million (Lm11.4 million) – will begin dispensing low denomination banknotes, mainly EUR10 (Lm4.29) and EUR20 (Lm8.59) at midnight on new year’s eve. By noon on 1 January between 85 and 90 per cent of ATMs will be issuing euros, while the remainder will begin dispensing euros by 4pm.

Branches themselves, meanwhile, will be open as usual on 31 December and will be closed on 1 January. On 2 and 3 January, bank branches will only handle over-the-counter business with the public for cash deposits, foreign currency exchange and exchanges into euro. On 4 and 5 January normal banking hours will be extended until 4pm and during the extended opening hours they will only deal with cash deposits, foreign currency exchange and exchanges into euro.

According to recent figures published in November, 65 per cent of the Maltese population fear price increases resulting from the changeover, while a further 76 per cent are expecting price abuses.

Toward combating the possibility and the perception of increases and abuses, the EC points to the set of measures implemented by the National Euro Changeover Committee (NECC). These include measures such as the dual display period running from 11 July to 30 June 2008, the FAIR initiative that has roped in over 6,500 businesses representing some 80 per cent of the retailing community and the price stability agreements signed with importers, distributors and manufacturers.

Additionally, the price monitoring currently underway by the Maltese authorities, the EC says, “remains crucial to assess price developments and to inform consumers, and should continue throughout 2008 when the FAIR initiative and the dual display of prices will come to an end”.

Maltese citizens also appear prepared for and informed about the changeover. 74 per cent of Maltese felt they were very or rather well informed about the changeover, and levels have increased significantly over the last year as a result of ongoing national information campaigns. The figure had, in fact, increased by 33 percentage points between September 2006 and April 2007, after which levels have climbed by just three per cent.

Following a short break in August, the NECC began an intensive and comprehensive information strategy focussing on final issues such as when to deposit Maltese lira and how to use the euro converter.

A mass media campaign – running in newspapers, magazines, radio, TV, bus shelters and billboards – is supported by specific actions towards selected target groups.

According to the survey, 99 per cent of Maltese are now aware the euro is to be introduced next year, compared with 92 per cent of Cypriots. Maltese also appear familiar with the new currency, with 74 per cent having seen euro banknotes and 54 per cent saying they have used the new currency.

48 per cent of Maltese felt the introduction of the euro would have a positive effect on the country and 34 per cent felt the effect would be negative. On a personal level, however, 55 per cent thought the changeover would affect them positively, with a contrasting figure of 28 per cent who felt the change in currency would affect them negatively. 39 per cent of Maltese, in fact, said they wanted the euro to be introduced as soon as possible.

Additionally, 70 per cent of Maltese respondents felt the euro introduction would make them feel more European, while 25 per cent disagreed. On a related question, 31 per cent said the currency changeover would diminish Malta’s national identity, while 63 per cent felt otherwise.