The single European currency is set to become legal tender in Malta in less than two days time, but 290 million Maltese lira banknotes are still in circulation and 55 million of them are in Lm20 notes, according to the Governor of the Central Bank of Malta Michael C. Bonello.

The largest number of lira notes ever to be in circulation was 500 million, in mid-2006.

It is no wonder, then, that the Central Bank of Malta has decided on a 10-year period for people to change any lira banknotes they might still have hidden taht il-maduma (under floor tiles), stuffed into mattresses and in every other imaginable place possible.

Speaking at a media conference on the euro changeover process, Mr Bonello said many Maltese lira banknotes could well be lost forever – notes that tourists may have taken back home and others that might have been destroyed.

The Lm20 notes, said Mr Bonello, are naturally the favourites for hoarding, 55 million of them. That amounts to Lm1.1 billion or e2.56 billion. Mind-boggling, to say the least.

Other figures are nevertheless astonishing; like the number of euro starter kits that are being sold to retailers and consumers.

Ever since euro starter kits were first made available – on 1 December for retailers and on 10 December for the general public – people have been rushing to banks to obtain their first Maltese euro coins. e5 notes were also available for retailers upon request.

About 28,200 retailer starter kits (worth e131 / Lm56.24 each) of the 33,000 available have already been sold, while 136,000 mini-starter kits (worth e11.65 / Lm5) of the 330,000 available, have been sold to the general public.

This means that at least e5.28 million (Lm2.27 million) worth of euro coins are already in circulation, not to mention euro coins and notes that people have kept after a trip to one of the 13 eurozone countries.

During yesterday’s media conference, Joseph F.X. Zahra, NECC chairman, Alan Camilleri, NECC executive director and Tonio Fenech, parliamentary secretary in the Finance Ministry, outlined all the measures taken to ensure a smooth changeover.

They expressed their confidence that according to current indications, prices will not increase just because the country will be adopting the euro.

Mr Fenech said euro adoption means that Malta is sending an extremely important message worldwide – that it has made a big leap forward economically in a short period of time, so much so that it has been accepted to join the eurozone.

He said the general public’s optimism index regarding the euro has increased tremendously since May 2005, when the Maltese lira joined the Exchange Rate Mechanism (ERM II).

He said that six months later, oil prices started to increase and now food prices are also on the increase globally.

“Even though both oil and food prices have affected us, we are one of the countries with the lowest rate of price increases and the cost of living has remained more or less stable in other sectors,” said Mr Fenech.

Naturally, price increases are the general public’s primary concern, but all the NECC’s efforts seem to be having the desired effect and its changeover-facilitation tools have been recognised as best practices, he said, expressing confidence that prices will not increase simply because the country is changing currency.

“A number of studies show that the euro brought more stability and controlled cost of living increases in other countries,” Mr Fenech said t.

He appealed to the general public to try and forget the Maltese lira as soon as possible and start thinking in euro.

Meanwhile, NECC officers will continue monitoring prices, analysing all price movements and investigating complaints, while making sure that retailers continue displaying prices in both currencies until June.

The preparations all seem to be in place, people seem to have gracefully accepted the euro, hoping that prices will not rise. What is yet to be seen however is how many of those 290 million Maltese lira banknotes will actually be changed into euro over the next 10 years.