Cases of pricing abuse related to the euro changeover have been minimal three days into Malta’s changeover to the new currency, the National Euro Changeover Committee (NECC) said yesterday.
The NECC is, in fact, only taking action on two instances of abuse in which consumer prices have been rounded up in favour of the retailer, NECC executive director Alan Camilleri informed a media briefing yesterday afternoon. One violation was registered at a car park and another involved waiting room charges at a doctor’s office.
The legal process has been initiated in both instances and the structure of punitive fines will be kicking into action if the violating businesses fail to properly conform to the regulations.
“We are adamant on these issues,” Mr Camilleri commented yesterday. “The euro should not be used as a reason to raise prices when there are no valid economic reasons to do so.”
But shortly after the media briefing, the Public Transport Association announced that as from this morning bus drivers would no longer accept Maltese coinage, and would begin accepting only euros.
The unilateral action being taken by the PTA constitutes a clear violation of dual circulation rules and, according to Mr Camilleri, is completely illegal. As such, the necessary legal process warranted in such cases was initiated immediately while political discussions aimed at resolving the impasse were also underway yesterday evening.
Over recent days it has been evident that not all bus drivers were prepared for the changeover, despite the NECC and the Malta Transport Authority having organised no less than seven different courses to train bus drivers for what had been foreseen as a particularly exacting element of the changeover process.
Banks have been doing a bristling business since the changeover, with Maltese apparently eager to dispense with Malta’s legacy currency and to line their pockets with euros.
With all Malta’s ATMs online yesterday after a power failure hit two units, between 1 and 2 January a total of 64,823 withdrawals were made, worth a total of EUR7.79 million (Lm3.34 million). On 2 January, the first day banks opened after the changeover, 37,663 lira to euro transactions worth EUR20.7 million (Lm8.89 million) were made. The figures were twice as high as those in Cyprus, despite the fact that the Cypriot population is practically double that of Malta.
Reports yesterday afternoon indicated banks were slightly busier yesterday than on 2 January – a good indication Maltese liri in circulation were quickly finding their way back to the central bank. As of 2pm yesterday, Bank of Valletta reports its braches alone had handled close to 40,000 euro transactions, close to double those handled on the previous day of business.
One sore point at banks was that branches were not exchanging amounts of over EUR250 (Lm107.33). Senior citizens cashing in their pension cheques were only given EUR250 in cash while the remainder, much to their annoyance, was deposited into their accounts.
The practice, however, had been provisioned in the euro changeover master plan and was meant to mitigate against the practice of people walking into banks with bags of Lm10,000 for exchange during the demanding infancy of the euro in Malta.
The NECC’s 154 linja euro help line received 702 calls on 2 January alone, compared with the pre-changeover monthly average of 1,400 calls.
Queries ranged from the absurd, such as people questioning the authenticity of euro notes since they did not bear the signature of the Central Bank of Malta governor, to the practical, such as complaints against certain retailers not giving change in euros.
Most such cases, it turns out after investigations by the NECC, were justified in that retailers are allowed to resort to giving change in Maltese liri if, and only if, their euro floats are exhausted.
Such complaints, Mr Camilleri noted, were “a good sign in that consumers are feeling empowered” during the changeover process. Most calls to the help line, he added, were from people simply looking for reassurance they were doing things properly, rather than lodging complaints.
The NECC yesterday once again called on consumers not to use shops as exchange bureaux by paying for inexpensive items with large denomination bank notes - a practice that has been aggravating the changeover, and retailers, to a certain extent.
The NECC strongly recommended people give as exact a payment as possible at shops, and to exchange larger amounts of liri at the banks. Nor was there a rush to exchange any hoarded cash one might have stashed away, with commercial banks changing Maltese liri for three months and the central bank changing notes for ten years and coins for two.
Retailers, meanwhile, were urged to go to the banks at the end of working days, or as soon as possible afterward, to exchange their liri.
There were three instances in which change was not being given in euros. The first was when euro floats ran out, in which case retailers are within the law to give change in Maltese liri. Certain vending machines, meanwhile, are still giving change in Maltese liri – a problem that was foreseen and which is being tackled quickly. With only a handful of operators owning thousands of vending machines, and with dual circulation physically impossible inside the units, the switch could not have been made overnight.
The third instance, meanwhile, involves retailers that, for one reason or another, are refusing euros or are refusing to give change in euros without any justification. The NECC, Mr Camilleri said, “is coming down like a tonne of bricks” on such infringing retailers.
Bank branches have set up fast track queues for retailers, but queues are remaining long partly because retailers have been seen entering with large bags of unsorted coins and with the unknown amounts– complicating matters for bank tellers and lengthening queues.
Overall, feedback on the process from the consumer, retail and banking perspectives has been positive, Mr Camilleri cited, adding that with such a large scale operation, made more daunting considering the large amounts of legacy currency in circulation, teething problems could have been expected but few have erupted.
Malta, in fact, is faring far better than Cyprus, which also adopted the euro on 1 January, and Slovenia, which adopted the currency at the inception of 2007.
According to a flash survey carried out for the European Commission on Wednesday, 21 per cent of Maltese had only euro banknotes in their wallets, compared with 12 per cent of Cypriots, while Maltese with mostly euros in their wallets were 21 per cent compared with 31 per cent of Cypriots – reflecting Malta’s more favourable changeover status. In terms of coins, 29 per cent of Maltese only had euro coins in their pockets compared with 20 per cent of Cypriots.
91 per cent of Maltese retailers were giving change exclusively in euros, compared with 92 per cent in Cyprus.
36 per cent of payments at shops in Malta were being carried out exclusively in euros, as against 28 per cent in Cyprus, while 58 per cent of payments were still being made in the legacy currency in Malta, compared with 68 per cent in Cyprus.
In terms of change given at shops, Cyprus fared better with 87 per cent of transactions being conducted in euros, compared with Malta’s 75 per cent. Both countries, meanwhile, saw five per cent of transactions seeing change being given in their respective legacy currencies.
According to a separate retailer survey carried out by the NECC, only seven per cent of retailers reported consumers paying ‘almost always’ in euros, 21 per cent said they ‘often’ received payments in euros, 36 per cent replied not very often and 35 per cent said they had had very few exclusive euro payments.
16 per cent, meanwhile, felt it has been ‘very easy’ exchanging Maltese liri at banks, 42 per cent said it has have found it ‘quite easy’, 23 per cent said the practice was ‘not so easy’ and 17 per cent have found the process difficult.
23 per cent have found getting their hands on the amount of euro cash required has been ‘difficult’, 35 per cent ‘not so easy’, 27 percent quite easy and 15 percent very easy.
Euro centres scattered across the islands have also been busy, mainly with people asking for converters, conversion charts and retailers who left it somewhat to late to get acquainted with the changeover coming in for training.