Monday, January 28, 2008

EU: Malta adapts to euro

European Parliament news talks to Joseph Muscat, Maltese Vice-Chair of Parliament's Economic and Monetary Affairs Committee

The New Year brought a new currency for the people of Cyprus and Malta when both island nations adopted euro notes and coins. Fireworks and official events marked the changeover with the authorities in Malta setting up 59 telephone hotlines to help people adapt to the new currency. As people get used to new coins and notes, Joseph Muscat, Maltese Vice-Chair of Parliament's Economic and Monetary Affairs Committee, talks about the changeover and how people are reacting.

Was it hard for Malta to fulfil the criteria to enter the Euro-zone?

I think fulfilling the Maastricht criteria was to the credit of our country but really the acid test will be in 12 months when we can analyse the effect on inflation. By then we should also be able to tell what the woman and man on the street feel has been the effect of the euro.

Changes had to be made. There were voices of concern from various points of the political spectrum, but I think that is water under the bridge. We must now focus on trying to make this a success.

How did people react to the change of currency?

There was a widespread welcome of the new currency. The first few days showed that people were quite eager for the changeover. One survey said that Malta is behind only the Netherlands in the speed of the changeover.

People think we have the nicest euro coins. They were chosen by the public and are a very sensible choice - the Maltese cross, the temples and our emblem.

In the light of Malta's experience, what would you say to people from the EU countries which do not have the euro yet, but are preparing for entry?

The key is the consumer, not the technical changeover. I think Malta's National Euro Changeover Committee did a very good job. However, I was disappointed that there was not enough involvement by consumer organisations. This is where more work is needed in other countries.

There are often concerns about price rises when countries adopt the euro. What has happened in Malta? How was the run-up handled by the authorities?

There was a good campaign regarding awareness and technically the changeover went exceptionally well. However I think that the changeover has not ruled out the issue of the rounding up of prices. There is a perception that the euro changeover has brought increased prices. We still have to analyse whether this is due to changeover or whether people took the opportunity of a change in currency to raise prices.

Source: European Parliament