Paphos People

Welcome to the euro
By Stefanos Evripidou

THE EURO has landed. As of midnight last night, the Cyprus pound went the way of the deutschmark and franc, being officially replaced by the euro as legal tender of the country.

Despite euro adoption, the pound may be used to make payments in cash until the end of the month, after which citizens will never be able to spend in Cyprus pounds again. Cheques in pounds can be cashed in euro until the end of June this year.

Central Bank Governor Athanasios Orphanides described euro adoption as “undoubtedly one of the most important and positive challenges the Cyprus economy and the state in general has ever had to face”.

“Cyprus is now part of an select group of states with a powerful common currency. From this point on, our country has a greater role to play but also more obligations within the EU than in the past,” he said.

The Governor highlighted the Central Bank’s role in achieving the right conditions for adopting the EU’s single currency: satisfactory growth, low unemployment, and in general, conditions for macroeconomic stability.

Orphanides noted that the future success of the economy depends on whether the opportunities the single currency offers are taken.

“We achieved a lot till today. It is in our hands to achieve even more.”

President Tassos Papadopoulos said entry to the eurozone was a big strategic objective. Apart from economic benefits, the President noted there were political benefits too.

“By cementing the principle of a unified economy and common currency, little Cyprus enters the ‘heart’ of Europe with an increased role and greater say.”

Finance Minister Michalis Sarris said everyone had a right to stand tall. “We all have a right to feel proud and all will participate in this new era with success,” he noted.

The minister stressed that the euro would bring important benefits to households, consumers and enterprises since the eurozone was an area of low inflation, low interest rates and a vast market where transparency prevailed over prices of goods.

He reminded the public that people could still spend in Cyprus pound until the end of the month, though all change and other transactions would be in euro.

“There is no need for panic at 3am,” he said.

Sarris noted that during that month it was not illegal for businesses to give change in Cyprus pound if they had to. He called on consumers to use their feet to keep profiteers in check. “If you find something more expensive after the currency changeover, go to the next shop and the next to see who’s kept his prices the same.”

The President joined Sarris last night at the Finance Ministry to celebrate the New Year and welcome the euro. Papadopoulos was due to the make the first euro cash withdrawal from an ATM at the Ministry after midnight.

Central Bank director George Syrichas said yesterday that all the commercial banks and Cooperative Central Bank had been supplied with euro banknotes and coins and that most businesses had taken enough supplies of the new currency.

The Central Bank estimates that the banking sector was supplied with approximately 80 per cent in value rather than volume of all euro banknotes needed for the national economy before January 1st and 64 per cent of the necessary coins.

There is approximately £600 million in notes and coins currently in circulation.

Around 15 per cent of this has already been returned to the Central Bank.

The returned coins will be used as scrap metal while Cyprus pound bank notes will be destroyed.

“I can assure you the whole procedure of destroying bank notes is too strict and bureaucratic for anyone to be able to profit from,” assured Syrichas.
All the banks and Co-ops will have at least one retail branch open in each major town today from 11am to 2pm, offering currency exchange services to the public and business sector. ATMs were giving out euro notes from 4pm yesterday.

Recent surveys results indicate that the Cypriot enterprises are well prepared for the change over and have not experienced any significant problems.

According to Cyprus New Agency, about 7,130 businesses, including larger retailers and banks, are participating in a fair pricing code, launched by the government in July 2007.

Meanwhile, Director of the Competition and Consumer Protection Service Christos Malikides said the Commerce Ministry was keeping a close check on price changes. He said the service was publishing a new list of changes in price of basic consumer goods. Malikides noted that stiff competition ensured many had rounded down prices in the conversion.

“We feel the situation is under control. There is good cooperation with other consumer associations. We will continue our research more intensely in the new year,” he said.
Taxi drivers have been given an extra month before having to convert their meters to the euro currency, while petrol stations will take another 10-15 days before modifying their machines to accept euro notes. In the meantime, staff will be on hand to help those wanting to buy fuel using the euro.

Good news for the capital’s motorists. All parking meters in Nicosia have been covered up, providing free parking until the changeover is made in the next 10 days.