AS THE year draws to a close, so does Cyprus’ history with the pound. From January 1, 2008, the Cyprus pound will be replaced by the euro as the legal tender of the Republic of Cyprus.
Malta will join Cyprus in adopting the euro, taking the number of member states in the euro-area to 15 out of 27, accounting for 318 million people out of a total 493 million. From the remaining 12 member states, only the UK and Denmark have a permanent opt-out of the single currency.
The euro was established in 1999 when 11 member states locked their bilateral exchange rates to the euro. On January 1, 2002, 12 member states adopted euro bank notes and coins as their legal tender.
On the first day of 2007, Slovenia became the first new member state from the 2004 ‘big bang’ enlargement to join the euro. The two smallest economies in the euro-area, Cyprus and Malta, will be the next in line, contributing 0.17 per cent and 0.06 per cent respectively to the area’s GDP and 0.24 per cent and 0.13 per cent to the European Monetary Union’s population.
Cyprus pounds can be used by the public for payments in cash until the end of January 2008 but all other transactions will be in euro. Cheques in pounds can be cashed, in euros, until the end of June next year.
President Tassos Papadopoulos welcomed euro adoption, saying it would have a positive outcome on efforts to reunite the country.
“We are optimistic that the adoption of the euro will create more favourable conditions leading to a solution that will actually reunite Cyprus, its economy, territory, institutions and society at large. Any solution cannot but provide for a unified economy,” he said.
Finance Minister Michalis Sarris said yesterday he was satisfied with preparations for euro adoption. He said the country was entering the euro-area with very good omens, noting Cyprus would be moving from a good currency, the Cyprus pound, to an even better one, the euro.
Sarris said the hard work in preparing the public and private sectors paid off as most businesses are ready for the euro. And even if they weren’t, payments could still be made using Cyprus pound until the end of January.
Presidential candidate Ioannis Kasoulides said January 1 would be a historic moment for the country, noting that by then, Cyprus would have one of the two strongest currencies in the world. He warned that euro adoption had to be met with prudence and realism, adding there was no place for triumphalism.
Meanwhile, last Friday, Cypriots scrambled to obtain euro notes and coins from commercial banks, with long queues of people creating long waiting times.
Shops, businesses and banks have been displaying their prices in pounds and euro for the past three months to help consumers get used to the new scale of values while the Ministries of Finance and Commerce are monitoring price developments.
The Central Bank has said that after January 1, businesses must give change exclusively in euro. Banks have supplied Cypriots with 40,000 pre-packed euro coin starter-kits for business, worth €172 each, and 250,000 mini-kits for the general public worth €17.09 each.
The exchange rate of the Cyprus pound to the euro is set at 0.585274. One Cyprus pound corresponds to €1.71. In 2006, Cyprus’ GDP per capita was 92 per cent of the EU average.
The common side of the eight euro coins, in circulation at present, depicts maps of Europe, symbolising European unity.
In Cyprus there will be three national sides on the euro coins minted for the Republic – one for the small denominations (1, 2 and 5 cent), one for the medium denominations (10, 20 and 50 cent) and one for the high denominations (€1 and €2). The themes for the three sides are drawn from nature, history and civilisation.
On the 1, 2 and 5 cent coins, the national side will depict the moufflon, as the most characteristic species of Cyprus’ wild life. On the 10, 20 and 50 cent coins, the national side will depict the ancient ship of Kyrenia, representing the island’s relationship with trade, shipping and the sea, throughout Cyprus history.
On the €1 and €2 coins, the national side will depict the idol from Pomos, a cross-shaped idol from the chalcolithic period (3,000BC) which is a characteristic example of Cypriot prehistoric art and represents the heritage and civilisation of a country endowed with a history of over 10,000 years.
There are seven euro bank notes ranging from five to 500 euro. The notes are exactly the same for all the countries of the euro-area.
The Central Bank released a statement warning consumers and businesses not to mistake Turkish coins of 50 kurus and one lira, as they have the same colours and size as the one and two euro coins.
The Turkish coins can be distinguished from euro coins as they have the crescent and star symbol on one side and the face of Kemal Ataturk on the other.
Meanwhile, the Co-operative Bank released a statement yesterday informing that all central offices in the four main districts of Nicosia, Limassol, Larnaca and Paphos will be open on New Year’s Day. According to the statement, the central offices will be open on Tuesday from 11am to 2pm to serve customers who wish to change their Cyprus pounds to euros.
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