THE GENERAL state of the economy, as well as its harmonisation with the aquis communautaire, are such as to indicate that all criteria for Cyprus’ accession to the Eurozone on January 1, 2008 are fulfilled, Central Bank of Cyprus Chairman Christodoulos Christodoulou said yesterday.
“In 14 months, we have to join the Eurozone and this is within our potential.”
He also stated that interest rates in Cyprus were converging with those of the European Central Bank.
Christodoulou said he considered the data concerning inflation, unemployment, public deficit and public debt and foreign exchange inflow as satisfactory.
As regards the Gross Domestic Product development rate, he noted that it is expected to reach 3.8-3.9 per cent in 2007.
Yesterday, the bi-annual National Advisory Committee on the adoption of the Euro met at the Finance Ministry to discuss progress.
The Governor, along with the Finance and Commerce Ministers, discussed various issues such as the information campaign for people and businesses, distribution practicalities and dual pricing.
The main issue is to ensure a smooth transition from the pound to the euro, while it was also stated that the public and business are not adequately informed, with Finance Minister Michalis Sarris saying that a detailed awareness programme will be set up.
Ways of avoiding profiteering, as seen in other countries when the currency was introduced, were also discussed.
In its fourth report on preparations for the eurozone among the ten new member states, the European Commission recently said that Cyprus was ill-prepared for the introduction of the euro, despite 60 per cent of the population crying out for more information.
The Commission said the situation in Cyprus was a cause of “some concern” since preparations were still in a preliminary stage and needed to be stepped up.
“Cyprus’ national changeover plan addresses all the different practical issues, but is thin on detail, for example on the frontloading operation, the return of national cash to the Central Bank and the period of dual price display. And further measures are necessary to boost consumer confidence that the changeover will not push prices up.”
A recent Eurobarometer survey said only 29 per cent of Cypriots believe the euro will bring a positive outcome.
“In Cyprus, the data shows a significant decrease in the ratio of citizens expecting positive consequences of the introduction of the euro,” the report said.
“The state of public opinion vis-?-vis the euro in the recently acceded Member States remains unsatisfactory,” the Commission said. “This constitutes an additional reason for implementing comprehensive communication programmes.”
The Central Bank has invited tenders for the minting of the Cypriot coins for the new currency, with plans in place to mint 545 million coins. Banknotes are identical across the eurozone, while coins are issued by each country but can be used anywhere in the zone.
