The euro cash changeover in Cyprus and Malta

On 1 January 2008 the euro was successfully introduced in Cyprus and Malta. Six years after the introduction of the euro banknotes and coins in the 12 “first-wave” countries and one year after the adoption of the euro by Slovenia, this is the third successful euro cash changeover.

After the first working day of 2008, 2 January, the share of euro banknotes in total banknotes in circulation was already more than 50% in both Cyprus and Malta. The cash changeover is progressing smoothly and according to plan, thanks to the timely and comprehensive preparations and cooperation among all stakeholders, coordinated in the respective countries by the Central Bank of Cyprus and the Central Bank of Malta and by the Cypriot and Maltese Governments, and thanks to the extensive information campaigns implemented in both countries. To make the citizens of Cyprus and Malta acquainted with the visual appearance of the euro banknotes and coins, the European Central Bank (ECB) and the Central Banks of Cyprus and Malta used an optimal communication mix, including advertising, direct information to households and public relations activities, to ensure that the population was informed correctly and in good time. Activities addressing vulnerable population groups were also included.

In both countries the euro has been introduced under a “big bang” scenario, with a dual circulation period of one month. The euro will thus become the sole legal tender as of 1 February 2008. Both central banks will redeem legacy banknotes for ten years and coins for two years.

To cover the launch requirements, the Eurosystem has provided the Central Bank of Cyprus with a total of 79.1 million euro banknotes with a face value of €1,730.0 million from its stocks, while the Central Bank of Malta has received a total of 72.0 million banknotes with a face value of €1,566.0 million. As regards euro coins with national sides, the competent authorities in both countries opted for a public tender procedure to procure the required quantities. In the case of Cyprus, 395.0 million euro coins with a face value of €100.3 million were produced by Mint of Finland. For Malta, Monnaie de Paris minted 200.0 million euro coins with a face value of €56.1 million.

The Central Bank of Cyprus initiated frontloading of euro coins to commercial banks and cooperative credit institutions on 22 October 2007; the frontloading of euro banknotes began on 19 November. Sub-frontloading to professional parties (e.g. retailers and the cash-operated machine industry) started at the same time as the frontloading operation. A widespread distribution of euro coins ahead of the changeover was ensured by making some 40,000 pre-packed coin starter kits, worth €172.00 (CYP 100.67) each, available to businesses and retailers as from 3 December. The general public was given the opportunity to buy 250,000 mini-kits, worth €17.09 (CYP 10.00) each, from the same date.

In Malta, frontloading of euro coins began in late September 2007, and frontloading of euro banknotes began in late October. The sub-frontloading operation, including the distribution of coin starter kits worth €131.00 (MTL 56.24) each to businesses and retailers, started on 1 December. The general public was given the opportunity to buy 330,000 mini-kits, worth €11.65 (MTL 5.00) each, from 10 December.

The frontloading and sub-frontloading operations, which helped to ensure a widespread distribution of euro cash before the launch, were completed in both countries as scheduled and are considered to have been key for the smooth overall process.

Another success factor was the quick conversion of automated teller machines, which had either been prepared before “€-Day” or took place on 1 January 2008. Moreover, in Cyprus a number of branches of all commercial banks and cooperative credit institutions were open on 1 January for the sole purpose of exchanging Cyprus pounds for euro banknotes and coins. In both countries retailers have given change in euro only from the first day.

In connection with the introduction of the euro in Cyprus and Malta, all national central banks of the euro area will exchange Cyprus pound and Maltese lira banknotes against euro at par value until 29 February 2008 free of charge. The amount that may be exchanged is limited to €1,000 for any given party/transaction on any one day.