Euro: time to get ready

Slovenia, Estonia and Lithuania aim to join the euro on January 1, 2007, Cyprus, Malta and Latvia are aiming for January 1, 2008; Slovakia on January 1, 2009 and Hungary and the Czech Republic on January 1, 2010. Only Poland has not yet set a target date. Setting a date is necessary to plan for the preparations, get the key actors started and guarantee the success of the adoption of the euro.

In a few months, the Council will decide, on the basis of Commission and ECB reports, on the progress made towards respecting the Maastricht Treaty criteria. The Commission will make an objective and meticulous analysis of the situation and will propose to the Council the entry into the euro area of the states which respect the criteria. This is not an easy test. It may require constitutional and legal changes (regarding the right to print a currency, independence of the central bank, etc). Budget deficits must be brought under control, debts reduced when too high and inflation reduced.

Hungary, Cyprus, Malta, the Czech Republic, Slovakia and Poland all have an excessive budget deficit. Other states, such as Latvia and Estonia, have very high inflation. All these criteria will be taken into account when the time comes to assess whether an economy is fit for the euro.

It is possible, and even probable, that certain countries might have to re-examine their targets date, due to high inflation or an excessive deficit.

This would not be a sanction, nor a reverse. The adoption of the single currency is a major and irreversible step. The conditions laid down in the treaty aim to guarantee that this step is positive for the euro area as well as for the country concerned: forcing the normal course of things would be legally impossible but, more especially, economically dangerous.

While the individual changeover dates are subject to change, there is no doubt as to the adoption of the euro itself. Therefore, the same way an athlete does not wait to know the exact date of the Olympic Games in order to get ready (instead, he takes advantage of the years ahead to be in his best condition on D-day), the new member states ought to start preparing without delay to make sure that all the economic actors and citizens are fully ready for the day when the euro becomes reality.

The successful introduction of the euro in 2002 was only possible because it was thoroughly prepared for six years. The experience gained makes it possible today to shorten the preparations, but time is pressing. A report published by the Commission in early November shows that 38 technical measures have to be implemented, which constitute to some extent the base of a successful currency changeover. The most advanced country (Slovakia) has adopted 21 of these measures, while Poland and the Czech Republic have to this day only adopted one! The three countries that aim to join in 2007 still have more than 20 measures to implement, ranging from the initial supply of coins to citizens to the supply of cash distributing machines.

Adopting a new currency is a difficult and even stressful experience for many citizens, who have to get used to new price references and lose a symbol to which they had grown attached. This explains in part why an increasing number of citizens in the new member states (53 per cent against 47 per cent a year ago) are unhappy at the idea that the euro will replace their currency. These fears have to be taken seriously and be given a response by the national authorities, which must explain the benefits of sharing a single European currency, following in this the model of those member states which are already part of the euro area.

Getting used to a new currency is like learning a new language: it takes time. Failing this, citizens will likely have the impression of suddenly awakening in a foreign country. Helping them mastering the changeover is a matter of common interest: that supposes information campaigns mainly by national governments and central banks, but also by commercial banks, chambers of commerce, schools and consumer associations.

The task to be accomplished is immense. A company which launches a new product will regard as an extraordinary success a campaign which reaches 60 per cent of the population. In this case, it involves making 99.9 per cent of the population familiar with the euro, something which for many sections requires a particular effort. The current euro area members had specific campaigns, for example, for the visually impaired, the deaf, the disabled and even for prisoners, the homeless or immigrant populations (in Arabic, Turkish and even Indian dialects).

The euro is not a currency for bankers in Frankfurt or for Brussels "eurocrats": it is our currency, the currency of Europe. Its introduction is the most potent symbol of European integration and identity. Information campaigns must not leave anybody on the side of the road. The Commission is ready to assist technically and financially the new member states in the preparation of information campaigns and has already signed conventions with three of them for this purpose. Others will follow quickly.

"Genius is one per cent inspiration and 99 per cent perspiration," said Edison. Progress towards meeting the convergence criteria, acceleration of the practical preparations and the setting up of detailed euro information campaigns must become the absolute priority for the new member states.

It is time to roll up our sleeves and get down to work.

Mr Almunia is European Commissioner for Economic and Monetary Affairs.