Potential risk of an exchange rate crisis eliminated

Banners were yesterday unfurled showing the euro notes and coins Malta will be using from January 1 as the European anthem, Ode to Joy, was played, near the Central Bank in Castille Place, Valletta.

The banners are displayed on the sides of the bank's main door and the façade.

The ceremony was presided over by the president of the European Central Bank, Jean-Claude Trichet, and by the governor of the Central Bank of Malta, Michael Bonello.

Malta's adoption of the euro, Mr Bonello said, was important from the institutional point of view and from historic and cultural standpoints.

"From an institution charged with the preservation of price stability in Malta and with safeguarding the integrity of the national currency, the Central Bank of Malta will assume shared responsibility with the other members of the euro system for shaping monetary policy for the euro area in the best interest of 320 million people in 15 countries.

"We are facing this challenge with confidence and enthusiasm, Mr Bonello said.

The introduction of the euro will be a momentous event in the history of the Central Bank set up 39 years ago.

"Beyond the proven economic benefits of the single currency, there is another important benefit.

"In a world characterised by the free movement of capital, the adoption of the euro signifies the virtual elimination of the potential risk of an exchange rate crisis to which the currencies of small, open economies are exposed to on a daily basis.

"We are about to trade in this vulnerability for the greater security and credibility afforded by a major international currency," he said. The euro gave importance to price stability and supported economic growth and job creation. The Maltese looked forward to joining 14 other countries in using the euro for a reason that was deeply rooted in our history and culture, Mr Bonello said.

"For us, the single currency is also a symbol of a common European identity and of shared values and, therefore, a potential instrument for bringing peoples closer together".

Mr Trichet said he was immensely pleased to be in a place of such magical beauty at such a moving moment.

He said public preparedness for euro adoption in Malta was very advanced and the campaign of the National Euro Change Over Committee was outstanding.

Mr Trichet presented Mr Bonello the 14th Euro Star, a glass star holding euro notes.

Present for yesterday's ceremony were the governors of the central banks of Belgium, Cyprus and Slovakia, and the deputy governors of Bulgaria, Denmark, Holland, Lithuania, Luxembourg, Romania and Slovenia.

There were also central bank board members from Greece, Portugal and Latvia.

A conference will be held today with the theme EMU Governance And Euro Changeover - Malta. The speakers will include the Prime Minister; Parliamentary Secretary Tonio Fenech; Mr Trichet; the European Commissioner for Economic and Monetary Affairs Joaquín Almunia and Mr Bonello.