The euro and you

If all goes to plan, this time next year we will have euros in our pockets.

Contrary to what many may think, changing currency is much more than a technical procedure of a purely financial nature. It also has significant economic, political and social repercussions. Here are some of them.

First of all, we are not there yet, even if the outlook looks increasingly positive. The most likely timing for assessing our euro credentials will be spring this year, possibly May. We must therefore concentrate and redouble our efforts to get there in good shape. There is no reason why we should not make it.

The year 2006 ended on a positive note with the rate of inflation sliding below the required threshold for the first time in many months. It is now crucial that, until our euro assessment is made, we keep it that way.

But inflation was not the most difficult obstacle we had to overcome. Reducing our budget deficit to acceptable limits was an even more difficult test in our euro entry exam. That we managed to do so also last year was a major accomplishment by the present administration. But it was also a rightful reward for the financial sacrifice that taxpayers have endured over the past years in order to help plug the hole in the public purse.

As a nation, we should therefore be proud of our hard-earned accomplishments. Only the fittest can join the euro. And we should be among them. Up there in the first division.

The second ramification is political. Joining the euro means changing our lira for a currency we will share with many other European countries. Losing the lira will be like losing part of our history. But it also means entrenching ourselves more deeply into the European family of nations of which we are now part. So it will also be a new chapter in our political history.

At least, it will not be one that divides us. Barely a few months ago we were told that it was "obviously not possible" to have a consensus on adopting the euro in 2008. We were also regaled with a good dose of scaremongering - the Central Bank having to pay a Lm10 million fine - reminiscent of the divisive pre-referendum days.

Thankfully, this is all behind us and next year we should switch to the euro as one family. I always thought that EU membership would bring with it a paradigm shift in the way we do politics and the way we deal with major national policy issues. We have finally started to move in that direction.

Thirdly, the changeover to the euro will have huge social consequences. Let there be no mistake, "thinking" in a new currency will not be easy and it will take time for all of us to adapt. Vulnerable categories, such as the elderly, the illiterate and persons with a disability, will find it even harder.

There is still a lot of fear and resistance to the euro out there. And we must take it very seriously. Fear also extends to the value of one's currency and the cost of living. In other words, people ask whether prices will go up and whether the value of their monetary assets will shrink. These fears are natural in a currency change. And they deserve an adequate answer. Yet, if things are done well, fears can be overcome. And there is no reason to believe otherwise.

The national committee responsible for the changeover, NECC, is doing an excellent job at helping the country at large integrate into the eurozone in a seamless manner. Its biggest challenge will be to help people understand the euro and overcome fear.

On this score, NECC's information campaign is starting to be felt. Now it needs to be stepped up and go beyond generic information. It must educate, thereby obviating fear and getting people to accept the new currency as their own. Indeed, this year, the euro educational campaign should become a major national effort that should engage us all.

NECC's initiative to launch FAIR, a cooperation scheme with businesses, will certainly help. And bringing the Chamber of Small and Medium Enterprises - GRTU and other major organisations on board was laudable. Portraying businesses as muggers ready to exploit the uncertainties of the changeover was never the right way forward. Businesses have a direct interest in cooperating because they stand to gain from a smooth changeover that will galvanise consumer confidence.

So for NECC, this will be a decisive year, where it must multiply its efforts and take nothing for granted. It cannot afford to get it wrong. But, then, I am sure it will rise to the occasion. It cannot be otherwise as the euro will touch us all in our daily lives, regardless of whether we are technical gurus or disinterested bystanders. Regardless of whether we are for or against. Regardless of age, ability and educational standing.

So here's one more resolution to add to the new year. Let each and every one of us make an extra effort to get to grips with the euro. And let us also help others to do so.

Happy New Year to all!

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