Nicosia.- (CNA) – As Cyprus edges closer to the change of its legal tender – from the pound to the euro – government officials and other independent authorities are stepping up their efforts to ease the change-over for ordinary people as well as the business world.
The Cyprus pound will become obsolete as of January 1st, 2008, as the legal tender of the Republic of Cyprus, making the country the 13th European Union member to join the euro-area. Malta will also adopt the euro at the same time.
Near midnight on December 31st, the Ministry of Finance and the Central Bank are hosting special events to mark the occasion.
Cyprus pounds can be used by the public for payments in cash until the end of January 2008 but all other transactions will be in euro. Cheques in pounds can be cashed, in euro, until the end of June next year, the Central Bank has announced.
President Tassos Papadopoulos has welcomed the introduction of the euro, saying it will have a positive fallout on efforts to reunite the country, divided since the 1974 Turkish invasion.
“We are optimistic that the adoption of the euro will create more favorable conditions leading to a solution that will actually reunite Cyprus, its economy, territory, institutions and society at large. Any solution cannot but provide for a unified economy,” he said.
He did acknowledge however that there will be problems during a transitional period from the pound to the euro but pointed out that progress comes with reform.
On Friday, Cypriots scrambled to obtain euro from commercial banks, with long queues of people wanting to secure coins and banknotes before they start using them.
Shops, businesses and banks have been displaying their prices in pounds and euro for the past three months to help consumers get used to the new scale of values while the Ministries of Finance and Commerce are monitoring price developments.
The Central Bank has said that after January 1st, businesses must give change exclusively in euro. Banks have supplied Cypriots with 40,000 pre-packed euro coin starter-kits for business, worth 172 euro each, and 250,000 mini-kits for the general public worth 17.09 euro each.
The exchange rate of the Cyprus pound to the euro has been set at 0.585274. One Cyprus pounds corresponds to 1.71 euro.
Cyprus, which joined the EU in May 2004, is one of the smallest economies in the euro-area, contributing 0.17% to the areaʼs Gross Domestic Product and 0.24% to its population.
In 2006, Cyprusʼ GDP per capita was 92% of the EU average.
The number of euro-area members on January 1st 2008 will be 15, with an estimated population of 318 million people. Denmark and the UK have opted to stay out of the euro-area for the time being.
Each member state wishing to join the euro-area must achieve a high degree of price stability, sustain public finances, observe the normal exchange rate fluctuation margins provided for by the ERM for at least two years and ensure durability of the convergence achieved by the state and of its participation in the ERM, as reflected in long-term interest rate levels.
The common side of the eight euro coins, in circulation at present, depicts maps of Europe, symbolising European unity.
In Cyprus there will be three national sides on the euro coins minted by the Republic – one for the small denominations (1, 2 and 5 cent), one for the medium denominations (10, 20 and 50 cent) and one for the high denominations (?1 and ?2). The themes for the three sides are drawn from nature, history and civilisation.
On the 1, 2 and 5 cent coins, the national side will depict the moufflon, as the most characteristic species of Cyprusʼ wild life.
On the 10, 20 and 50 cent coins, the national side will depict the ancient ship of Kyrenia, representing the islandʼs relationship with trade, shipping and the sea, throughout Cyprus history.
On the ?1 and ?2 coins, the national side will depict the idol from Pomos, a cross-shaped idol from the chalcolithic period (3000 B.C.) which is a characteristic example of Cypriot prehistoric art and represents the heritage and civilisation of a country endowed with a history of over 10.000 years.