A comparative analysis of the Euro changeover process in the new member states : best practices in implementing a smooth Euro changeover process

Abstract

On 1 January 2002, the biggest cash changeover in history - the euro changeover - took place and was completed within two months. The euro changeover is not just a single day on which the euro banknotes and coins become legal tender and replace the national currency (€-day) but a whole process which requires proper prior planning and preparations, if a country is to ensure that it has a smooth and successful changeover. The New Member States (NMSs) joined the EU with the adoption of the euro forming part of the requirements of their Accession Treaty. The euro changeover in the NMSs is different in some aspects when compared with the introduction of the euro in the first-wave countries. Some positive aspects, including that the euro is already in circulation, possibly help to smooth the changeover process. On the other hand, since the transition periods for the NMSs will be much shorter than for the original changeover, it is even more essential that the NMSs prepare comprehensively for the changeover. Although, the Commission analyses the state of practical preparations in the countries not forming part of the euro zone, it does not directly compare the preparations between one country and another. The purpose of this study is to compare the preparations for euro changeover in the NMSs with a view to identifying the critical success factors and best practices of implementing a smooth euro changeover process in a NMS. Malta, Cyprus and Slovenia are used as case studies for the comparative analysis which is mainly based on a document review. The comparative analysis is complemented by a number of interviews ,and questionnaires focusing, on the personal experience of Maltese, Cypriot and Slovenian persons involved in the actual euro changeover process. The experience of Malta, Cyprus and Slovenia shows that early preparations pay as all the three NMSs experienced a smooth euro changeover. A number of critical success factors and best practices, which can be explored and adapted by NMSs, resulting from this success, are presented.