The European Commission Tuesday adopted a Communication on the introduction of the euro in Estonia. It presents the most important aspects of the changeover to the single currency and draws some conclusions for future changeovers in other Member States. All available information confirms that the changeover in Estonia was well prepared and smoothly implemented and perceived as successful by a large majority of citizens. Pricing stability has also been a key element of the changeover with the ‘Fair Pricing Agreement’, whereby subscribers to the Agreement commit not to increase their prices without justification.
“The examination of all available information shows that this was a very well prepared and implemented changeover. I congratulate Estonia on this success and I invite future euro-area Member States to learn from the experience”, said Olli Rehn, European Commissioner for Economic and Monetary Affairs.
Estonia adopted the euro on 1 January 2011, thus becoming the 17th Member State of the euro area and bringing to over 330 million the number of people in the European Union who share the single currency. Like all post-2002 changeovers, Estonia introduced the euro using a so-called big-bang approach, whereby the adoption of the euro and the cash changeover took place at the same time. A two-week dual circulation period, during which both euro and kroon cash had legal tender status, allowed for the gradual phasing out of banknotes and coins in the previous national currency.
The successful changeover again confirmed that a short dual circulation period is sufficient if the changeover is well prepared. According to the recent Commission Flash Eurobarometer survey, a large majority of Estonians (87 %) perceived the changeover as smooth and efficient.
Banks, businesses and citizens in Estonia were well supplied with euro cash in advance of the changeover day. ATMs (cash dispensers) and point of sales-terminals (for card payments) were converted in time and banks and post offices coped well with the extra workload during the dual circulation period (the number of over-the-counter transactions being up to 3-5 times higher than usual). Retailers also managed well with the challenges of the changeover process and the handling of two currencies at the same time.
The Estonian authorities were active in fighting citizens’ fears of price increases during the changeover. The obligatory dual display of prices in Estonian kroons and euro started in July 2010 and will last until 30 June 2011. Almost 9 in 10 Estonians considered the dual price displays to be very or rather useful in order to facilitate price comparisons and to get used to thinking in their new currency. Over 80 % furthermore considered that they were always or mostly implemented correctly, which is in line with the results from the recent changeovers.
Another important initiative in this field was the ‘Fair Pricing Agreement’, whereby subscribers to the Agreement commit not to increase their prices without justification during the changeover to the euro and to respect the changeover rules.
The information campaign for the euro introduction in Estonia furthermore played an important role in informing the population on the practical aspects and in ensuring a smooth changeover. According to the Commission survey carried out in January, the vast majority of Estonians felt well or rather well informed about the euro.