NEWS

Cyprus aims to win over skeptical public on euro

NICOSIA (Reuters) – Eurozone hopeful Cyprus opened an EU-wide tender yesterday for media planners to coax a deeply suspicious public into ditching their pound and accepting the European currency in 2008. The one-million-Cyprus-pound ($2.27 million) campaign, running for two years, is designed to convince Cypriots – among the biggest worriers at euro price hikes according to one EU survey – that their concerns are misplaced. «Surveys have suggested one of the key concerns is that of the impact on prices. While this may not be justified, we have to address this issue with convincing arguments,» said Michalis Sarris, the island’s finance minister. Cyprus hopes to adopt the euro in January 2008. Authorities say they are committed to that target in spite of a call from the senior partner in the center-left governing coalition to delay the target until 2009. Communist AKEL says the delay would allow Cypriots to better digest the switchover and allow authorities to cushion vulnerable groups from the change. Tender documents published on the website of the Ministry of Finance (www.mof.gov.cy) draw potential bidders’ attention to a Eurobarometer survey of September 2005. That report said 78 percent of Cypriots were concerned at price cheats, and 69 percent – the second highest among the 10 states which joined the EU in 2004 – that it would cause a spike in prices. Authorities want campaign managers to oversee a media blitz, a consumer hotline, conversion calculators to 250,000 households and a «euro bus» to spread the word. The deadline for submission of tenders is July 17. «We think that with the right communication policy we will be able to highlight the benefits and ward off concerns,» said Sarris at a news conference yesterday opening a euro center at an annual trade fair in the capital Nicosia. Cyprus has been working closely with Ireland and with Greece to borrow from their experience of euro adoption. It has already encouraged retailers to adopt dual invoicing, a requirement which will become compulsory four to six months before the island joins the eurozone. That timing will be influenced in part by when the Cyprus pound will irreversibly lock against the euro for exchange purposes. The pound now fluctuates against the euro in ERM 2, a currency stabilization mechanism, in a 2.25 percent band around a central rate of 1 euro equal to 0.585274 Cyprus pounds. The locking in is expected between May and July 2007.