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Euro in Cyprus?

Benefits and problems from the EU membership.

Do you want the adoption of Euro in Cyprus?

YES
15
56%
NO
9
33%
I don't care
3
11%
 
Total votes : 27

Euro in Cyprus?

Postby Sotos » Sun Dec 11, 2005 1:59 pm

10/12/2005
www.financialmirror.com

The euro "waiting room" is filling up with the latest applicant for the common European currency being Slovakia, which joined the exchange rate mechanism (ERM II) last month. Should the exchange rate for the Slovakian koruna deviate strongly, the issuing national bank in Bratislava will be forced to intervene.

Candidate countries must remain in ERM II for at least two years. Slovakia is the seventh of a total of 10 EU applicant countries, including Cyprus, which are headed for euro entry.

At first sight, it seems like a friction-free transition. Yet the eastward expansion of the eurozone from the previous total of 12 states and over 300 million people is causing a loud grinding of gears.

The largest accession country, Poland, is causing the most problems. After a change of government, the new conservative Prime Minister has indicated his readiness for a referendum on the euro in 2009. "It's a good idea to deepen direct democracy," his credo says.

Nothing has been decided yet. Joaquin Almunia, the Spanish E.U. currency commissioner in Brussels, is a strict opponent of euro referenda, saying that Poland is obliged to introduce the euro if it fulfils the entry conditions and he insists on the accession treaties.

Regardless of the referendum, one thing is clear: Poland is in no hurry about the euro; according to observers, it will scarcely be ready before 2012.

One further problem is posed by Hungary. Budapest is in the Brussels deficit doghouse because of its new deficit level of over 6% of gross domestic product. Since there are no sanctions against non-eurozone members, other means of coercion are being thought out, such as cutting off E.U. subsidies to Budapest.

Almunia has so far refrained from suggesting blocking the funds, amounting to billions. Despite the storm, Hungary maintains its intention to provide the euro currency for its citizens in 2010. Experts, however, have serious doubts that this schedule can be met.

Most of the new E.U. countries still have major difficulties in meeting the Maastricht convergence criteria on debt, inflation and long-term interest rates. Even the model pupils in the Baltic region, such as Estonia and Latvia, have excessive inflation rates with an early euro entry date for them seen as unrealistic. Next year in March, the E.U. Commission plans to present its report, after which the E.U. and the European Central Bank hope to make their decision.

Almunia has already criticised the inadequate preparations for the currency conversion, and Brussels is also concerned about ebbing public support for the euro.

This is where Cyprus should enter by showing that it is a model candidate for the euro adoption, a process that should continue smoothly up to January 1, 2008.

With the Central Bank of Cyprus already implementing its own “master plan” for the adoption of the euro, through various phases of introduction and negotiations with consumer and commercial groups to avoid any profiteering, it would be silly, even immature, for any interest group or political party to call for a further delay.

With so much going against us at the moment, the smooth adoption of the euro will instil a new air of confidence among the Cypriot consumers, workers and employers, who desperately need to come out of a stagnant political situation.

This newspaper has been in support of the euro from Day One and pledges to keep up the support for its introduction.


What are the benefits and disadvantages of adopting the Euro?
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Postby Christo » Sun Dec 11, 2005 2:15 pm

In my opinion,
I don't think that in the long run, it will make a blind bit of difference to the common people.

Apart from the initial hiccups when and if it happens, i.e. people getting used to the change, (no pun intended), haveing to get used to dealing in Euros, etc.......

People generally don't like change, and initially they will be for ever trying to convert every purchase back to cypounds and cents to see if the item they are buying is any more expensive than before the euro. Eventually this will go away, and then one day people will say..."Whats a cent?"

I believe, for the common people, if you are rich, you will stay rich, if you are poor....sorry!

For the travellers amongst us, its got to be better not to have to worry about changing up currency, getting travellers cheques etc.

My two cents worth!

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Postby cypezokyli » Sun Dec 11, 2005 4:59 pm

(for a moment i tought it was bir :))

it would be most propably beneficial in the long run. in the short run, everyone will try to get advantage of the other leading to higher prices.
being a tourist island it also makes it easier for tourists.

i would say go for it. the EU experience its like a bike. if you dont move ahead you fall.
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Postby Sotos » Mon Dec 12, 2005 1:26 am

the EU experience its like a bike. if you dont move ahead you fall.

I like this quote!! Did you think of it? I think Euro will be good for Cyprus since tourists will not have to worry about exchanging their money into pounds.
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Postby cypezokyli » Mon Dec 12, 2005 1:56 am

after so many hundrends of years of wise people i guess its difficult for someone to come up with sth original soto :wink:
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Postby TheCabbie » Wed Dec 14, 2005 3:37 am

Before you make your minds up talk to the "common people".
I've spoken to many Europeans (Spanish/French/Italian/Belgian/German/Irish/Greek) and most of them don't like it because it pushed the prices up and because they felt they'd lost a bit of their national pride. In Italy there's even a movement to get rid of the Euro and bring back the Italian Lira.

Personally I think there's no reason why they can't bring in parity, ie: 1=1, and let everybody keep their own currencies.
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Postby cypezokyli » Wed Dec 14, 2005 9:32 am

:shock:

if there are different currncies they cannot stay at 1=1. this system already broke down. in order to achieve exactly that, the have come up with the euro.
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Euro to run parallel to pound for a month

Postby Sotos » Thu Dec 22, 2005 12:37 am

THE EURO will be circulated in parallel with the Cyprus pound for a month before and a month after its introduction on January 1, 2008, Finance Minister Michalis Sarris said yesterday.

Sarris was speaking after a meeting with DIKO on progress in leading up to the island’s entry to the eurozone. He also met with representatives of the other parties. Central Bank Governor, Christodoulos Christodoulou attended the meetings.

Speaking afterward the DIKO meeting, Sarris said the aim of early circulation of the euro notes in parallel with the Cyprus pound was to give the public time to become used to them.

"It is very important to prepare properly for our integration into the eurozone,” he said, but warned that there would be “challenges”.

Sarris said the government’s aim was to maximise the benefits of eurozone entry while minimising any negative effects. The public is likely to be concerned that prices will rise when the euro is introduced, as happened in other EU countries.
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Postby rotate » Thu Dec 22, 2005 9:16 pm

Half way up/down the mountains where I live most of the older people still calculate in piastres, shillings or mils if they are a little younger. Local business people calculate from cents into these multi currencies to satisfy their customers :D

Had me thinking hard when I was asked for fifty five shillings for a fresh chicken by an eighty something year old, who when she realised my confusion commented 'but you are English, you must understand shillings'. There was absolutely no point in trying to explain that the last time I had paid for anything in shillings was a lifetime ago :shock:

The euro/evro is the subject of some heated discussion in the coffee shop, general opinion is that its being imposed on the Cypriot's by the English! Generally I enjoy a bit of banter on Anglo Cypriot matters and usually I can give as good as I get without offending local sensibilities, but this theory has me stumped :argue:
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Postby Sotos » Sat Dec 24, 2005 2:42 pm

I was also counting in shillings for some years after the introduction of cents! 5c = 1shilling, 20c = tetraselino thats how we did the math :P Sometimes we still call the 5c coin as "selini" :lol:
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