Introduction of banknotes in - - Views from the ECB –

(Copyright remains with the author)

Thomas Schweikart

Conference on the changeover to the euro in Slovakia Brussels, 5 May 2009 Outline

• Background • Euro cash introduction • Preparation for the application of cash management standards and production scenario • Lessons learned Background

• The ECB has the exclusive right to authorise the issue of • Member States may issue subject to the approval by the ECB of the volume of the issue • The ECB arranges Workshops for non- euro area national central banks (NCBs) to prepare their joining the Eurosystem The euro cash introduction

• Legal preparations • Logistical preparations • Communications • Monitoring and reporting Legal preparations

• ECB Guideline on preparations for the cash changeover and on frontloading and sub-frontloading, as amended in 2008 - legal basis for borrowing euro banknotes and coins for the initial supply from Eurosystem stocks - regulates conditions for the pre-distribution (frontloading and sub- frontloading) of euro to the banking and retail sector • Decision on banknote borrowing • ECB Guideline on exchange of Slovak Koruna banknotes with euro banknotes Logistical preparations

• Use of Eurosystem banknote stocks • Frontloading and sub-frontloading - Incentive: Deferred debiting model - Conditions for transport, storage, security, monitoring etc. • Exchange of Slovak Koruna banknotes by euro area NCBs Euro campaign in Slovakia

• Semi-centralised communication strategy => Each party takes care of the tasks it is responsible for • Co-ordination with the EC & the local governmental authorities to enhance complementarity of actions / efficiency towards population • Joint monitoring of the ECB and the NCBs of the technical preparations and execution of euro information campaigns on the following aspects: 1. The visual appearance of the euro banknotes and coins 2. Their security features 3. The modalities of the cash changeover Monitoring and reporting

• Regular reports on the preparations • After €-day daily NCB reports on the progress of the euro cash changeover • Daily teleconferences during the first week after €-day and then less frequently Application of the Eurosystem cash management standards

• Common service fee policy • Common policies for cash handling and cash recycling by third parties • Roadmap to more convergence of NCB cash services Implementation of the Eurosystem production scenario

• Development of the Eurosystem production scenario - Decentralised production with pooling - Long term: single Eurosystem tender procedure • Quality and security accreditation of banknote suppliers and audits of mints Lessons learned

• Success factors remain as earlier • Estimation of the euro banknote requirement is difficult