COUNCIL OF Brussels, 30 November 2007 THE EUROPEAN UNION 15944/07 ADD 1 ECOFIN 500 UEM 187 COVER NOTE from: Secretary-General of the European Commission, signed by Mr Jordi AYET PUIGARNAU, Director date of receipt: 28 November 2007 to: Mr Javier SOLANA, Secretary-General/High Representative Subject: Commission staff working document - Annex to the Communication from The Commission to the Council, the European Parliament, the European Economic and Social Committee, the Committee of the Regions and t he European Central Bank Sixth report on the practical preparations for the future enlargement of the euro area. Delegations will find attached Commission document SEC(2007) 1574/2. ________________________ Encl. : SEC(2007) 1574/2 15944/07 ADD 1 KG/cd 1 DG G I EN COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 29.11.2007 SEC(2007) 1574/2 CORRIGENDUM Annule et remplace les pages 9 et 10 du document SEC(2007) 1574 du 27.11.2007 COMMISSION STAFF WORKING DOCUMENT Annex to the COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN PARLIAMENT, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN CENTRAL BANK Sixth report on the practical preparations for the future enlargement of the euro area {COM(2007) 756 final} EN EN 1. INTRODUCTION This working paper, drawn up by the Commission services, provides for detailed information on the state of preparations for the introduction of the euro in the Member States which yet have to adopt the euro. Section 2 summarises the situation in each of the countries concerned, with a special focus on the preparations in Slovakia which aims at adopting the euro on 1 January 2009. Section 3 presents the state of public opinion with respect to the euro. Annex 1 is a checklist on certain relevant changeover characteristics, and Annex 2 gives a synoptic overview of the state of the national changeover preparations. The preparations in Cyprus and Malta are addressed in detail in the Commission's Sixth report on the practical preparations for the future enlargement of the euro area. 2. PREPARATIONS AT NATIONAL LEVEL 2.1. Bulgaria Bulgaria has set no target date for the adoption of the euro. The practical preparations for the introduction of the euro have not yet started. 2.2. Czech Republic The Czech Republic has set no target date for the adoption of the euro. The first version of the National Euro Changeover Plan was adopted by the government on 11 April 2007 and published both in Czech and English. On 29 August 2007, an update of the Czech Republic's euro-area Accession Strategy was approved by the government. It is a joint document of the Czech government and the Czech National Bank. It deals with the ability of the Czech economy to operate in the euro area and the economic policy challenges and prospects for the Czech Republic. Furthermore, a new euro website has been created (both in Czech and English). 1 In October 2007, a conference "Preparations of the Czech Republic for the euro adoption" was held in Prague. 2.3. Estonia The first version of the euro adoption plan was approved by the Estonian government on 1 September 2005. It was subsequently updated several times. The current fifth version was adopted by the government on 31 October 2006 and largely corresponds to the previous one. Due to the abandonment of a specific target date, it refers to "€-day". 2.4. Latvia The government of Latvia approved an Action Plan for Implementation of the Single European Currency on 1 November 2005 and the first version of Latvia's National Euro Changeover Plan on 28 February 2006. On 25 September 2007, the government approved the 1 http:// www.zavedenieura.cz EN 2 EN updated version of the changeover plan and the related action plan. There are two main changes. First, the reference to a specific date for euro adoption has been dropped. Instead, the government undertakes to set the target date for the adoption of the euro at least 24 months ahead of the expected date on the basis of the outlook for fulfilling the convergence criteria as detailed in the Convergence Programme and related documents. Second, the annexed Action plan has been restructured so that all activities are now divided into two groups; activities that are not directly related to the target date (e.g. communication activities, adoption of legislation, etc.) and those that are directly related to the date of introducing the euro and which can start at the earliest 24 months before the target date. 2.5. Lithuania A national co-ordination committee for the changeover was established on 30 May 2005 and a national changeover plan was approved by the government on 27 September 2005. Following the assessment adopted by the Commission on 16 May 2006 that Lithuania did not fulfil all convergence criteria and that its derogation should consequently not be lifted, Lithuania has not set a new specific target date for adopting the euro. A second version of the national changeover plan and a new communication strategy were adopted on 25 April 2007. Apart from not setting any specific target date anymore, the new version foresees, inter alia, a longer period for dual display of prices (120 days before and after €-day) and an earlier start of the frontloading to the commercial banks (before 1 December at the latest). 2.6. Hungary Hungary has set no target date for the adoption of the euro. On 12 September 2007, it decided to set up the National Euro Coordination Committee. This committee is chaired by the Minister of Finance and co-chaired by the Governor of the Central Bank of Hungary. It shall report on its activities and the progress made in technical preparations for the euro introduction biannually to the government and annually to the respective committees of the Parliament . The first version of a national changeover plan prepared by this committee shall be submitted to the government for approval by 30 June 2008. 2.7. Poland Poland has neither a target date for the adoption of the euro nor a national changeover plan. The National Bank of Poland established the 'Bureau for the Integration with the Euro Area'. Its main task is to prepare a report on Poland's membership in the euro area. This report, which is planned to be finalised by the end of 2008, will notably define the optimal conditions for the adoption of the euro in Poland and provide guidance for decisions taken in the process of the adoption of the euro. 2.8. Romania Romania has set 2014 as its target year for the adoption of the euro. The practical preparations for the introduction of the euro have not yet started. 2.9. Slovakia 2.9.1. General framework Slovakia aspires to adopt the euro on 1 January 2009 under a "big bang" scenario with a dual circulation period of 16 days. Slovakia adopted a comprehensive national changeover plan on EN 3 EN 6 July 2005. Afterwards preparations slowed down, mainly because of parliamentary elections in June 2006. On 21 March 2007, the government approved an update of the national changeover plan, which covers, inter alia, the front- and sub-frontloading of euro cash, the dual display of prices and several initiatives dealing with consumer protection issues. On 3 July 2007, the National Bank of Slovakia approved the strategy for the introduction of euro cash into circulation and for the withdrawal and destruction of the Slovak currency, which was prepared on the basis of the national changeover plan. The purpose of the document is to create the basic conditions for the successful introduction of euro cash into circulation and to ensure the availability of sufficient amounts of euro banknotes and coins. 2.9.2. Financial sector and enterprises Frontloading of euro coins and banknotes to commercial banks is planned to start in September and mid-November 2008, respectively. The sub-frontloading of the retail sector is envisaged for November and December 2008. By the end of March 2008, banks should inform the National Bank of Slovakia of their requirements for euro banknotes and coins broken down by denominations for the purpose of frontloading as well as the first two weeks of 2009. The definitive amount of euro cash to be frontloaded and sub-frontloaded will be laid down in contracts which will be concluded with the banks. It is envisaged that as of 1 January 2009, all ATMs will distribute euro only, while retailers will give change in euro only. Starter-kits for the general public, which are currently not foreseen, should be made available in order to ensure that citizens have sufficient amounts of euro coins at their disposal for payments immediately as from €-day. The National Bank of Slovakia will continue to exchange national coins free of charge during five years after €-day and national banknotes without time limit. Commercial banks will exchange koruna coins and banknotes for euro free of charge until the end of June and December 2009, respectively. 2.9.3. Public administration The National Coordination Committee for the Euro Changeover is the supreme coordinating body preparing the changeover in Slovakia. The committee is chaired by the Minister of Finance and co-chaired by the Governor of the National Bank of Slovakia. A Plenipotentiary of the government for the introduction of the euro was appointed in December 2005 to intensify preparatory activities. The final designs of the national sides of the Slovak euro coins were approved in April 2007. A Memorandum of Understanding between the Slovak Republic, euro-area Member States and the European Commission on the start of preparatory tasks prior to the start of mass production of euro coins was signed in June 2007.