Cypriots most pessimistic on euro adoption

… 89% trust Central Bank to handle changeover

 

Cypriots are once again the most pessimistic on the forthcoming adoption of the euro on January 1, 2008 according to a Eurobarmoeter poll held in September, which confirms a previous article by the Financial Mirror with respect to serious shortcoming and lack of direction and plan of action by the national committee for the adoption of the euro.

A record 84% of Cypriots fear wide-spread cheating and price hikes during the changeover, the highest among the 10 New Member States (NMS10), while 71% fear the euro will increase inflation and 51% say it will be an inconvenience, the Eurobarometer poll conducted during September 4-8, 2006 showed.

The findings of the report are basically the same to a similar poll held in April 2006 and last year, yet the Cyprus National Committee for the adoption of the euro has not yet come up with a coherent plan to address such fears.

Cypriots are also the most pessimistic with respect to expectations on whether the euro adoption will have a positive consequence for the country. Only 29% think so, the lowest among the NMS10, which is also down from 35% in April 2006, 36% in Sep 05 and 49% in Sep 04.

As usual, Cypriots were least optimistic on whether euro will help bring price stability, with only 11% believing so and 71% expecting euro adoption to give to rise to higher inflation.

In Cyprus, the largest political party, AKEL, a dominant member of the ruling coalition, recently announced that the introduction of the euro might have to be postponed for another year, due to the inability to fulfil the necessary stability criteria for 2008. In a climate where citizens are highly concerned about the perceived negative effect of the euro on prices and the dominant sentiment is pessimism, such messages from the political elite seem to deteriorate the unfriendly climate even further.

Maltese and Cypriots continue to be most pessimistic about the possible consequences of changing their currency. Compared to the 2004 figure, in Cyprus the optimism has declined by 20 percentage points regarding possible national-level consequences of euro introduction and by 6 percentage points from April 2006.

Respondents in Cyprus and in the Baltic countries are most likely to say that the people they know are against the adoption of the single currency.

 

Trust

Trust is a key factor in information provision: people differentiate between possible sources primarily based on their assessments of how trustworthy a particular source is. An overwhelming, or 89% of Cypriots trust the Central Bank to handle the euro adoption, sending a powerful message to the government to disband the National Committee for the adoption of the euro and instead give the task to the Central Bank.

The Eurobaromter poll also found that 59% of Cypriots want to be immediately informed on the euro, with TV, Banks and newspapers as the most preferred method through which they wish to learn and understand about the euro changeover.

Of the respondents 92% think the TV is the best method to learn about the euro, 86% through the banks and 80% through newspapers.

 

Information campaign sucks

Only 39% of respondents in Cyprus said they are well informed on the euro, close to the NMS10 average of 40%, while 60% of Cypriots said they are not well informed on the euro, also close to the EU average.

This is yet another reason to disband the existing National Committee and replace it with a more effective committee under the umbrella of the Central Bank, which enjoys the trust of the population for getting the job done.

 

Advantages

An undisputed advantage of joining the eurozone concerns tourists: all respondents in every country agreed that it would be more convenient to travel in another country of the euro area (ranging from 91% in Slovakia and Lithuania to 97% in Slovenia and Estonia). Almost nine out of ten people still widely agree that it will be easier to shop in other countries using the euro (89%, it was 90% in April 2006). Only 2 percentage points fewer respondents than in April 2006 agreed that comparing prices would become easier between countries in the eurozone (81%). Eight out of ten respondents (80%, +2) see benefits in the elimination of exchange charges within countries of the euro area, and this is the only item with on which slightly more respondents agreed than half a year ago.

 

 

Euro banknotes & design

The poll found that 83% of Cypriots have seen a euro banknote, 69% have used it while 79% had seen a euro coin and 67% used a euro coin. As to the design of the common currency, respondents remain confused and we find no change in the ratio of correct answers from April 2006. Again only the minority of the New Member States’ population is able to correctly identify that banknotes are entirely the same throughout the eurozone, and that the technically similar coins do have national designs (.sides.) that contain relevant symbols pertaining to the Member State involved.

 

No choice

The number of countries that use the euro might not be a vital piece of information for most citizens of the countries en route to adopt the euro, but notions about the possibility to opt-out do have a more direct influence on the national politics of the New Member States. Still the majority of citizens in each surveyed country believe that their nation has a choice about whether or not they will join the European Monetary Union and, thus, whether it will adopt the euro (67% vs. only 26% having an opposite opinion). These figures didnt change from the last wave when 69% and 26%, respectively, mentioned so. Fact is that the Accession Treaty did not leave such legal choice for these countries.

 

 

Topics

The most important among the preferred topics is the value of the national currency in euros, as it was in April 2006; citizens almost unanimously noted this element as an essential aspect of a euro campaign (93%). It is similarly important to provide information about how to avoid being cheated in euro conversions until a full changeover will have taken place (92%). It is deemed to be very essential to have information provided about the general scenario of how the euro will be introduced in ones country (90%), i.e. the important dates and milestones of exchanging their current legal tender to the euro and about the practical implications of the euro regarding the salaries and bank accounts. There is no change in these ratings from April 2006.

In the present survey the social, economic and political implications of the euro are considered to be the least essential element of an information campaign with 82% of citizens mentioning it (-4 percentage point change compared to April 2006).

A dual display of prices is found most essential, both in shops (85%) and on utility bills (75%). Most people expect that advertisements will explain the situation in newspapers (70%) and on television (70%). Most people do not actually have a pay slip as they are not in employment, but seven out of ten would see this way of operating as essential as well in preparation for a euro switchover (70%). People consider leaflets and brochures the least necessary in their personal preparations for euro adoption (60%).

The survey fieldwork was carried out between 4 – 8 of September 2006. Over 10,000 randomly selected citizens aged 15 years and above were interviewed in the ten new EU Member States.

The survey was dominantly carried out via telephone, with WebCATI (web-based computer aided telephone interviewing).