The single currency

Author: | Published: 1 Apr 2007
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Cyprus has formally submitted its application to adopt the euro as its national currency with effect from January 1 2008.

The House of Representatives has now passed the four laws required to complete Cyprus's legal convergence and set the framework for transition to the European common currency, in anticipation of a mid-March visit to Cyprus by a delegation from the European Central Bank for the purposes of assessing the legislative framework and financial situation.

The European Commission and the European Central Bank are expected to report on Cyprus's application to the EU foreign ministers' meeting in mid-May. Based on the foreign ministers' recommendations, a final decision on the application will be taken at the EU summit in June.

In addition to its benefits for consumers, the euro will have even greater advantages for business. Work is well advanced on the development of a Single Euro Payments Area (SEPA) and the development of a single set of euro payment instruments – credit transfers, direct debits and card payments – which will enable funds transfers to be made anywhere within the Eurozone just as conveniently as domestic transactions. The new SEPA payment instruments are expected to become available at the beginning of 2008, at the same time as Cyprus adopts the euro. They will operate alongside existing domestic mechanisms until the end of 2010, when purely national solutions for core credit transfers and direct debits, and purely national card schemes will no longer exist.