On Friday this week Cyprus will be signing a cooperation agreement with the European Commission on information for the European citizen regarding the euro.
The Cyprus pound entered the Exchange Rate Mechanism (ERM2) one year ago on May 2nd at a central parity rate of 0.585274 per euro.
It has remained stronger than that central rate ever since, recording a mid-rate of 0.5760 on Friday April 28.
Cyprus is now around a year and a half away from its targeted euro adoption date of January 1st 2008 and a year away from the final assessment to see if it meets all the Maastricht criteria on the deficit, debt, inflation, interest rates and exchange rates.
The final locking of the exchange rate, which is expected to be the same as the central parity rate, is expected in the second half of 2007.
Cypriots are however nervous about adoption the euro, fearing that it will lead to a spike in prices.
The communisty party AKEL, which is the main coalition party, called again recently for a delay in the adoption of the euro.
According to the European Commission, the cooperation agreement to strengthen the Cypriot national programme for the euro will be signed by Commissioner for Economic and Monetary Affairs Joaquin Almunia and Cypriot Minister of Finance Michalis Sarris.
The agreement falls within the EU information programme for the European citizen “Prince”, which was established in 1995 with an aim to provide full information to the Europeans regarding the euro, and will allow Cyprus to receive support from the Commission for various activities, such as advertising campaigns, the circulation of leaflets and the organisation of conferences.
Almunia will also be signing such an agreement on May 5 with Malta.
Meawhile, Central Bank Governor Christodoulos Christodoulou has urged Cyprus to take advantage of accession to the European Union and ERM2.
Christodoulou was speaking at the opening in Southgate UK of new regional offices of Bank of Cyprus, the island’s largest commercial bank.
Christodoulou underlined “multiple and significant” commercial, economic and social ties with the United Kingdom.
