Published on March 13, 2014
Euro changeover in Latvia March 2014
The content 1. Macroeconomical background 2. Technical preparation, including euro communication 3. Changeover conclusions
Latvia – one of the hardest hit countries in the economic crisis of 2009 Euro target – crisis exit strategy 2008 Agreement on the International Loan Programme 2011 Completion of the International Loan Programme Correction of economic imbalances Support from domestic and international community Fall in external demand Restored fiscal viability Return of economic growth in 2010 Credit rating upgrade Social protection measures for the most vulnerable Fiscal consolidation and structural reforms underpin competitiveness 21% contraction of GDP, frontloaded fiscal adjustment 17% of GDP Impact of the crisis Internal devaluation Outcome of the crisis Access to financial markets closed Return to financial markets
EURO – key driving force for change • EURO = crisis exit strategy • EURO = key driving force: › to put Latvian economy on solid ground › to implement structural reforms Property boom led Latvia to crisis starting 2008, while now the growth is based on a healthy economic foundation and fiscal discipline.
In the third quarter 2013 economic growth in Latvia still was the fastest in the EU Data: Eurostat GDP growth flash estimate in Q3 2013, % (seasonally adjusted data ) -5,3 -3,0 -1,6 -1,0 -0,7 -0,6 -0,6 -0,4 0,4 0,5 0,5 0,5 0,6 0,7 0,7 0,9 1,1 1,1 1,5 1,8 1,9 2,0 2,2 4,1 4,5 -6 -4 -2 0 2 4 6 Cyprus Greece Italy Finland Spain Croatia Netherlands CzechRep. Belgium Austria Denmark France Slovenia Estonia Sweden Slovakia Germany UK Bulgaria Hungary Malta Poland Lithuania Romania Latvia
Core inflation has remained low for an extended period of time Consumer Price Index (CPI), annual growth, contributions, % Data source: CSB
Unemployment keeps declining and is now below the Eurozone average Registered unemployment & job seeker rate, % Data source: CSB, State Employment Agency
Latvia's credit ratings have been upgraded and currently have positive outlooks Latvia’s sovereign rating on long-term foreign currency debt
Fiscal targets have been constantly outperformed and we are committed to achieve more... Fiscal Targets and Results -9,8 -8,1 -3,6 -1,2 -10,0 -8,5 -6,0 -3,0 -1,9 -1,1 -4,5 -2,5 -1,9 -1,4 -0,8 -0,3 -1,6 -0,9 -0,9 -0,8 -10 -9 -8 -7 -6 -5 -4 -3 -2 -1 0 2009 2010 2011 2012 2013 2014 2015 2016 %ofGDP Actual Initial target 2009 Target 2011 Target 2012 Target 2013 2014 Joining Eurozone - 3%- 3%
Latvia in the euro area – what can be expected from the new member? a silent partner? focused exclusively on its short term gains/loses? indifferent to common problems ? no cold to acts of solidarity? no strong advocate to respect adopted rules? yes believers to fiscal discipline? yes ally towards closer integration in EMU? yes no no
The euro is not a “magic wand” for all economic difficulties, but an instrument which can be used to contribute to the growth of economic potential.
Technical preparation, including euro communication
Euro Coordination Council Steering Committee Euro Bureau State Administration Working Group Money and Payment Systems Working Group Financial System Working Group Non-financial Corporation and Consumer Working Group Public Awareness and Communication Working Group National law and IT systems Cash and non-cash changeover Financial and capital markets Fare price display Informing and educating T A S K S Established in 2005 to coordinate the process of the introduction of the euro
Media Merchants: cash registers, price display, etc.Communica- tors Banks Inhabitants: librarians, info centers Accounting and taxes Risks assessment Professional expert grouping IT registry Municipalities
Latvia's National Euro Changeover Plan and regular progress reports - Submitted to the Cabinet of Ministers already the 24th regular progress report and on 22 January 2014 there was held already the 42nd meeting of the Steering Committee. - Both the Plan and progress reports are publicly available at the eiro.lv. The Plan is available in Latvian, English and Russian languages. The Latvia's National Euro Changeover Plan was drafted in 2005, and its first edition was approved on 26 March 2006. Until April 2013 the Plan has been updated five times
The main stages 18.07.2005- 01.01.2012 01.01.2012- 09.07.2013 09.07.2013- 09.12.2013 09.12.2013- 14.01.2014 Final stage SUPERVISION INTENSIVE SUPERVISION SUPERVISION - Planning - Euro payment systems - Price monitoring (06.2006-09.2008) - Developed eiro.lv - Established the communication strategy - National law adjustment concept and the Euro Law - Seminars - Establishing cooperation network with NGOs and municipalities - IT systems - Cost estimates - Intensive communication stage - Initiative «Fair euro introducer» - Cash logistics - IT testing phase and development of technical infrastructure - Starter kits and sub-frontloading - New Year's night transition period: ATM, POS, cash registers and cash systems, internetbanking, IT systems - Final public survey - Until 04.2014 euro info line services - Until the end of 2014 price monitoring continues - Accounting and re- denomination of equity capital stock issues
Cash changeover Cash changeover map: - Geographic proximity*: all banks, in regions – 302 post offices - Security - Effectiveness and cost efficiency * In places, where is no changover point, average distance to the nearest changover point is 10 km Cash changeover: - Until 31 March at 302 post offices - Until 30 June in all commercial banks - Unlimited time period at the Bank of Latvia
Security – Security action plan was developed already in 2012. – Plan provides the measures enhancing the safety of inhabitants, retailers and cash transport by Cash-in-transit sector during changeover period. – The capacity of the State police has been substantially strengthen.
Action plan for bad weather conditions – Signed cooperation agreement with the Latvian State Roads – special road maintenance at the request of the State police Operational Command center – Development of tactic in case of evacuation need of transported cash (as example – use of State Border Guard helicopter)
Euro introduction costs • Article 5 Euro Law on the Procedure for the Introduction of Euro and one of core principles of the euro introduction – • All agents shall have the responsibility for the euro implementation costs, while the government budget shall have the responsibility for the costs of the institutions financed from the state budget.
Public sector costs 13.8 million euro in total – • 5.8 – IT systems • 3.5 – cash changeover at post offices in rural areas • 2.0 – communication campaign • 1.8 – additional security costs • 0.5 – price monitoring and other activities related to non-financial sector • 0.2 – strengthen capacity for legal acts adjustments
Public sector costs • More than 90% of IT costs are planned to be financed by the European Regional Development Fund; • 50% of communication costs are planned to be co-financed by the European Commission.
Total euro introduction costs • According to the research from the National Central Bank of Slovakia there are average euro introduction costs from 0.3 up to 0.8% from the GDP (March 2006) • According to the research from the Bank of Latvia the total cost of the euro introduction in Latvia might be assessed among 110-219 million EUR (September 2012)
Technical preparation: State administration working group
Structure of the State Administration Working Group Chairman: Ms Arina Andreičika Ministry of Finance Head of the Euro Bureau Accounting sub-group leads by the MoF Statistics sub-group Leads by the CSB IT ad hoc sub-group leads by the ICT line ministry in cooperation with E&Y Baltic Members: Representatives from all ministries, the Bank of Latvia, Latvian Post, Latvian association of local and regional governments and the Treasury
The main aims and tasks - Adjustment of national law related to the introduction of the euro - Adjustment of statistics, accounting and other state information systems for the introduction of the euro - Development of practical guidelines for companies regarding accounting, tax issues, cash registers, statistics, post stamps, gift cards, etc. - Monitoring and assisting local governments transition to the euro
The Law on the Procedure for Introducing the Euro - Has been drafted in coordination with the ECB - Establishes clear legal framework - Outlines basic principles for the transition of cash and non cash transactions and revaluations, including, but not limited to: the parallel circulation period of lats and euro, dual price display, accounting, tax payments and credit record treatment, financial market treatments, and enforcement
The preparatory works monitoring at the municipal level - Legal acts adjustment until 1 December 2013 - IT systems adjustment time planning in accordance with the Changeover Plan - Municipal companies' IT readiness, application to «Fair Euro Introducer» and equity capital stock redenomination - Regional seminars
The main stages 18.07.2005- 01.01.2012 01.01.2012- 31.01.2013 31.01.2013- 09.12.2013 09.12.2013- 14.01.2014 Final stage - Planning - Drafting the list of IT systems and cost assessment - Drafting the Law on the Procedure for Introduction of the Euro - Development of practical guidelines - Adjusting national law - Adjusting IT systems - Local government monitoring - Detailed daily supervision of IT systems and cash registers of the different merchant areas - Accounting and redenomination of equity capital stock issues - Professional seminars have been organised in Riga and regions
The main accomplishments Adjustment of national law. In cooperation with the Ministry of Justice, State Chancellery and the Ministry of Environmental Protection and Regional Development (MEPRD) - 113 laws - 603 rules of the Cabinet of Ministers - 1504 local government binding rules (information on 15 January 2014) Adjustment of IT systems. In cooperation with MEPRD and E&Y Baltic - 106 state IT systems - 463 local government IT systems (information on 15 January 2014) - Particular cooperation with IT developers – FMS, ZZ Dats and Exigen Services Latvia
Money and Payment System Working Group A. Ruselis Head of MPSWG Vice president of the Bank of Latvia
Money and Payment System Working Group (MPSWG) structure MPSWG leads by the vice president of the Bank of Latvia Security sub-group leads by the Ministry of Interior Frontloading and Sub- frontloading sub-group leads by the Bank of Latvia SEPA sub-group leads by the Bank of Latvia 65 working group and sub-group meetings since establishment of MPSWG (in 2005) MPSWG members: Bank of Latvia, the Ministry of Transport, Latvian Post, the Ministry of Interior, The Treasury, Central Depository, the Association of Commercial Banks of Latvia
MPSWG main activities • Issues of the introduction of the euro cash and non-cash payments Logistics of the euro coins and banknotes Management of the euro frontloading and sub-frontloading Adjustment of the payment systems to the euro Withdrawal of lats from the circulation Management of the security activities regarding the introduction of the euro Risk management • Participation in the euro communication activities Participation in seminars and other communication activitities regarding the euro • Participation in developing legislative framework Proposals to improve the process of the introduction of euro Close cooperation with other Steering Committee working groups • Other activities in terms of MPSWG competence
The main stages Management of the euro frontloading and sub-frontloading Logistics of the euro coins and banknotes Euro sub-frontloading to retail chains Detailed supervision regarding adjustments in payment systems 01.01.2006 - 01.12.2013 01.01.2012 - 31.12.2013 01.08. 2013 - 31.12.2013 09.12.2013 - 14.01.2014 01.01.2013 - 31.12.2013 Adjustmement of ATM and other devices 01.11.2004 – 31.12.2013 Activities regarding large value payment systems, ACH, direct debit and cards infrastructure adjustments to the euro. Readiness to participate in Target2 since 11.2007.
Detailed supervision over the euro payment introduction • Drafting and managing MPSWG detailed plan covered time period from 9 December 2013 until 14 January 2014 more than 500 activities Involves the Bank of Latvia, the Treasury, Latvian Post, 22 banks, other participants of the payment system and the State Police • Comprehensive and early communication with all institutions involved in MPSWG and in the Euro project • Early response and identification of the problems
Preparations for the cash changeover • 400 million euro coins bearing Latvian national sides and 110 million euro banknotes of various denominations were required for the changeover. • The delivery started in July 2013 and the final batch will be delivered in March 2014. • Frontloading to the credit institutions started on 1 November and sub- frontloading to the non-financial sector – on 10 December.
Starter kit for general public • Available to general public via all commercial banks, 302 post offices and Bank of Latvia as from 10 December 2013 • Value – 10 LVL (14.23 EUR) • Prepared 800 thousand pieces; were sold till 31 December – 644 thousand pieces
Starter kit for business • Available as from 10 December up to 28 Decembers 2013 • Value – 140.56 LVL (200 EUR) • Some banks and CIT companies formed their own starter kits • Sold 70 000 pieces
Interbank payments 02.01.2014 until 08.45* Card payments Without interruption I-bank and on-us payments 01.01.2014 until 12:00 Main MSPWG objective – to ensure fast recovery of financial services ATM 01.01.2014 until 01.00* * Maximum time of interruption in the most important banks, in terms of amount of customers
FINANCIAL SYSTEM WORKING GROUP Pēters Putniņš, Deputy Chairman of the Financial and Capital Market Commission (FCMC), Head of the Financial System Working Group
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LATVIJAS REPUBLIKAS EKONOMIKAS MINISTRIJA MINISTRY OF ECONOMICS OF THE REPUBLIC OF LATVIA Non-financial Corporation and Consumer Working Group's euro introduction activities Zaiga Liepiņa, Deputy State secretary of the Ministry of Economics
LATVIJAS REPUBLIKAS EKONOMIKAS MINISTRIJA MINISTRY OF ECONOMICS OF THE REPUBLIC OF LATVIA 51 NCCWG members and competence Employers' Confederation of Latvia , Latvian Chamber of Commerce and Industry, Latvian Food retailers association, Latvian Traders Association, Latvian Fuel Traders Association, Consumer Rights Protection Centre, Latvian National Association for Consumer Protection, Investment and Development Agency of Latvia, Competition Council, Ministry of Environmental Protection and Regional Development, Bank of Latvia Ministry of Economics Competence: Price monitoring Goods, services price display control Initiative «Fair euro introducer» Professional seminars for entrepreneurs
LATVIJAS REPUBLIKAS EKONOMIKAS MINISTRIJA MINISTRY OF ECONOMICS OF THE REPUBLIC OF LATVIA 52 For a first time from June 2006 to September 2008 From January 2013 to December 2014 120 goods and services More than 400 retail un service spots in whole Latvia In one day From October to March – 4 times a month Information www.em.gov.lv Price monitoring
LATVIJAS REPUBLIKAS EKONOMIKAS MINISTRIJA MINISTRY OF ECONOMICS OF THE REPUBLIC OF LATVIA 53 On average in whole observational period 4,52% of prices have increased, but 4,9 % of prices have decreased On average 90,43% of prices have stayed the same Price fluctuation mainly can be explained with seasonality, and raw material price increase Bank of Latvia, Ministry of Economics, Consumer Rights Protection Centre (CRPC) and Competition Council are following these results Main observations from price monitoring:
LATVIJAS REPUBLIKAS EKONOMIKAS MINISTRIJA MINISTRY OF ECONOMICS OF THE REPUBLIC OF LATVIA 54 Results of price monitoring (mothly - March to September 2013) 86% 90,5% 85% 86% 83,3% 86,92% 85% 6% 4,5% 6% 8% 9,3% 4,51% 9% 8% 5% 9% 6% 7,4% 8,57% 6% 0% 20% 40% 60% 80% 100% 120% March April May June July August September Price decresed Price increased Fixed price
LATVIJAS REPUBLIKAS EKONOMIKAS MINISTRIJA MINISTRY OF ECONOMICS OF THE REPUBLIC OF LATVIA 55 Results of price monitoring (weekly from October 2013 till January 2014) 83% 93,53% 95% 97% 83,23% 95,19% 95,37% 95,30% 95,80% 95,80% 95,90% 96,20% 91,20% 95,50% 92,70% 7% 2,51% 2% 0,80%7,34% 1,71% 2,53% 3,00% 2,40% 2,80% 2,00% 2,20% 3,80% 2,10% 3,60% 9% 4,06% 3% 2,20% 9,43%3,10%2,10%1,70%1,80% 1,40% 2,10% 1,60% 5,00%2,40% 3,70% 0% 20% 40% 60% 80% 100% 120% Oct.01 Oct.02 Oct.03 Oct.04 Nov.01 Nov.02 Nov.03 Nov.04 Dec.01 Dec.02 Dec.03 Dec.04 Jan.01 Jan.02 Jan.03 Price decreased Price inreased Fixed price
LATVIJAS REPUBLIKAS EKONOMIKAS MINISTRIJA MINISTRY OF ECONOMICS OF THE REPUBLIC OF LATVIA 56 Inspections are carried out by: CRPC inspectors(15 000 inspections) Latvian National Association for Consumer Protection (signed cooperation agreement, 13 000 inspections) In addition to daily duties: Food and Veterinary Service inspectors State Revenue Service inspectors Price display control
LATVIJAS REPUBLIKAS EKONOMIKAS MINISTRIJA MINISTRY OF ECONOMICS OF THE REPUBLIC OF LATVIA 57 10 787 inspections and 3306 violations dedected (33%) Most common violations – prices are not displayed in both currencies, incorrect convertion Out of 3131 cases in 2405 cases or in 77% of overall cases violations are corrected: 46% already during inspection 31% entrepreneurs submited proof that violations are corrected Results (on 01.12.2013.):
LATVIJAS REPUBLIKAS EKONOMIKAS MINISTRIJA MINISTRY OF ECONOMICS OF THE REPUBLIC OF LATVIA 58 CRPC initiated 22 cases in accordence with Administrative Violations Code (AVC) 7 AVC decisions to impose penalty 3 AVC cases closed with verbal admonishment List with punished enterprises available at CRPC home page Administrative cases:
LATVIJAS REPUBLIKAS EKONOMIKAS MINISTRIJA MINISTRY OF ECONOMICS OF THE REPUBLIC OF LATVIA 59 The BUSINESS initiative «FAIR EURO INTRODUCER» Time: July 2013 - June 2014
LATVIJAS REPUBLIKAS EKONOMIKAS MINISTRIJA MINISTRY OF ECONOMICS OF THE REPUBLIC OF LATVIA 60 Goals and principles of Memorandum Timeline and preparatory work Application for Memorandum Promoting of participation and other supporting activities Practical recommendations Content:
LATVIJAS REPUBLIKAS EKONOMIKAS MINISTRIJA MINISTRY OF ECONOMICS OF THE REPUBLIC OF LATVIA 61 Goal: Honest and transparent implementation of the euro in Latvia Protection against unjustified price increase as a result of the introduction of the euro Including business as proactive and equal partners in strengthening consumer confidence Target number – 5 000 merchants or 30 000 points of sale Message: Joining “Fair euro introducer” = confirmation of fair and responsible business practice GOAL & MESSAGE:
LATVIJAS REPUBLIKAS EKONOMIKAS MINISTRIJA MINISTRY OF ECONOMICS OF THE REPUBLIC OF LATVIA 62 1. do not use the introduction of the euro for price increase; 2. indicate clear prices in lats and in euros; 3. provide fair recalculation of prices from lats to euros; 4. facilitate participation in Memorandum of partners, suppliers and customers; 5. train and inform employees on matters related to introduction of euro. Memorandum – 5 principles
LATVIJAS REPUBLIKAS EKONOMIKAS MINISTRIJA MINISTRY OF ECONOMICS OF THE REPUBLIC OF LATVIA 63 Timeline 2013 Mar-Apr May June July Aug Sept Oct Nov Dec Best practice study (experience of Estonia, Slovakia) 1.-7.07. public consultations and amendments to Memorandum From 5.08. – sending out invitation letters to business 9.09-13.10. advertising campaign for business 1.03. - starts tender for public procurement 24.05. signing of public procurement contract 6.06. first draft of Memorandum 12.07. final memorandum published, ceremony of signing of the Memorandum 3.10.-18.10. advertising campaign for consumers (TV&radio spots) Negotiations with NGOs, preparations for the official ceremony 17.07. start of the Memorandum signing process through webpage 12.07.2013.-30.06.2014. – administration of applications, euro seminars (~700 participants), regular press releases on amount of subscribers, maintenance of webpage, supervision, reminders for business
LATVIJAS REPUBLIKAS EKONOMIKAS MINISTRIJA MINISTRY OF ECONOMICS OF THE REPUBLIC OF LATVIA 64 Memorandum – preparation and public discussions with NGO’s Legal support – sworn advocate Jānis Jurkāns (“Cers un Jurkāns”) Partners - 8 business associations and organisations: Latvian Chamber of Commerce and Industry Employer`s Confederation of Latvia Association of Commercial Banks of Latvia Latvian Retailers association Latvian Leasing Providers Association Latvian Agricultural Cooperatives Association Latvian Food retailers association Latvian Fuel Traders Association Cooperation with “Latvijas Pasts” un “Lursoft” Preparation of Memorandum
LATVIJAS REPUBLIKAS EKONOMIKAS MINISTRIJA MINISTRY OF ECONOMICS OF THE REPUBLIC OF LATVIA 65 12th July 2013, with participation of high state officials and popular entrepreneurs: Prime minister Mr. V.Dombrovskis Minister of Economics Mr. D.Pavļuts Minister of Finance Mr. A.Vilks 8 business associations ~ 50 entrepreneurs received first stickers Huge interest of mass media Participation at ceremony Press conference and press release Letter of gratitude signed by Minister of Economics and photo for each participant. Ceremony of signing:
LATVIJAS REPUBLIKAS EKONOMIKAS MINISTRIJA MINISTRY OF ECONOMICS OF THE REPUBLIC OF LATVIA 66
LATVIJAS REPUBLIKAS EKONOMIKAS MINISTRIJA MINISTRY OF ECONOMICS OF THE REPUBLIC OF LATVIA 67 The most convenient for every company: Electronic applications - www.godigs.lv ; Possibility to fill in application at offices of partner NGOs in biggest cities of Latvia and Ministry of Economics => paper application; Possibility to sign Memorandum and fill in application during regional seminars and special events; Application form can be sent by email; Application form can be sent by post. Application for Memorandum
LATVIJAS REPUBLIKAS EKONOMIKAS MINISTRIJA MINISTRY OF ECONOMICS OF THE REPUBLIC OF LATVIA 68 Authentication system: Electronic signature, electronic ID or bank account verification – automatic verification if the company is registered and if the person filling application has official signature rights in name of company; Instructions to the user Downloadable entry form Affirmation of participation after application is completed (can be downloaded or printed and used for representative purposes); Most popular application form - 75% of applications received electronically. Electronic application:
LATVIJAS REPUBLIKAS EKONOMIKAS MINISTRIJA MINISTRY OF ECONOMICS OF THE REPUBLIC OF LATVIA 69 List of participants of Memorandum available publicly on project web page; Stickers with official logo for businesses (free of charge) – by post (Latvijas Pasts), at Ministry of Economics, offices of partner organizations (number of stickers according to number of points of sale); Banners and other visual materials to be used online, in cashier receipts, product packaging, stamps etc.; All other initiative-related information on official web- site www.godigs.lv Recognition of participants
LATVIJAS REPUBLIKAS EKONOMIKAS MINISTRIJA MINISTRY OF ECONOMICS OF THE REPUBLIC OF LATVIA 70 Personal invitations to companies and NGOs: ~ 30 000 paper letters sent by post (Latvijas Pasts) ~ 7000 e-mail invitations (Lursoft) ~ invitations for 60 business organisations and associations Regional seminars (5 regional Eurodays, seminars organised by MoF, MoE and Bank of Latvia); Information to 350 delegates of congress of Latvian Association of Local and Regional Governments Regular presentations for industry associations (especially agriculture) Special invitations for enterprises with state owned shares; Advertising of initiative in Post subscription catalogue (300 000 copies); Media campaign for consumers (TV and radio spots) and companies (internet, press). Promoting participation in the initiative
LATVIJAS REPUBLIKAS EKONOMIKAS MINISTRIJA MINISTRY OF ECONOMICS OF THE REPUBLIC OF LATVIA Regional informative seminars 5 cities – as part of informative event “EURO DAY” Close cooperation with partner organisations to invite businesses Cooperation with municipalities Meeting/discussion with high level state officials Sharing business experience Macroeconomic insight Management of change and reputation Practical advice and guidelines for euro changeover
LATVIJAS REPUBLIKAS EKONOMIKAS MINISTRIJA MINISTRY OF ECONOMICS OF THE REPUBLIC OF LATVIA 72 Co-ordinated by Ministry of Finance Part 1. Target audience: business that supplies goods or services to consumers directly or indirectly. September 2013 – October 2013 (print) Part 2. Target audience: consumers – informing about the campaign and its’ identification signs and encouraging consumers to shop at merchants who have joined the memorandum. 2 September – 13 December (print, TV) Advertising campaign
LATVIJAS REPUBLIKAS EKONOMIKAS MINISTRIJA MINISTRY OF ECONOMICS OF THE REPUBLIC OF LATVIA 73 http://www.youtube.com/watch?v=qeKs saEG77U Video:
LATVIJAS REPUBLIKAS EKONOMIKAS MINISTRIJA MINISTRY OF ECONOMICS OF THE REPUBLIC OF LATVIA 74 Media relations Standpoint articles of entrepreneurs and business associations in central and regional media Interviews with participants of initiative in central and regional media Press releases at least once a week (statistics, joined industries, views of entrepreneurs, motivation to participate) Materials for distribution Posters (Latvijas Pasts, supermarket chains, municipality information centres, business incubators, etc.) Brochure (regional seminars, municipalities) Visual materials Video with explanation and advice on using the initiative for improving business reputation Promoting participation in initiative – other supporting activities:
LATVIJAS REPUBLIKAS EKONOMIKAS MINISTRIJA MINISTRY OF ECONOMICS OF THE REPUBLIC OF LATVIA 75 Media attitude – mostly positive/neutral Communication by businesses – partners, employees, media Media interest regarding businesses who have joined the Memorandum, especially in regions More than 160 publications about initiative «Fair Euro Introducer» (until 7th January 2014). Publicity of initiative:
LATVIJAS REPUBLIKAS EKONOMIKAS MINISTRIJA MINISTRY OF ECONOMICS OF THE REPUBLIC OF LATVIA 76
LATVIJAS REPUBLIKAS EKONOMIKAS MINISTRIJA MINISTRY OF ECONOMICS OF THE REPUBLIC OF LATVIA 77 13th March 2014: 1 222 companies, more than 11 000 points of sale
LATVIJAS REPUBLIKAS EKONOMIKAS MINISTRIJA MINISTRY OF ECONOMICS OF THE REPUBLIC OF LATVIA 78 5 biggest retail chains 84 % of banking sector Providers of public utilities Health service providers and pharmacies Important fuel retailers Private persons – performers of commercial activity The Association of Hotels and Restaurants of Latvia (~250 enterprises) Members
LATVIJAS REPUBLIKAS EKONOMIKAS MINISTRIJA MINISTRY OF ECONOMICS OF THE REPUBLIC OF LATVIA 79 What to take into account? The public attitude towards euro (confidence in politics, government, political and economic situation in the country, trust in business ethics and fairness) The media attitude towards the euro The host organizations and professional associations attitude to the subject (it should be formulated in advance); The usual activity (or inactivity) of business participating in self-regulatory activities Practical recommendations (1):
LATVIJAS REPUBLIKAS EKONOMIKAS MINISTRIJA MINISTRY OF ECONOMICS OF THE REPUBLIC OF LATVIA 80 How to organise? Support and participation from business organisations from very beginning Set up high goals for number of participants and the target audience Keep all activities in one organisation – practical implementation, advertising, communication, etc. Ensure high level of coordination of activities PR support crucial to make fair pricing agreement well known and popular Easy and convenient ways for companies to sign the agreement Think on ways how to make signing of agreement alluring for businesses (reputation, «free advertising», special newsletters on euro from government institutions, etc.). Practical recommendations (2):
LATVIJAS REPUBLIKAS EKONOMIKAS MINISTRIJA MINISTRY OF ECONOMICS OF THE REPUBLIC OF LATVIA
Technical preparation: Public awareness and communication working group
Communication WG (established in 2005) - In year 2008 established the web page www.eiro.lv - In year 2010 with colleagues from Belgium's MoF and Central Bank PACWG participates in twinning project, where initial Communication Strategy for the Euro Changeover in Latvia was drafted. The Strategy covers communication messages, focus gropus and three stages are defined: From January 2012 to July 2013 – preparation stage From July 2013 to January 2014 – intensive stage From January 2014 to december 2014 – final stage Communication professionals from all ministries, Parliament, FCMC, Bank of Latvia, Latvian Institute, CRPC, Latvian Post, Latvian Tourism Development Agency, etc. Two sub-groups: for organising regional forums and for work with international media
Goals: • 90% of Latvians feel informed enough for the practical aspects of the implementation of euro • 60% of Latvians support the implementation of euro 90/60
Target audiences • Households – socially and economically active • Tourists • Children and students Socially vulnerable groups • Retirees • People with special needs • People hard to reach • Prisoners • Ethnic minorities • Unemployed persons • Municipalities, the government • Librarians • The employees of the Latvian Post • Bankers • Entrepreneurs and their employees • NGO Public and private sector General audience
A language that everyone understands All over the country Easy to understand Cost- effective - Focus on regions - People living outside urban areas - Prisoners Etc. - Mass media - Direct mail to hoseholds - Places where people are dealing with money: banks, stores, markets etc. - The basic necessities - Partners - Informative materal for visually impaired individuals - Brochure for retirees - Informative material for socially vulnerable individuals - Brochure for tourists – in English u.c.
Common message: EURO. LATVIA GROWS.
Communication: 360°• Media relations and events • Mass media • Social media • Seminars and discussions • www.eiro.lv • Opinion leaders • Information multipliers
Support from European Commision: 360° • Partnership agreement • Communication with vulnerable groups • Exhibition
>30 000 seminar participants Euro working group seminars - In year 2013 245 seminars in 50 cities and villages - 28159 participants in whole Latvia (15 000 inhabitants, 6500 entrepreneurs and 6000 state and local government employees) - Last professional seminar in Riga – 20 December 2013 Webinar - Association of Commercial Banks of Latvia (ACBL) big euro webinar on september 25 with participation of 15 experts in latvian and russian languages – 530 online viewers, more than 4500 offline viewers and amount is increasing. - ACBL and Latvian Chamber of Commerce and Industry organised euro seminar/webinar for entrepreneurs Other seminars - Bank of Latvia, Employers' Confederation of Latvia , MoE seminr cycle in 28 cities with 2200 participants and other seminars
>40 000 participants Event Notes Eurodays - In 5 Eurodays participated more than 10’000 people (Ventspils – 700, Liepāja – 2300, Daugavpils – 1800, Jelgava – 3100, Valmiera – 2200) - In „Fair euro introducer” seminars registered 250 participants (+ 300 online viewers) - Euroday test in all four cities filled 1589 Euroday visitors Euro exhibition - In EC exhibition «Eiro – our currency» Rīga – 2806 visitors, Daugavpils – 6620, Liepāja (open until January 12) – 4000 - ECB/Bank of Latvia euro exhibition in theater «Daile» – more than 16’500 visitors
Materials were distributed in: • seminars, • Eurodays, • euro exhibitions, • media events, • local gov., • associations, • senior associations, • libraries, • society of the blind people, • post offices, • Latvian Railway, • supermarkets, • companies, • electronically ~2 mill. informative materials Informative material Amount Description Household consignment 1252400 Informative brochure to all households which is adjusted to certain region Brochure about security 300000 Security advices in cooperation with the State Police Pensions (broadsheet) 140000 Information about changes in pension payment schedule; security; process of the introduction of euro Europeace guide 120000 Advices to entrepreneurs in cooperation with Association of Commercial Banks of Latvia Stickers with official currency rate 50000 Stickers with official currency rate and informative phone number Stickers «Fair euro introducer» 46000 Sticker with inscription «Fair euro introducer», from both sides Brochure «What trader must know about the dual price display» 18000 Main information and demands regarding dual price display Broadsheets – diplomas for traveling exhibition 15000 Diploma (with commemorative coin) for traveling exhibition Brochure «Important about euro» 15000 Summary of practical information - what is euro; introduction; currency rate; timetable, etc. Equity capital stock (infograf) 11000 How and when to do denomination of equity capital stock Trader’s journal 5000 Journal about practical euro information for entrepreneurs and trades Practical guidelines brochure 4000 Practical guidelines in areas of accounting, tax payment, cash registers, dual price display, costumer rights, etc. Brochure «Competition Council about the cartels and other forbidden deals» 3000 Forbidden deals, action, punishment, how to decrease risks, etc. LV and RUS Brochures «Fair euro introducer» 2000 Information about campaign’s objective, memorandum, gains and how to join Posters "Fair euro introducer" 1000 Poster about gains from participation and information for consumers 10 Euro advices E-version 10 advices, what to do, to ensure transition to euro safe, easy and comfortable Infograf – shopping in lats during first two weeks E-version Shopping during the period of parallel circulation of lats and euro Infograf – be prepared for the introduction of euro on time E-version Timetable, how to prepare for the introduction of euro Brochure for foreign guests 20000 Most important information about the euro introduction in 4 languages Brochure for disabled persons 5000 Most important information about the euro introduction for disabled persons
Eight stories about the euro for children and youth audience • To inform teachers and school children, the Ministry of Education and Science distributed to all schools an information brochure for teachers and produced cartoons to be introduced in the schools’ curricula
Other target materials • Several activities targeted both the visually impaired and the hard of hearing with trainings on the design of the new banknotes and coins, security features and general changeover modalities.
>45 000 www.eiro.lv visitors per month • Info telephone 8000 3000 (1744 calls in October, 2334 calls in November, 2437 calls in December, 4874 call in 1-14 January. Main topics – currency rate, general questions about euro, where to exchange) • www.eiro.lv (during 2013 ½ million visitors) • Weekly euro news page – for media and for eiro related institutions (1200 receivers) • email@example.com – more than 700 questions from homepage with replies provided within 24 hours 37% of people named eiro.lv as a source of information (Factum, 11.2013)
>1,521,634,000 audience abroad • Latvia’s Euro changeover at New Year’s eve was broadcast by 52 accredited journalists from 31 foreign media (Europe, Asia, North America). TV – 12, news agencies – 9, photo news agencies – 5, radio – 3, newspapers + online editions – 9 • 156 registered publications • Media coverage (not including news agencies) – more than 1,5 billion people • Neutral publicity. French and Swedish media highlighted the low inhabitants support, other countries media – Latvia’s incredible ability to overcome economic crisis
>67 000 followers in social media • Social networks: • Facebook – 1228 followers • Twitter – 1784 followers (theoretically tweets reach 407 200 users, one tweet – 2887 users) • Draugiem.lv – 65 674 followers (8th place in page top) • Additional activities • Coin guessing game • Cash changover network map • Searching for Latvian maiden photo competition • Euro calendar aplication
Public attitude - Newest EC sociological research center's «Eurobarometer» survey (published on 20 December): In Latvia 53% support euro (average support level in EU is 52%). Support since survey in summer has increased by 10 % points. - A large majority of Latvians (79%) perceived the changeover as smooth and efficient («Eurobarometer» 16-18 January). - TNS in January (Swedbank survey): - around 66% of Latvian inhabitants and 64% of entrepreneurs confirm that the changeover process was convenient; - the mass media was the main information source for the euro introduction for 85% of Latvian inhabitants and 68% of entrepreneurs.
Public awareness 98% know – on January 1 Latvia will introduce euro 89% feel informed well enough about transition process (Factum, 12.2013) General 1. stage: 19.09. – 02.10. - Latvia’s euro coin’s appearance and origin - Euro date in Latvia - Main sources of information 2. stage: 21.10. – 15.12. - Pension and benefit payment order - Money changeover options - Most convenient payment options Faireurointroducer 1. stage: 10.09. – 09.10. - With objective to activate entrepreneurs (signes up 1216 companies with >10000 adresses, Recomended by inhabitants >400 companies 2. stage: 19.09. – 02.10. - With objective to invite inhabitants recomend fair entrepreneurs
Changeover symbiosis State and municipal IT systems Banking sector Retail sector Smooth change- over Inhabitants behaviour
Hints for the changeover night Transition period during the night of 31 December : - technical IT migration processes (numerous preliminary tests were very important) - to draw the atention on usual everyday processes: POS reports, etc. - cash register journals in two currencies (suggestion to use already established examples by the State Revenue Service)
Changeover most intense period and final stages 27.12.2013- 06.01.2013 06.01.2014- 14.01.2014 INTENSIVE SUPERVISION SUPERVISION - Transition period overnight of 31 December: ATM, POS, cash registers, internetbanks, IT systems. Technical risks were minimised as much as possible! - During first two weeks: mutual understanding – please don’t rush, don’t crowd and don’t be angry! Two currency parallel circulation. Additional work for sellers and attention for costumers 14.01.2014- 01.08.2014 - In February final public survey. - Until 04.2014 info telephone line continues working. Seminars about accounting and redenomination of equity capital stock issues on 19 February 01.08.2014- 31.12.2014 - Until the end of 2014 price monitoring will be continued. - Benefit management. Worries of undue price inflation. To evaluate euro introduction influence on inflation that was negligible in other countries
Transition period of two weeks of dual circulation: 1 – 14 January • ATM cash withdrawals at the level of usual average (~100 euro). • Citizens used card payments 20-30% more to make the process smooth and easy.
Euro changeover facilitated the changes in financial services habits Source: TNS, 18 February (Swedbank survey) • 74% inhabitants highly evaluated internetbanking priorities • 67% inhabitants will use more payment cards • 61% inhabitants will keep more money at banks' accounts
Key success points: • Project planning • Learning from other countries experience • Team spirit and numerous open discussions • Strong communication partners (procurement procedure to choose the best partner)
Media Merchants: cash registers, price display, etc.Communica- tors Banks Inhabitants: librarians, info centers Accounting and taxes Risks assessment Professional expert grouping IT registry Municipalities
Thank You for Your attention and cooperation!
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