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Changeover to the euro Estonia got the final and formal go ahead for joining the eurozone as ECOFIN – EU's Economic and Financial Affairs Council met Tuesday July 13th, 2010. Composed of the Economics and Finance Ministers of the 27 EU Member States, ECOFIN's decision was the last in a long decision process that have been ongoing throughout the first half of 2010.

The euro will now become the legal tender in Estonia as per January 1st, 2011.

Full information on the adoption of the euro in Estonia is available online at the Euroweb portal (http://euro.eesti.ee).

e-focus has now taken a first look at some of the practicalities connected to Estonia's changeover process to euro, covering the following areas (actuality as per 13.07.2010):
  • The Main Principles of the Changeover
  • Cash exchange
  • Conversion of bank accounts
  • 1 EUR = 15,6466 EEK – rounding rules
  • The Dual Circulation Period
  • Euro cash
Additional areas of interest for businesses in connection with the changeover – e.g. accounting, auditing, annual reports, the public sector, taxation – will be covered during the coming autumn as parts of SCCE's 2010 series of meetings, conferences and seminars on the economic environment headlined Here we are. What's next?

The Main Principles of the Changeover
  • Introduction of the euro as account currency, as well as in accounting and contractual relations, is performed as a "big bang", i.e. without any Transitional Period (the period from the start of full membership in the Economic and Monetary Union to the moment when the national currency is no longer in use in accounting, contractual relations or as account currency).

  • A two-week Dual Circulation Period (the period when kroon cash and euro cash are in circulation as equal legal tenders) is applied starting from the €-Day (January 1st, 2011); both euro and kroons are accepted in shops, change is normally given in euro. After the dual circulation period, the euro will become the sole legal tender in Estonia.

  • Credit institutions are obliged to change kroons into euro during six months following the €-Day (until June 30th, 2011) at the central exchange rate and without charging service fee at all bank offices providing cash services. Banks also intend to provide exchange at the central exchange rate and without service fee within one month prior to the €-Day (i.e. during December 2010). From July 1st, 2011 (i.e. 6 months after the €-Day) to the end of the year 2011, credit institutions will exchange kroons to euro within a limited network of branch offices.

  • Six months before and after the €-Day (July 1st, 2010 – June 30th, 2011), retailers are required to display prices at points of sale in both kroons and euro.

  • "In order to set a good example to the private sector", the kroon rates of taxes, state fees, environmental charges and benefits specified in laws and regulations are rounded into euro in a more favorable direction for the public.

  • Expenses related to the changeover are normally borne by market participants themselves.
Cash exchange There are three ways to obtain euro cash: from bank offices, automated teller machines (ATM's), and retailers. The kroon cash will be withdrawn through bank offices and retailers. In regions where there are no bank offices or ATM's, Eesti Post (Estonian Post) may also be involved in cash distribution.

Retailers
Kroon payments can be made within two weeks as of the €-day (January 1st - 14th, 2011). During this period of dual circulation, cash payments can be made in both the kroon and the euro at all sales and service points. As a rule, change will be given in euros.

Banks
Banks will exchange kroons for euros without a service fee within one year as of the €-day. Thereafter, Eesti Pank will continue to exchange kroons for euros for an unlimited period of time and in unlimited amounts.

Automated teller machines (ATM's)
ATM's are one of the most important channels for putting euros into circulation. Starting from the €-day, as many ATM's as possible will dispense only euro banknotes.

Collecting coins
A separate campaign will be held to collect coins. The purpose of the campaign is to provide people the opportunity to bring their kroon coins to commercial banks before and after the €-day under a simplified procedure.
Conversion of bank accounts Adoption of the euro will not entail any additional obligations for bank customers - commercial banks will handle all formalities. Kroon accounts will be fully and simultaneously converted into euros at the official exchange rate and without service fees.

Starting from the €-day, transfers and card payments will become only euro-based.

Upon conversion of the account money into euros, customers will be shown the final balance of the kroon account, the exchange rate, and the initial balance of the euro account in their bank statements.

Each commercial bank will convert advance and contractual payments into euros itself.

1 EUR = 15,6466 EEK – rounding rules 1. Rounding rules when converting kroons into euro:
If you wish to convert, for example, 264.50 kroons into euro, the following division shall be performed:
264.50 EEK: 15.6466 = 16.90463104 euro.

The result must then be rounded to the nearest cent, taking only the third decimal 16,90463104 into account. If the third decimal is 4 or below, the converted value will be rounded down; in this example, rounding to the nearest cent would therefore yield 16.90 euro.

2. Rounding rules when converting euro into kroons:
Conversion of euro into kroons is performed in a similar manner according to the aforementioned rule, but using multiplication instead of division. Inverse ratio derived from the conversion rate shall not be applied and the conversion rate shall not be rounded or shortened.
If you wish to convert 27 euro into kroons, the following multiplication shall be performed:
27 euro x 15.6466 = 422.4582 kroons = 422.46 kroons. In settlements, the result may be rounded to 422.50 kroons.

The Dual Circulation Period From January 1st, 2011, the euro will function as legal tender in Estonia. However, a Dual Circulation Period is necessary to ensure a smooth changeover.

From January 1st to January 14th, 2011, both euro cash and kroon cash shall be legal tender in Estonia and cash payments may thus be executed in both euro and kroons within these two weeks.

After the expiry of this term, the euro will be the sole legal tender in the Republic of Estonia.

Euro cash Euro bank notes are denominated in 5, 10, 20, 50, 100, 200 and 500 euro. Identical banknotes are in circulation in all Member States of the euro area.

Euro coins are denominated in 1, 2, 5, 10, 20, 50 cents and 1 and 2 euro. The reverse of the coins showing the denomination is common for all Member States whereas the obverse is national and different in each country. Despite different obverses, all coins are legal tender throughout the euro area.

Eesti Pank selected the design of the national side of the Estonian euro coins by way of a public competition. 134 designs were submitted to the competition announced on June 18th, 2004, of which the jury selected the ten best entries. The entry "Hara 2" by Lembit Lõhmus was declared the winner and the design features the outline of Estonia and the word "Eesti".


Source (actuality as per 13.07.2010):
- The Euroweb portal: Estonia's National Changeover Plan

"The Euroweb portal at http://euro.eesti.ee is the main Estonian official information centre of euro communication. The portal continually intermediates the entire information flow related to the changeover to the euro, simultaneously functioning as a channel for distribution of euro-related messages and feedback from the public and providing an internal working environment for the euro communication team. All printed information materials intended for various target groups and other campaign materials are available on the Euroweb. The communication activity is also reported to the public via the network."