IMPLEMENTATION OF EURO

IN SLOVENIAN

MUNICIPALITIES

VILMA MILUNOVIČ

SKUPNOST OBČIN SLOVENIJE

INTROCUTION OF THE PRESENTATION

• the master plan for the euro changeover in Slovenia

• Euro implementation in slovenian municipalities

• key elements of successful implementation

THE MASTER PLAN FOR THE INRTODUCTION OF THE EURO

• the prudent introduction program

• informing the public

• setting the legal framework

THE LEGAL FRAMEWORK

• the adoption of the umbrella law– the euro adoption act

• supporting regulations– the act on the dual display of prices

• other regulation adjustments– the payment system– the accounting system

• changes in the system of public administration on the local level

BASIC PRESUMPTIONS

• the fixed rate of conversion 1€ = 239,640 SIT • the principle of the continuity of contracts (EC regulation 1103/97)• reference interest rate : SITIBOR was replaced with

EURIBOR• the exchange rate of Bank of Slovenia was replaced

by the reference exchange rate of the European Central Bank

• the values shall be rounded on two decimals

THE BIG BANG

• simultaneous introduction of the cash and book money with a short period of dual circulation

– up till to the 9.pm of 31. December the bank cash-points operated in tolar

– 3 hours of system break down: from 9.pm to 0.00 the cash-points were shut down

– from 0.00 hours of 1. January cash-points start to operate in euro currency

– the dual circulation period lasted for 14 days

THE IMAPACT ON ACCOUNTING SYSTEM

• all the records in bookkeeping for the year 2006 are closed in tolars

• annual reports and financial statements for the year 2006 are draw up in the old currency (tolar)

• all data up to 31. December 2006 are stored in tolars • no conversion of financial statements for the

previous year is to be done officially• the opening accounts and analytical records are

converted in euro using the official conversion rate• from the 1. January 2007 all accounting activities and

financial statements are in euro currency

PAYMENT SYSTEM

• banks, shops, companies, public administration officies had to adapte their payment transactions

• consumers: the dual pricing rests till the 30. June 2007

• new paying instruments, money orders,....are prescribed

• invoices issued until 31. December 2006 were nominated in tolar but after 1. January are paid in euro

• tax statements, withholding tax statements calculated in tolar are paid in euro after the 1. January 2007

CASH DESK OPERATING • euro cash requirements: assure in time the sufficient

store of petty and hard cash for the first working days

• introduce the use of POS terminals as much as possible

• security measures: to avoid the abuse and falsification of euro bank notes

• put conversion table explaining and informing the conversion of fines, administrative fees and charges for public services on visible places in office

ADJUSTMENT OF INFORAMATION SYSTEMS

• prepare the chart of the all necessary changes on the key areas of responsibility

• check off all software programs and information system

• set time limits for adjustments of the information system for the changeover on euro

• test the changes introduced in the system

• don’t forget: training of the staff for the use of new applications in euro has to be done

BUDGET PROCESS IMPLICATIONS

• we prepare the budget proposal in the uniform information application at the state level

• the preparation of the budget proposal for the 2007 was prepared in tolar

• the final budget proposal was adopted in euro,• ... by rounding the amounts some minor

differences come out in adopted budget accounts!

PUBLIC TARIFFS, FINES...

• all ladders, tariffs of taxes or fines defined in decrets and other regulations remained unchanged

• this amounts are converted in € using the official rate of conversion rounded off to two decimal points

• administrative stamps remained in use and were replaced in the time of two months with the new issue denominated in €

• as adopting changes or new laws after the 1. January 2007 tolar is replaced with euro wherever necessary

INFLUENCE AREAS OF MUNICIPAL OPERATION

• direct day to day working operations in municipal administration

• relations with citizens /customers• relations with business partners

OPERATIONAL ISSUES

• the support of institutional system to municipalities

• the problem of rounding• unjustified rise of prices• the new “euro-value” framework in

our heads