OREANDA-NEWS. October 01, 2014. With less than a quarter remaining until the euro adoption, residents are becoming increasingly more interested in the changeover to the new currency – 82 % of the country’s residents have already started preparing for the euro adoption.

In the business sector preparations for the introduction of the euro are even more intensive – 9 out of 10 companies are preparing for that. In fact, preparations of companies are still mainly related to the planning of preparatory actions, rather than their implementation.

Such data are revealed by the Lithuanian’s Euro Readiness Index calculated for the second time by Swedbank and TNS LT at the beginning of August, which summarises the level of awareness among the country’s residents and companies of the euro adoption, their attitude and actual or planned activities of preparations for the euro. In February – August, the Euro Readiness Index of the Lithuanian companies increased from 46 to 55 points (out of maximum 100 points), the index of residents went up from 30 to 41 points.

The largest growth was observed in the part of index related to awareness of residents and companies. 66 % of people consider that they are satisfactorily or well-informed about the euro (in February, such opinion was expressed by 42 % of respondents); their opinion is also shared by 86 % of the surveyed representatives of companies (in February – 62 %). Better awareness also resulted in higher acceptance of the euro: the share of residents positively rating the new currency accounts for 35 % and of companies – is twice as large (71 %).

The main preparations of business will start in autumn

The bigger part (91 %) of surveyed companies responded that they were carrying out at least one of the activities of the preparation for the euro specified in the index. But in August, likewise in February, their readiness index was lower because preparatory actions of business were mostly at the stage of planning.

Almost half (47 %) of the country’s companies are envisaging changes in their accounting programme, 35 % are planning to adapt their IT system, and one-third (32 %) of businesses – to inform customers about changes in prices and other changes during the currency changeover period. A little smaller share (29 %) of companies is planning to renew their cash registers. Changes in the accounting programme are already being introduced only by one-fifth (19 %) of respondents, 18 % have started adapting IT systems for the euro, and 17 % of companies are organising training for their employees.

In August, the readiness of the Lithuanian business for the new currency was similar to that in Latvia, while the Euro Readiness Index of companies during the respective period last year stood at 54 points.

“Apparently, companies of our country are following the Latvian example: their actual preparations will start only in the last quarter of the year. However, by leaving the main tasks for the eve of the euro adoption, companies risk to encounter inconveniences and, possibly, higher costs. At the end of the year providers of IT programme and cash register maintenance and other services will be especially busy and may not be able to timely update the systems of all customers”, – says Dainius Vilcinskas, Head of Corporate Banking at Swedbank in Lithuania.

According to him, retail and service business also should not postpone and take care already now to supply themselves with sufficient amounts of euro cash: it will not be possible to return to circulation the litas received from residents, and the change will have to be given in the new currency. At that time the need for change might even triple, because people will take the opportunity to exchange litas banknotes of larger denominations at the points of sale. “We recommend for companies to calculate the required amount of euro already now and take care of their delivery, keeping and collection. Our recommendation for entrepreneurs is to supply themselves with the amount of euro cash that would be enough at least for one week considering their turnover, size of the point of sale, flows of customers and higher demand for cash necessary for giving change”, – emphasises D. Vilcinskas.

Residents show interest in the euro, but do not change their habits
In August, the Euro Readiness Index of the Lithuanian residents (41 points) outpaced the previous year’s index of Latvia of the same period (34 points). This shows that Lithuanian residents have started preparing for the euro earlier.

In August, 82 % of Lithuanians – twice as many as in February – carried out at least one action related to the euro adoption. The major part of these actions was related to the accumulation of practical knowledge. More than half of respondents (61 %) know the rate at which litas will be exchanged into euro. As much as 37 % already know where and when it will be possible to exchange litas into the new currency free of charge, and 24 % of respondents know the main dates of the exchange of litas into euro.

After euro adoption, the largest number of problems will be related to cash held by residents – many people will want to exchange their cash, therefore there might be large queues in banks. Nevertheless, only 17 % of residents are trying not to accumulate larger amounts of litas cash.

“In our country we still have more than 10 billion of litas cash, the bigger part of which is held by residents. If in the beginning of January all of them would want to exchange litas into euro at bank branches, it will be really very problematic both for banks and people. Therefore, I suggest without waiting for the euro adoption date to deposit cash savings to your account using cash-accepting ATMs, and to spend petty cash. On 1 January, litas held in the accounts will be exchanged into euro free of charge. Additionally, savings in the account will be protected from theft or accidents”, – recommends Orinta Zvirzdine,  Head of Retail Banking at Swedbank in Lithuania.

Preparations will be easier, if calculations are made in euro already now

According to the data of the survey, meanwhile only one-fifth of the surveyed residents have calculated their earnings (wage, pension, scholarship, etc.) in the new currency. About 22 % of respondents sometimes recalculate prices into euro.

“It will not be easy to get used to the new currency at once, therefore I recommend, for example already now when purchasing food stuffs, calculate their prices not only in litas, but also in euro. It is useful to calculate the average amount of euro you usually spend during one shopping in a store, and the amount of money, which is spend wasting. Also, it is worth recalculating the family’s income from litas into euro. In this way you will get used to new prices quicker, avoid spontaneous purchases stimulated by smaller amounts shown on labels and balance your budget after euro adoption”, – recommends O. Zvirzdine.

O. Zvirzdine also notes that it is important for other members of family to start getting used to euro. She suggests warning elderly people about potential cases of fraud and reassuring them that on 1 January litas held in bank accounts and deposits will be automatically recalculated into euro, and therefore they will not have to take care of the exchange of euro. It is also useful acquainting children with the euro in advance, explaining to them how the currency will change, drawing their attention to the dual display of prices, for example, discussing with children the prices of purchases to which they are used displayed in stores in litas and euro. If a child is saving money for a larger purchase, you can discuss with him, how much the desired item will cost in euro and calculate together the amount already saved by the child in euro.