In particular, more effort is required to ensure that domestic inputs are priced competitively, and hence the need for continued wage moderation; to raise productivity levels; and to ensure faster progress towards key Lisbon Agenda objectives such as educational attainment and innovation. Measures aimed at strengthening the economy’s physical infrastructure and the quality of its human capital, a more efficient delivery of support services by the public and private sectors, and enhanced competition both in product and resource markets are crucial in this regard. This is the only way to increase the economy’s capacity to  2  BIS Review 77/2007  respond flexibly and competitively to new challenges and opportunities, and thus derive the full benefits of EMU. A high level of economic convergence and flexibility, however, are not sufficient for a successful transition to the euro. This also requires both careful logistical planning and public acceptance of the single currency. As for the former, the necessary structures have been in place for two years and they seem to be working well. At the apex stands the National Euro Changeover Committee (NECC), which has drawn up a national Master Plan. The Central Bank of Malta is represented on the Steering Committee which oversees the work of the NECC, it participates in the financial sector committee of the NECC and it is also present on a task force responsible for co-ordinating national training activities related to the euro.
These findings suggest the need for a communications campaign that gives the issue of inflation perceptions priority attention, as well as for effective price monitoring mechanisms. Measures are being taken on both fronts. Inflation perceptions are being addressed in TV slots, newspaper articles and official statements. These messages will be intensified in the coming months. As far as pricing abuses are concerned, the national euro Master Plan has invited businesses to adopt dual display from January 2007 and makes it mandatory from the day the irrevocable conversion rate is fixed until the end of June 2008. The dual display of prices has gained momentum since the introduction of the Fair-pricing Agreements in Retailing (FAIR) initiative towards the end of last year as a voluntary, self-regulating mechanism whereby businesses commit to refrain from increasing prices simply as a result of the changeover. They, in turn, benefit from nationwide publicity recognising their commitment to adopt a code of conduct. 5 In addition, consumers are constantly encouraged to use the national telephone helpline not only to seek information, but also to report cases of suspected noncompliance with the guidelines. With the assistance of international experts, including the Austrian Price Commission, a Euro Observatory has also been set-up to monitor and analyse pricing trends during the changeover period. The unit is supported by 70 Euro Assistants who carry out fieldwork in towns and villages across the island.