Nearly half of Estonian kroons was automatically converted into euros - association

Photo: Elmo Riig / Sakala

Around 70 million euros' worth of Estonian kroons, approximately half of the sum in private hands, was in response to the Banking Association's appeal deposited in bank accounts just before the changeover to the euro and converted into euros automatically, managing director of the Estonian Banking Association Katrin Talihärm told BNS.

"So as to reduce the workload of banks, we advised customers to avoid the inconvenient cash exchange and deposit the money in their bank accounts where the change of currency occurred automatically," Talihärm recalled.

"People heeded the appeal and deposited approximately 70 million euros' worth of cash in their accounts in the final months of the year [2010], an equal sum was exchanged for euros during December. Thus we can say that nearly a half of the kroon cash in private hands had been exchanged for euros even before the euro adoption or was converted into euros in bank accounts," she said.

A special campaign got started in October 2010 to collect the close to 1,000 tons of kroon coins in circulation. Simultaneously a campaign calling on people to donate kroon coins to the charitable Food Bank was launched. "The Food Bank campaign was important regardless of the fact that the action did not result in large amounts of coins because it drew people's attention to the need to exchange banknotes and bring back coins already before the beginning of the official exchange period and thereby diffused the workload of bank offices," Talihärm said.

A communication campaign initiated jointly with state institutions and the central bank prompting businesses to start adaptation of their cash and information systems as early as possible was also a success in Talihärm's opinion.

A big ordeal for the public sector was the payment of pensions on Jan. 5, 2011. As pensions are as a rule transferred into bank accounts in Estonia, any problems would have entailed a huge burden for banks.

In Talihärm's judgement, the biggest logistics challenges were replacing kroons with euros in automatic teller machines and supplying bank offices with euro cash. "Although the weather, which was considered the biggest risk factor for cash transport, was snowy the transport schedules were mostly observed and within 30 hours 804 ATMs or 93 percent of the total number were stocked with euros," she observed.

On the whole the euro changeover communication can be regarded as a success, Talihärm said. In the first days of 2011 customers took the transition to the euro quite calmly, bank offices were open and there were no long waiting lines due to the currency exchange.