On 10 July 2007, the Council of the European Union approved Malta’s application to join the euro area on 1 January 2008.
On 1 January 2008, the euro became legal tender in Malta, replacing the Maltese lira (MTL) at the irrevocably fixed exchange rate of €1 = MTL 0.429300. The prompt pre-distribution of euro cash to professional third parties prior to 1 January 2008 helped to ensure a smooth cash changeover, alleviate the logistical burden and reduce the costs of dual currency circulation. The pre-distribution of euro banknotes to banks commenced in the first week of November 2007, while that of coins started over a month earlier in late September 2007. Some of this cash was then pre-distributed to retailers and other companies (“sub-frontloading”). In addition, credit institutions and other authorised distributors started selling euro coin starter kits to retailers and other companies on 1 December 2007 and mini kits to the public on 10 December 2007. (The pre-distribution of euro banknotes and coins is regulated by ECB Guideline ECB/2006/9.)
The euro changeover progressed smoothly and quickly.
From 1 February 2008, only euro banknotes and coins can be used for cash payments in Malta, but credit institutions will exchange Maltese liri at the fixed conversion rate until 31 March 2008. This service will be free of charge for bank customers; non-customers will only be able to change up to MTL 250 per person. The Central Bank of Malta will continue to exchange Maltese lira banknotes for ten years and coins for two years after they cease to be legal tender.