The logic-free euro discourse

A LACK of insight isn't stopping politicians from jumping feet first into the debate on the euro. Euro talk is trendy with the nearing of January 2009, when Slovakia hopes the gates of the Eurozone will fly open.

A LACK of insight isn't stopping politicians from jumping feet first into the debate on the euro. Euro talk is trendy with the nearing of January 2009, when Slovakia hopes the gates of the Eurozone will fly open.

These are the same politicians who a couple of years ago had nothing to say about the country's euro adoption plans (they either didn't care about it or didn't consider it a topic popular with their supporters). But as the country has started down the homestretch, suddenly they're talking heads on the subject.

While an open discourse is crucial for the country, self-serving sound bites that massage the speaker's ego and appeal to party sympathizers can rattle markets and confuse the international community.

And yet Slovak politicians continue to underestimate the weight of their words and the responsibility that comes along with each statement they make.

The most egregious offender along these lines is Ján Slota, the boss of the Slovak National Party, who has left almost no arena untarnished by his verbal excesses.

On March 6, Slota issued a surprise statement that euro adoption should be put off in favour of further debate.

"I am completely shocked by the huge recession in the United States," Slota told the TA3 news station. "Sooner or later, it will have an effect on Europe's economy as well. I would like to initiate discussions about this."

Ironically, Slota vented his doubts on the same day that Prime Minister Robert Fico said he would testify at the European Union summit that Slovakia is fully devoted to making the switch.

"The government's interest in adopting the euro is serious and honest," Fico was quoted by the SITA newswire.

Fico was clearly unaware of what his governing coalition partner was about to say.

But within a couple of days, Slota's doubts about the euro had inexplicably evaporated. Suddenly he was saying that his party had always stood for euro adoption and that the only reason he ever doubted it was his feeling of responsibility towards his voters.

About 75 percent of people have serious worries regarding euro adoption, Slota told the SITA newswire.

The reader who can't find any logic in Slota's statements - first wanting to calm his voters' worries and then supporting euro adoption - should stop searching. There isn't any.

What changed Slota's mind? Most probably it was a phone call from Fico, who has been trying to rein in Slota's tongue since getting into a heap of trouble with the Party of European Socialists over Slota's outrageous statements on minorities.

Given Slota's penchant for verbal excess, the public probably doesn's even care about his euro chat. But he is a government representative and his party had been declaring its full support for euro adoption. And the way he dove into the debate did not make his voters any wiser about the risks of the eventual switch.

So far the only relevant political force that has expressed reservations about euro adoption in 2009 is the Christian Democratic Movement (KDH).

In mid January, KDH chairman Pavol Hrušovský said that switching to the euro in 2009 is not mandatory for Slovakia and could be harmful to the economy and a majority of the population, according to the SITA newswire.

The KDH also said that the actual question is not whether to adopt the euro but when. The Christian Democrats say the main risks are the loss of the country's currency and independent monetary policy, which could be a setback for the economy's competitiveness.

These are all legitimate concerns, but the timing is conspicuous, which makes the statements come across as artificial and politically motivated.

Currently, international organisations and foreign investors trust Slovakia because of its plan to enter the Eurozone on January 1, 2009. The proof of this trust is Standard & Poor's confirming of Slovakia's country rating at A/A-1 and revising its outlook from stable to positive on March 3.

The Slovak crown entered the ERMII mechanism for euro adoption in 2005, which has been called a waiting room for the euro. But lingering too long without a specified date of entry, or an unexpected exit from the ERMII, would shake the currency and burden the entire economy.

Slovak companies and organisations were asked to inform the National Bank of Slovakia by the end of February about how much euro cash they are going to need for the first few days after the changeover. Though many businesses have failed to meet the deadline, the country is clearly preparing itself for frontloading the euro.

Also, analysts say that the euro plan is keeping the socially-oriented government restrained in its fiscal policies.

Slovakia will learn in May whether the European Commission is officially inviting it into the Eurozone. While a discussion itself about the date of entry might be justified, bringing it up at a time when deviating from the plan would cause greater losses than benefits is unreasonable, to put it mildly.

With files from Marta Ďurianová.

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