A DECADE after European Union leaders made their historic decision to launch the single European currency, Slovakia has been given the green light to become the 16th EU member of the eurozone. After joining the European Union in 2004 and entering the Schengen passport-free travel zone in 2007, Slovakia is now the first of the Visegrad Four countries to pass the last significant milestone on the way to fully membership of the European family.
The European Commission’s (EC) ‘yes’ to Slovak euro-membership, which had been anticipated since the release of its spring economic forecast for 2008 and 2009, will fuel further economic growth, both Slovak state officials and market watchers agreed. Prime Minister Robert Fico was quick to stress that he sees the EC’s approval as an expression of trust in his government.
The EC stressed that Slovakia will now have to speed up practical preparations for a smooth changeover while carefully watching its inflation and fiscal policies.
On May 7, the European Commission, after releasing its regular Convergence Report on Euro Readiness, said that Slovakia meets the criteria for adopting the euro and made a proposal to the EU Council to this effect, according to an official media release. The report found that nine other countries aspiring to adopt the euro were making progress but said they did not yet meet all the conditions for euro adoption.
EU Council finance ministers will make the final decision on Slovakia’s adoption of the euro in July, after the European Parliament has given its opinion and EU leaders have discussed the country’s accession to the eurozone at their June summit, the EC wrote.
“Slovakia has achieved a high degree of sustainable economic convergence and is ready to adopt the euro on 1 January 2009,” said Joaquín Almunia, the EU Commissioner for Economic and Monetary Affairs, on May 7. “However, to ensure that the adoption of the euro is a success, Slovakia must pursue its efforts to maintain a low-inflation environment, be more ambitious with regard to budgetary consolidation and strengthen its competitiveness position.”
Prime Minister Fico said that the euro is an historic chance for Slovakia. Fico is convinced that 2009 is the best year for the country to enter the eurozone.
The adoption of the euro is a continuation of Slovakia’s success story, Fico told media at a press conference at the EC representation in Slovakia in response to the release of the EC convergence report.
“The recommendation is an appreciation of the good economic and financial policies,” said Fico. “We are convinced that the EC report is also an expression of trust towards Slovakia and its government.”
The governor of the National Bank of Slovakia (NBS), Ivan Šramko, said that the EC decision will undoubtedly have an impact on the future development of the country’s economy.
“Slovakia has made the last step towards a full-value integration of the country into the European Union,” Finance Minister Ján Počiatek told the media, adding that the process was extremely demanding and required immense effort on the part of the government.
Počiatek restated that the euro is likely to bring more advantages than disadvantages to the country.
The Slovak crown has been part of the European Exchange Rate Mechanism (ERM) II since 28 November 2005 and, according to the commission, the crown has not experienced severe tensions, and the reasons for its strengthening value against the euro are sound.