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EDITORIAL

Applause for the new currency fades as the gas runs out

CUSTOMERS carefully inspected each of the coins before placing them into the palms of the unusually patient salespeople, who in turn encouraged buyers to take their time and count their change twice. Unusually coy customers were more ready to forgive the slowness of cashiers and even of the inevitable mistakes. A snapshot of the first couple days of Slovakia’s switch to its new euro currency.

CUSTOMERS carefully inspected each of the coins before placing them into the palms of the unusually patient salespeople, who in turn encouraged buyers to take their time and count their change twice. Unusually coy customers were more ready to forgive the slowness of cashiers and even of the inevitable mistakes. A snapshot of the first couple days of Slovakia’s switch to its new euro currency.

Seven days after the euro became Slovakia’s official currency, three-quarters of the country’s citizens had euro banknotes in their pockets while over 80 percent had euro coins, according to a European Commission survey released on January 8.

The largest cash-switching project Slovakia has experienced has gone smoothly, avoiding any mass panic or major hurdles.

Bankers, businesses and politicians jointly hope that the euro, which Prime Minister Robert Fico has called “a talisman”, will somehow shield the country from the worst of the global economic crisis.

State officials made their speeches, reaping glory for the achievement while conveniently overlooking the contribution of their predecessors, some of whom could fairly claim an equal, if not greater, role in the country’s success adopting the euro.

The fact that Slovakia became the first Visegrad 4 country to adopt the euro contributed to Slovak Finance Minister Ján Počiatek’s selection as European Finance Minister of the Year by a British financial magazine, The Banker; news which undoubtedly shocked more than a few.

Though the prize was clearly given in appreciation of the country’s success in fulfilling the Maastricht criteria, a process overseen by Počiatek’s ministry, it comes only a few months after the minister’s infamous appearance on the yacht of a Slovak financial group in Monaco just before the Slovak crown's central parity rate against the euro was revalued in late May 2008.

The opposition voiced suspicion that there was an information leak concerning the revaluation of the central parity which had allowed private financiers to reap significant profits from trading in Slovak crowns just prior to the change. Though the central bank concluded last year that there was no evidence of such an information leak, the yachting scandal left something of a stain on Počiatek’s ministerial suit.

But now the gas tug-of-war between Ukraine and Russia has somewhat overshadowed both Počiatek’s fame and the significance of the euro-switch.

Russia cutting off several European countries from their contracted gas supplies has caused a even bigger headache for some large businesses than the switch to the euro, for which they had been preparing for several months.

The gas calamity, by contrast, has caught them unprepared.

Several industrial giants have already been forced to limit or even halt their production since the state announced a state of emergency for gas consumption.

It need not have come as quite such a surprise had people recalled early 2006, an earlier occasion on which pressure in the gas pipeline dropped during a Russian-Ukrainian gas row. Supplies fell by 30 percent on January 2, 2006, but returned to normal levels the following day.

At that time the Economy Ministry comforted the public by suggesting that Russian-Slovak relations had rarely been as good as they then were and that Slovakia had no serious reason to worry.

The prime minister of a completely different Slovak government in 2009, Robert Fico, came out with a remarkably similar assurance this time round.

“We see this ritual every year, as far as the conflict between Russia and Ukraine over prices is concerned,” Fico said on January 7, as quoted by the TASR newswire. “We have no reason to be nervous. We are only waiting for a definitive solution of this commercial-political conflict between two countries.”

Perhaps, instead of waiting for what Fico calls a “definitive solution of a commercial-political conflict” and relying entirely on those declared “good relations”, the country should deal more seriously with its energy dependence on Russia.

There have been other warnings. Back in October 2005, Slovakia officially requested that the Russian Federation not reduce oil supplies to Slovakia.

It was a reaction to news that Russia planned to export 40 percent less oil than it was contractually obliged to supply.

It is unlikely that Moscow will change its habit of using its oil and gas reserves for political purposes.

Nonetheless, Slovakia is not alone in being affected since other European Union member states also face the Herculean task of trimming their energy dependence on Russia.

Perhaps people freezing in their apartments in Bulgaria will finally make EU leaders to turn energy and environment issues into an actual - rather than a declared - priority.


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