RE: PM says euro will be adopted in 2009 as planned, Flash News Briefs, July 14 - 21
This is typically a case where the destination is in fact the journey itself. If Slovakia deviates from the planned introduction date now, the crown will be reclassified from a "run up to the euro currency" to a "third-rate currency". That could mean that, among other things, the central bank might see its foreign reserves depleted, and that which the new government wants to give back to the average person would be taken away again, if not more, by a higher cost for anything wholly or partially imported.
If the reduced VAT rate of 5 percent is limited to fresh produce, common bread, milk, flour, sugar and whole chicken, and if the other measures do not extend beyond the scrapping of waiting room fees at hospitals and higher taxes for banks and utilities, there might be a fair chance of introducing the euro come 2009.
That being said, the interest rate is rather a problem, because even at 4.5 percent, it will be the same as the current inflation rate. If one takes into consideration that interest on savings accounts is lower than the official rate, and taxed, Slovaks will not be able to stay in the black.
I wonder what kind of odds a professional bookmaker would offer for betting on whether there is going to the euro on January 1, 2009 in Slovakia.
Oscar,
Radošovce
