Adoption of the Euro in Slovakia: Preliminaries, Advantages and Risks
Adoption of the Euro in Slovakia: Preliminaries, Advantages and Risks

Summary/Abstract: The rapid economic developments of recent ears have enabled Slovakia to fairly easily meet the Maastricht criteria necessary for the introduction of the common European currency. Parallel with achieving compliance with the conditions on nominal convergence, major advances have also been made in the field of real convergence: the level of development of the Slovak economy is approaching the EU average at a rapid pace. This spectacular catching-up process has been driven by the comprehensive structural reform process implemented under the second term of the former Dzurinda administration, between 2002 and 2006. Up to the middle of 2008, the structure of growth in Slovakia could be qualified as healthy, and accompanied by improving external and internal balance indicators. The adoption of the euro from 2009 could help to keep the economy on a course of balanced convergence. Being a country that is highly integrated into the internal market of the EU, Slovakia will mainly obtain significant benefits through the elimination of transaction costs and exchange rates (against the euro). The most important potential threat, meanwhile, is the issue of how to control inflation.[...]

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