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IP/08/1959

Brussels, 12 December 2008

Eighth report on practical preparations for the euro: final countdown for Slovakia

With less than three weeks to go before the introduction of the euro in Slovakia, preparations are well advanced and the changeover should be a smooth affair. On the 1st of January, Slovakia will be the 16th member of the euro area and its population of nearly 5.4 million will bring to 323 million the number of people in the European Union who share the common currency.

The Commission today adopted its eight 'Report on the practical preparations for the enlargement of the euro area'. The report focuses on Slovakia, which next January will become the 16th European Union country to adopt the common currency.

"I am looking forward to welcoming Slovakia in the euro area next January. The country has made noticeable progress in the last months to speed up the preparations, inform the public about the euro and reassure them that their concerns about price increases are taken seriously. I am confident everything will go well and I call on Slovakia to pursue the stable and sound budgetary and macro-economic policies that will enable it to take full advantage of the euro", said Joaquín Almunia, European Commissioner for Economic and Monetary Affairs.

Since Slovakia gained the formal approval for the euro from EU finance ministers, in early July (see IP/08/1113), the practical preparations moved into high gear.

A total of 500 million euro coins have been produced by the national Mint of Kremnica, in central Slovakia. The banknotes were borrowed from the National Central Bank of Austria, in line with the used practice of the recent changeovers.

The National Bank of Slovakia began distributing the coins and banknotes to commercial banks in September 2008 and retailers and other businesses got their first deliveries at the beginning of November. In total, some 13,330 businesses have signed contracts with their bank for advance supplies of euro cash. Shops are expected to handle euros from the 1st of January and to give change exclusively in the single currency to speed up the changeover and reduce the cost of having to handle two currencies simultaneously.

Keen to feel their first euros, Slovaks were quick to snap the 1.2 million coin mini-kits made available from the beginning of December for a unit price of 500 Slovak korunas (€ 16.60 at the official conversion rate of 30.1260 Slovak korunas for €1). Almost 90% of the mini-kits (containing 45 coins with the Slovak national sides) were sold in the first five days. A number of commercial banks have announced they will also provide for the exchange of SKK cash against euro without fees in the last weeks of the year. Furthermore, and as in previous changeovers, the banks plan for longer opening hours in the first days of January and some branches will open special counters for businesses and reinforce the staff in contact with public.

In order to address consumers' fears of price increases around the changeover, Slovakia implemented a whole set of measures from an 'Ethical (price) Code' logo, which bounds adherents to respect the rules. Some 16,000 shops, service providers' outlets, local and regional administrative bodies have adhered to the initiative. Compulsory display of prices in both koruna and euro started on 24 August and will last until 1 January 2010. Compliance is carefully monitored by the Slovak Trade Inspection (STI) and the shortcomings identified so far have generally been corrected diligently and complaints dealt with. The controls of the STI are complemented by a price monitoring scheme by the Association of Slovak Consumers.

The information campaign on the euro is in full swing with television spots focussing on practical aspects from the conversion rate to the cash changeover modalities, the 'Ethical Code' and de-hoarding of cash. A 'Euromobile' cruises Slovakia providing information to vulnerable groups and to citizens in rural areas. An event marking 100 days to euro was organised simultaneously in 8 regional capitals and attended by some 35,000 people.

The information campaign is bearing fruit. Around 80% of citizens feel rather well or very well informed about the changeover, according to a Eurobarometer survey carried out in November. The fear of price increases has receded by 11 percentage points compared with the spring, but remains high at 65%, which shows that the efforts must continue and the authorities stay on the lookout.

The Commission will continue to follow carefully the final practical preparations and the changeover and will report regularly to the public.

Background

In May 2008, the Commission concluded that Slovakia met the criteria for the euro. Cyprus and Malta were the latest to join the euro area, in 2008. This is the eighth report on the practical preparations for the introduction euro since the big 2004 EU enlargement of the EU. Slovenia was the first amongst the new members to adopt it in 2007.

A staff working document attached to the report looks at the state of preparations in the other Member States with a 'derogation' (all outside except UK and Denmark). Since the publication of the last report, Hungary drafted its first version of the National Changeover Plan and Poland published a Roadmap for Euro Adoption providing for an indicative timetable of the country's preparations for euro adoption.

For the report and the staff working document see:

http://ec.europa.eu/economy_finance/thematic_articles/article13510_en.htm

For the survey on the introduction of the euro in Slovakia (Flash Eurobarometer 249) see:

http://ec.europa.eu/economy_finance/publications/publication_summary13380_en.htm


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