Slovakia The Special Guest At Euro Birthday Party

[Arizona Coin Collector]

FROM:
http://www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20081229/ACQDJON200812292234DOWJONESDJONLINE000390.htm&&mypage=newsheadlines&title=Slovakia%20The%20Special%20Guest%20At%20Euro%20Birthday%20Party

Slovakia The Special Guest At Euro Birthday Party

BRATISLAVA, Slovakia (AFP)--Slovakia will mark the 10th
anniversary of the euro Thursday by becoming the 16th
member, seeking shelter from the international economic
storm that could yet throw more nations into the arms
of the European Union's single currency.

Some Slovakians still have doubts about giving up their
koruna, fearing a lack of control over their destiny.
But Robert Fico, the Social Democrat prime minister,
is confident.

"The whole Europe congratulates us on choosing the
best possible time to join the eurozone," Fico said
this week.

"We are very lucky at this unlucky time of a financial
and economic crisis that the currency switch comes in
the year in which the crisis is expected to have the
biggest impact."

Slovak cash machines will start dispensing euros at
midnight Jan. 1.

For two weeks korunas will remain in use alongside the
euro - at a rate of 30.13 korunas to the euro - but all
change will be in the new bank notes, and coins
featuring the Slovak cross, Bratislava castle and Mount
Krivan.

The koruna, which has been in use since the Czech
Republic and Slovakia split in 1993, will be withdrawn
from Jan. 16.

The European Commission is predicting a smooth switch
for the 5.4 million Slovaks who been on the receiving
end of six months of TV spots, printed advertisements,
a song contest - and a special theater show for the
country's large Roma minority - to prepare for the euro.

The National Bank of Slovakia, or NBS, and commercial
banks will open specially on Thursday and the weekend.
Extra staff are being brought in.

The central bank estimates that 188 million euro notes
and 500 million coins will be needed to replace koruna
cash in circulation and reserves.

Public opinion polls show usually cautious Slovaks
welcome the switch, with about 58% in favor and 35%
opposed.

The fear of price increases remains a serious concern
for almost 65% of citizens.

"It will be tough for me to get used to the euro because
the conversion calculations are difficult and I don't
think it's good for Slovakia either. I believe that we
were more independent with our own currency," said
75-year-old Maria Matuskova.

Flight attendant Barbara Krajcovicova, 24, is looking
forward to not having to go to exchange bureau. "But I
believe that prices will go up as they did in every
country that has adopted the euro."

Inflation, though slowing to an annual rate of 4.9% in
November, remains the biggest concern for the
left-leaning government.

The Slovak energy regulatory authority has ordered a
price freeze for natural gas and water for households,
and is allowing only an 0.11% increase for electricity.

Slovakia, which leans on the car and electronics
industries, has resisted the global crisis well and
ranks among the E.U.'s fastest-growing economies with
7% growth in the third quarter and an estimate topping
4% for 2009.

There is a growing feel-good factor around the currency
as it marks the key anniversary.

The euro could surpass the dollar in global importance
within five years, most Europeans feel, according to a
survey released this week by the Financial Times and
Harris institute.

With Slovakia, the eurozone will cover about 330 million
people. Since its launch on Jan. 1, 1999, the euro's
position as a reserve currency has grown from 18% to
27%, and the value of euros in circulation now surpasses
the dollar.

Slovakia was approved for euro entry in May 2008 after
comfortably meeting the Maastricht criteria on budget
deficits, government debt and other criteria.

Other European countries like Denmark and Sweden, which
initially spurned the euro, are now wondering whether
they made the right choice.

But several nations are expected to struggle to stay
within the Maastricht rules.

Bank of America economist Gilles Moec expects up to
eight more countries to join over the next decade.

But the huge government spending need to battle the
economic crisis has many experts worrying that the
euro will also face major strains.