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Welcome Slovakia !

Postby sheepshagger » December 31st, 2008, 5:17 pm

Slovakia adopts the euro at midnight tonight, with its people hopeful that membership will insulate them from the worst of the storms battering Europe's emerging economies.

While governments across the region cut growth forecasts and investors dump assets -- wiping out years of gains in other eastern European Union currencies like Poland's zloty and Hungary's forint -- Slovakia is surviving relatively unscathed.

"It's excellent," said Matej Sobol, a 27-year-old sports instructor from the northern ski resort town Liptovsky Mikulas. "Seeing what is happening to the zloty or forint and then having the crown fixed to the euro has really been a sort of a shield."

The neighbouring Czechs once sneered at Slovakia's push to join the euro quickly. The Alpine country of 5.4 million will be the poorest euro member, behind Portugal with 71 percent of the EU's average gross domestic product per capita.

But it is already seeing benefits. Its crown is the only currency in the region that has not weakened since its exchange rate was locked at 30.126 per euro in July, a boon for Slovaks who can travel abroad or buy imported goods at stable prices.

In comparison, Poland's zloty lost 30 percent per euro and Hungary's forint 15 percent. The Czech crown is down 12 percent.

Euro adoption had for months fuelled fear among Slovaks that the switch will bring higher prices, as seen in other newcomers to a club that will now have 16 members.

But months of financial turmoil across the globe and international rescue packages for countries such as fellow EU members Latvia and Hungary have changed many people's minds. A poll for daily Hospodarske Noviny in November showed 58 percent of Slovaks viewed the euro positively, versus 43 percent a year earlier. Only 35 percent saw it as negative, from 52 percent. (c) Reuters
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