Monday

26th Aug 2019

Slovakia set to get green light for euro entry

Slovakia is next week to receive the green light to become the 16th member state of the eurozone, according to a draft report seen by EUobserver.

In the report, the European Commission confirms that the country has met all the conditions to switch to the euro on 1 January 2009.

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  • The EU commission is to suggest that Slovakia be admitted to the eurozone (Photo: European Community)

"In its convergence Report, the commission concludes that amongst the assessed member states only Slovakia fulfils the conditions for the adoption of the euro," says the draft document, set to be presented on 7 May.

The convergence report evaluates the economic and fiscal policy development of the EU member states which are not part of the bloc's monetary union. While the UK and Denmark have an exemption from the euro, the remaining countries of the 27-nation EU have a legal obligation to join.

The 5.3- million strong Slovakia officially applied for approval of its euro entry in early April, after several years of adopting concrete measures to meet the planned 2009 entry.

In its draft report, the commission says "the budget deficit in Slovakia has seen a credible and sustainable reduction to below 3 percent of GDP," and its average inflation rate "is well below the reference value, and it is likely to remain below the reference value in the months ahead, albeit with a narrowing margin."

The levels of inflation in Slovakia was previously regarded as the most sensitive area of the Slovak candidacy, with Brussels urging Bratislava until the last minute to make more lasting cuts in the budgetary deficit to prevent future inflation hikes.

"We have said several times to Slovak authorities that the fiscal stance of the Slovak policies is not as ambitious as desirable. Fiscal consolidation should be more ambitious so as to help the authorities fight inflation more successfully," Joaquin Almunia, the EU's economy commissioner said at a press conference on Monday (28 April).

But the draft paper set to be adopted next week confirms that Brussels will assess the country as meeting all the criteria in a sustainable way.

EU finance ministers will react to the commission's recommendation in June. Later that month, EU leaders are expected to rubber-stamp the decision while in July the conversion exchange rate should be adopted by EU finance chiefs.

If it gets the final go-ahead, Slovakia should join the EU as it celebrates the 10th anniversary of the introduction of euro in 11 states in 1999.

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