The global economy may not be showing signs of improvement; however Slovakia is hoping to see some stability of its economy in 2009. Five years after it joined the European Union, the country is accepting the Euro as its official currency. Slovakia has had to cope with volatile currency for years and now many companies see the change from the Slovak Koruna to the Euro as a positive change that will lead to more stability.
First of all, the use of the Euro is expected to bring price stability. Also, the Euro will result in lower production costs because slow economic growth results in lower rate of inflation. Furthermore, the change in currency is expected to attract foreign direct investment. Another advantage Slovaks see in adopting the new currency is the fact that they can travel abroad without having to worry about exchanging money.
Slovakia will most definitely serve as an example in the future when deciding the entry of countries from the same region. This is because if the change of currency goes smoothly for Slovakia, countries such as Hungary and Poland (both of which will most likely be next to adopt the Euro as their official currency) can use it as an argument why they should be part of the Eurozone as well.
Ten years ago the Eurozone consisted of only 11 countries – Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain. As of January 1st, 2009 Slovakia is the 16th country to join the Eurozone.
The economic crisis is causing some countries to consider adopting the Euro, such as Denmark who has kept its own currency for many years now. On the other hand, countries such as Estonia, Lithuania, and Latvia had to postpone joining the Eurozone as the global economic crisis has caused problems for them.