On 1 January 2009 the euro area will have two reasons to celebrate: Slovakia will become the 16th country to use the single currency on the same day that the euro marks its 10th anniversary. From New Year's Day 328.6 million people including 5.4 million Slovaks will now share the same currency.
The euro - a quick look at its history
The euro was created in 1999 when 11 countries irrevocably locked the bilateral exchange rates of their currencies and equipped themselves with a single monetary and exchange rate policy managed by the European Central Bank created six months earlier. Greece joined them in 2001 and in 2002 euro banknotes and coins were introduced. Slovenia was the first of the accession countries that joined the EU in 2004 to adopt the common currency (1 January 2007). Cyprus and Malta followed suit on 1 January 2008.
2009 - the year for Slovakia's turn to join the euro and reap its benefits
2009 will see the third enlargement of the euro area to Slovakia, which will adopt the euro at a rate of 30.1260 Slovak koruna to one euro.
The imminent changeover has fostered macroeconomic stability in Slovakia and provided it with an anchor in a time of generalised crisis. It will also create greater trade opportunities for Slovakia in the global economy and help attract foreign investment.
Ready for the cash changeover
Unlike the 'first wave' euro area members in 2002, Slovakia will put euro banknotes and coins into circulation on the same day that the euro becomes the country's official currency. This is known as the 'big-bang' scenario. Slovenia, Cyprus and Malta did the same. However, Slovak koruny may be still used in cash payments alongside the euro until 16 January 2009 and it will still be possible to exchange them for euro thereafter:
• Slovak koruna banknotes can be exchanged free of charge in all commercial banks until the end of 2009, while the Slovak central bank (Národná Banka Slovenska - NBS) will continue to exchange them indefinitely, under the same conditions as on 1 January 2009;
• Slovak coins can be exchanged in commercial banks until 30 June 2009 and in the NBS until the end of 2013.
According to the NBS's calculations, some 188 million euro banknotes and 500 million euro coins are needed for the changeover. The banknotes were borrowed from the Austrian National Bank.
National sides of Slovak euro coins
Slovakia's euro coins, which bear three different designs on the national sides, are minted by the country's own Kremnica Mint. The designs were chosen by public vote and approved by the Board of the NBS.
The €1 and €2 coins depict a double cross on three hills which are part of the Slovak coat of arms and have been a symbol of the Slovak nation since the 16th century.
The 10-, 20- and 50-cent coins depict Bratislava Castle, a massive rectangular building standing above the Danube whose origins date back to the 9th century. The castle is one of the most famous Slovak monuments and is an important cultural symbol.
The 1-, 2- and 5-cent coins feature Kriváň Peak in the High Tatras (a mountain range in northern Slovakia belonging to Carpathian Mountains), another important symbol for the Slovak nation.
>> See the national sides of Slovak euro coins
Supplying euro cash to businesses and citizens
The first commercial banks in Slovakia were supplied with euro cash at the beginning of September. In total, 16 commercial banks working with cash ordered euro cash from the NBS. They have, in turn supplying businesses with the euro cash needed for the first days after the changeover (in January, change must be given exclusively in euro).
Almost 6500 businesses had been supplied with euro cash by mid-December. The public were also keen to get their first Slovak euro coins: almost 90% of the 1 200 000 euro coins mini-kits were sold within five days.
To satisfy the demand, the NBS issued an additional 90 050 mini-kits on 15 December.
To facilitate the changeover, the NBS and commercial banks will be open for cash exchanges and withdrawals on 1 January (which is normally a bank holiday) and during the weekend of 3-4 January. For several months the banks have been encouraging the public to deposit excess cash in their bank accounts and use cards for payments instead, in order to reduce the volume of cash to be exchanged after €-day. Some banks are also offering free-of-charge exchanges of Slovak koruny into euro at the official conversion rate in the last few weeks of the year.
Virtually all 2172 ATMs in Slovakia are exepected to be dispensing only euro banknotes (mainly €10 and €20) by 2 a.m. on 1 January. Special attention will be paid to centrally located ATMs so that they are well supplied with Slovak koruna notes before midnight and with euro cash shortly after. Any ATMs which, for technical reasons, cannot be adapted on time will be closed. All 26 800 point of sale terminals should be able to work in euro as of €-day.
Preparations of businesses and administrations in the final stage
Most of businesses in Slovakia started to prepare for the changeover well in advance. According to the June 2008 Eurobarometer survey, some 80% of enterprises launched their preparation more than 6 months before €-day. Public administration bodies have prepared all necessary legislation for the changeover, trained their personnel (especially staff in direct contact with public) to work with the new currency and arranged for their IT systems to be euro compatible. According to a survey conducted by the Slovak Ministry of Finance in mid-November, virtually all central and local administrations should have their IT systems converted and tested by 23 December.
Building consumers' confidence
In order to address consumers' fears of price increases around the changeover, Slovakia implemented a wide gamut of measures.
Signatories to the code ethics (on prices) pledge to convert prices accurately and not exploit the changeover for profit. Some 16 000 bodies have signed up and can be identified by the logo: shops, service providers' outlets, and local and regional administrative offices.
Compulsory display of prices in both koruny and euro started on 24 August and will last until 1 January 2010. Compliance is carefully monitored by the Slovak Trade Inspection (STI) which has visited more than 15 000 shops and service providers since August. The share of outlets where the prices in two currencies were displayed correctly increased from 54% to 85% between the end of August and the end of November. The checks carried out by the STI are complemented by a price monitoring scheme run by the Association of Slovak Consumers.
Citizens are strongly encouraged to report any suspicious price increase to the price monitoring bodies or to the Government Plenipotentiary for the euro. All complaints are fully investigated. Citizens are regularly informed of the results of the checks and are systematically given feed back on their complaints.
A comprehensive information and communication campaign
The consumer protection measures are also promoted via an information campaign on the euro. TV spots have mostly focused on the conversion rate, the dual display of prices and the code of ethics, as well as on the practicalities of the cash changeover and de-hoarding of koruny.
Households have received two packages containing information material and conversion tools by direct mail. Different language versions were produced for national and ethnic minorities. The largest billboard ever-displayed in Slovakia shows a vast euro coin on the front of the NBS building in Bratislava and reminds passers-by of the imminent changeover.
The Slovak authorities have implemented a comprehensive, well-targeted communication campaign preparing the ground for the introduction of the euro. It was directed to the entire population, with special attention paid to Roma and Hungarian minorities and more vulnerable social groups.
The campaign provided clear and concise information. The Slovak authorities left no stone unturned: they ran specialized TV-, radio and print campaigns, they have put up a dedicated website and euro help line, they held conferences and seminars, and they distributed millions of copies of publications and promotional material.
>> Slovak video clip on euro changeover
The European Commission has provided technical and financial assistance in the preparations for euro introduction. Many of the communication activities were conducted in close cooperation with and with the financial support of the European Commission.
The massive effort has paid off. Survey results show that almost all Slovaks feel well informed about the changeover and that a large majority are very happy to adopt the euro as their national currency.
Images and video, courtesy of National Bank of Slovakia.