Slovakia can join the euro area in 2009

 The European Commission concluded that Slovakia meets the criteria for adopting the euro and made a proposal to the Council to this effect.

The regular Convergence Report on euro readiness, adopted by the Commission, shows that the other nine countries with a so-called 'derogation' have made progress on the road to the single currency, but do not yet meet all the conditions for euro adoption.
The Council of EU finance ministers (ECOFIN) will take the final decision on the adoption of the euro in Slovakia in July, after Parliament has given its opinion and EU heads of state and government have discussed the subject at their summit meeting in June.
“Slovakia has achieved a high degree of sustainable economic convergence and is r eady to adopt the euro on 1 January 2009. However, to ensure that the adoption of the euro is a success, Slovakia must pursue its efforts to maintain a low-inflation environment, be more ambitious with regard to budgetary consolidation and strengthen its competitiveness position," said Joaquín Almunia, EU Commissioner for Economic and Monetary Affairs.
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The so-called “convergence criteria” which an EU member state needs to fulfill in order to join the euro area consist of four stability-oriented economic conditions regarding the government budgetary position, price stability, exchange rate stability and convergence of long-term interest rates. The national legislation on monetary affairs must also be in line with the EU Treaty.
The 12-month average inflation in March in Slovakia was 2.2%, well below the reference value calculated at 3.2% for the same month. The deficit and debt are well within the acceptable limits for the convergence assessment: the deficit was 2.2% of GDP in 2007 and is expected to come down to 2.0% of GDP this year, in the Commission's spring forecasts. The general government debt stood at 29.4% of GDP in 2007. Slovakia’s average long-term interest rate over the year to February 2008 was 4.5%, below the reference value of 6.5%.
EU countries that do not meet the Maastricht convergence criteria for the euro set out in Article 121(1) of the EU Treaty are said to have a 'derogation'. At the moment the list of these countries includes Bulgaria, the Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland, Romania, Slovakia and Sweden. The United Kingdom and Denmark have opt-outs on joining the euro.

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