Ten years will have passed on 1 January 2007 since Slovenia introduced the euro as the first EU member which joined the bloc in 2004. The common European currency is generally perceived as a success despite that fact that it limited leverage to deal with the recent economic crisis.
By introducing the euro, Slovenia phased out the national currency, the tolar, and became the 13th country in the eurozone.
The new currency was adopted at the exchange rate of 239.640 tolars for one euro, with both currencies being used concurrently for two weeks.
The euro was introduced smoothly, mostly as a result of thorough preparations and a prompt switch from the tolar at ATMs, banks, cash registers and for payments with credit and debit cards.
Looking back at the first days with the new currency, the Slovenian central bank said that half of all ATMs were running on the euro as early as an hour after midnight.
All terminals for card payments were accepting payments in euros immediately after midnight and on the third working day in January, as many as 70% of cash payments at cash registers were made in euros, Banka Slovenije added.
While Slovenia had already lost some of its political sovereignty when it joined the EU in 2004, with the introduction of the euro it shifted control of monetary policy to the European Central Bank (ECB).
Nevertheless, Slovenians largely supported the euro, as they were familiar with it due to the openness of Slovenian economy and the proximity of countries that had introduced it earlier, Banka Slovenije said.
But the situation changed significantly once the global recession hit the country giving the government and the central bank little room to cushion the shocks.
According to Banka Slovenije, attempts to tackle the situation were seen as an additional shock, this time coming from home.
The central bank also pointed out that Slovenia’s robust economic growth in 2005-2008 was based on an unsustainable model of financing, fuelled by soaring public spending.
But the euro is seen as bringing a number of positive things, such as greater transparency, savings in international transactions, lower risk premiums among trade partners, etc.
“The introduction of the euro brought the Slovenian economy stability and lowered costs of payment transactions,” the Chamber of Commerce and Industry (GZS) said.
The Chamber of Small Business (OZS) meanwhile listed lower interest rates, easier access to capital and the end to currency risks as the most positive effects for the economy.
GZS analyst Bojan Ivanc said that the euro was not just a political but also economic project, closely linked to the free movement of goods, services and workers.
He believes that the biggest threat to it at the moment is growing populism, while it still enjoys relatively strong support.
The common European currency is a national currency in 19 eurozone countries, where it is used by more than 339 million people.
It was launched as a virtual currency in 1999, with banknotes and coins starting to circulate in 2002 in 12 EU states in what was the biggest change of currency in history.
Ideas for a common European currency date back to the 1960s, but the euro was established by the 1992 Maastricht Treaty and got its name at the Madrid summit in 1995./IBNA
Source: The Slovenia Times