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Reversion to National Currency Would Adversely Affect Slovak Economy
Saturday 24 July 2010 Zoom in | Print page
Bratislava, July 24 (TASR) - The potential return to the original Slovak currency - koruna - would adversely affect Slovakia's economy, with reversion to the 2008 changeover rate being impossible.
"Following the return to national currencies, the confidence in individual currencies would be extremely low - particularly with small economies such as the one of Slovakia," Euractiv.sk portal analyst Zuzana Tucekova told TASR. "If we'd choose to go back to the koruna, a return through the Sk30.1260/€1 exchange rate will be impossible. Hence, it would no longer be the same koruna it was two years ago."
A unanimous decision to abolish the joint European currency is theoretically possible, but it would represent a long and costly process. "The exchange rates would depend upon the mood on the markets, with chaos and panic likely to ensue," said Tucekova.
On the other hand, the break-up from the joint currency and introduction of own currency while not an everyday occurrence is also not exceptional. "The Slovak koruna broke away from the Czechoslovak currency this way in 1993. The same process took place also in former Soviet and Yugoslavia republics," said Slovak Academy of Sciences (SAV) analyst Vladimir Balaz.
"Of course, it's necessary to pave a way for such a process at least half a year in advance. Functions of the Slovak Central Bank need to be restored within the field of monetary policies, national banknotes printed and coins minted, exchange rate needs to be set, etc.," he said.
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