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Analysts: Future of Slovaks With Euro Unknown
Monday 14 December 2009 Zoom in | Print page
Bratislava, December 14 (TASR) - Economic analysts can't say for sure whether the introduction of the euro in Slovakia was more positive than negative. Only time will tell, analysts agreed on Monday.
UniCredit Bank analyst Jan Toth said at a conference organised by the European Commission Representation in Slovakia and Slovak Central Bank (NBS) in Bratislava focusing on the year's experience in Slovakia with the euro that "the introduction of the euro in the time of the crisis was too painful for Slovaks".
"Within the V4 countries, Slovakia has experienced the greatest GDP decline, the banks sector lost 11 percent of its incomes, while industry is falling as well. The euro fixed the rate and now we don't have that cushion that can react to movements in the economy the way our old currency did," said Toth.
Juraj Karpis from the Institute of Social and Economic Analysis (INESS) also thinks that it's not yet possible to evaluate whether euro adoption was a good or bad step. "This year's fall of retail revenues is significant compared with 2008. Exports also remain endangered this year," said the analyst. According to him, the global economic crisis revealed that realising the benefits of the European Currency Union (EMU) is more complicated than it may seem. It is therefore questionable, said Karpis, if EMU can withstand "individual fiscal policies".
Peter Gonda from the Conservative Institute, which co-hosted the event, said that people don't sufficiently realise that the common currency suppresses basic economic principles. "The European Union (EU) doesn't accept the power of the market, and of money, which are the basic economic principles. It also suppresses competition, everything is much too regulated," said the analyst.
The euro secures for Slovakia, according to Gonda, a channel of a lower rate risk and a channel of additional costs, restrictions and deepening of economic recession. "The euro has inherent inflation attached to it, and it's only a matter of time when this becomes apparent," he said.
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