Discover Slovenia, The Most Beautiful Place On The Planet Cotonti Sun, 05 Jul 2009 23:04:18 +0000

Slovenia joined Economic and Monetary Union (EMU) as the 13th member on January 1st, making it the first of the 2004 intake to the EU to adopt the single currency. For the government, it is a matter of prestige that the country-which will assume the EU's rotating presidency at the start of 2008-has joined the euro zone ahead of the Czech Republic, Poland and Slovakia as well as the other new member states.

A club worth joining?

At the same time, to judge by the mood in several EMU member states, entry could be regarded as a mixed blessing. The two leading candidates for the French presidency, Nicolas Sarkozy and Ségolčne Royal, have complained that the European Central Bank (ECB) has pushed interest rates too high. A recent poll by TNS-Soffres showed the proportion of respondents who viewed euro-membership negatively had risen to 52% from 45% in 2003. In Italy, some politicians have gone so far as to advocate exiting the euro zone. And in Germany, a recent Forsa poll showed that 58% of Germans prefer the DM to the euro. There is little solid evidence that the euro's introduction has boosted economic growth, and the failure to punish persistent violations of the budgetary rules has seriously undermined the bloc's claim to promote fiscal stability.

In many EMU member states, there is a perception that the switchover to the euro led to the marking-up of many prices for everyday goods. This is not borne out by official data, however: annual inflation in the euro-zone countries fell to 2.2% in 2002, the first year the single currency was in circulation, from 2.5% in 2001. Nevertheless, against the advantages of lower transaction costs, the facilitation of cross-border trade and economic integration, and reduced exposure to external shocks, there are potential drawbacks to EMU membership arising from the fixed exchange rate and the  ]]> Tue, 09 Jan 2007 02:58:00 +0000