The European Commission concluded, on the 7th May 2008, 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 another nine countries, that were investigated, 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 Commission adopted its regular Convergence Report assessing progress made by the ten EU countries 'with a derogation' (Bulgaria, the Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland, Romania, Slovakia and Sweden) towards adoption of the euro. EU countries that do not meet the Maastricht convergence criteria for the euro are said to have a 'derogation'. The criteria 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.

“Slovakia has achieved a high degree of sustainable economic convergence and is ready 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.

Assessment of Slovakia

• Inflation: The 12-month average inflation in March was 2.2%, well below the reference value calculated at 3.2%.
• Public finances: The deficit and debt are within 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.
• Interest rates: Slovakia’s average long-term interest rate has been below the reference value since EU accession in 2004 at 4.5%.
• Exchange rate: the Slovak koruna has participated in ERM II since 28 November 2005 and the Commission finds that the koruna has not experienced severe tensions.

The assessment of the progress made can be consulted in the Convergence Report 2008, including its technical annex, available via Economic and Finantial affairs of the European Union website.

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.