This Report assesses the state of play of the practical preparations for the changeover in Slovakia which will enter the euro area on 1 January 2009, following the Council's decision concluding that it fulfils the necessary conditions for the adoption of the euro.

Since January 2008, the euro area comprises 15 out of 27 Member States of the EU. Among the remaining 12 countries, 10 are the 'Member States with derogation' (Bulgaria, the Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland, Romania, Slovakia and Sweden) which are expected to adopt the euro once they fulfil the conditions prescribed by the Treaty. In the case of Slovakia, the fulfilment of the convergence criteria was concluded by the Commission on May 7th, and its membership was backed by the Parliament in June.

Slovakia will therefore adopt the euro on January 1st 2009 under a 'big bang' scenario.

According to the Commission, in addition to meeting the convergence criteria, the countries need to undertake extensive practical preparations in order to prepare all sectors of their economies, administrations and citizens for the introduction of the euro. In order to facilitate countries' preparations for the changeover, the Commission has built on the experience acquired in the course of the introduction of euro cash in 2002, 2007 and 2008 in order to prepare a 'Recommendation on measures to facilitate future changeovers to the euro'.

In the case of Slovakia, the steering body of the preparations is the National Coordination Committee (NCC), chaired by the Minister of Finance (the National Coordinator) and co-chaired by the Governor of the National Bank of Slovakia (NBS). The NCC supervises the fulfilment of the National Plan for the Introduction of the Euro.

The government has also created an ad-hoc post of 'Government Plenipotentiary for the Introduction of the Euro', who should coordinate day-to-day preparations and point at eventual problems. The technical details of the preparations are discussed at the level of five Working Committees; each of them being supervised by a different Ministry or the NBS.

In addition to the preparation of the public Administration, there are some preparations to be made for the introduction of euro cash and the withdrawal of koruna cash from circulation, which are under the competence of the National Bank of Slovakia:

• Euro notes and coins needed: the NBS has ordered 188 million euro banknotes and 500 million euro coins. The banknotes will be borrowed from the Austrian National Bank while the coins will be minted by the Slovak Mint of Kremnica.
• Withdrawal of national cash from circulation
• Frontloading and sub-frontloading of banks: The frontloading of commercial banks with euro cash will start in October 2008.
• Sub-frontloading of citizens: Citizens will have the possibility to buy mini-kits worth 500 SKK (approximately €16.60).
• Exchange and withdrawal of cash after €-day: In order to facilitate the cash changeover, the NBS and commercial banks plan extra opening hours in the first days of January 2009. The banks are regularly training their staff for the introduction of the euro and some of them provide training facilities to their major clients. Many banks have created special euro related web sites.

Besides, 72% of Slovak citizens fear price increases and abuses at the occasion of the changeover. For that reason, NCC adopted the Strategy for the Protection of Consumers, which aims to prevent abusive behaviours ans protect the consumers. The Strategy is based on two pillars: informing the citizens and monitoring and controlling prices.

The government has also undertaken to prepare enterprises for the changeover. The preparations of enterprises for the changeover are overseen and supported by the Ministry of Economy and its National Agency for the Development of Small and Medium Sized Enterprises (NADSME). The main activities of NADSME consist of building an advisory capacity at regional level (in cooperation with the Regional Business Information Centres network (RPICs)), organising information seminars for SMEs and preparing information materials (e.g. brochures, manuals etc.).