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Slovak pockets jangling with euros already

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On Monday Slovaks were able to hold in their hands their country’s first euro coins. The launch of the sale of the so-called “starter packages”, which contain 45 coins, at a value of 500 Slovak crowns, has caused a veritable shopping fever.

“It’s is maddening! It’s only 10am and they don’t have any coins left. I need some change. I have a shop and I wanted to make sure that I have enough cash,” says vegetable vendor Tibor Kriek angrily, as he stands by the post office in Bratislava. He could still try his luck at a nearby bank. But already from a distance, it’s possible to see a long queue. The reason why so many places have sold all their euros already is also partly caused by the fact that people intend to give euros as Christmas presents.

It will be possible to pay using euros starting 1 January. By that time Slovaks will be able to withdraw euros from bank machines.

Many Czechs have also expressed an interest in obtaining Slovak coins that feature an engraved double cross on three hills and Kriváň or the Bratislava Castle. “This morning already there were people here from Hodonín. They were buying five to ten packages at once,” says a postal worker at the office’s Holíč branch.

Czech firms not pleased

While businessmen under the Tatras have plenty of reasons to rejoice over the euro introduction in January, Czech exporters aren’t quite as happy. Exports to our former countrymen have helped them weather the negative effects of the strengthening crown. That era is over. “The Czech Republic is unfortunately becoming an island surrounded by the eurozone. Due to its strong currency, Slovakia was, until now, one of the few countries where we could export automobiles without losing money. We will no longer have that advantage,” says Radek Špicar, communications director for Škoda Auto. And yet, when it comes to the volume of Czech exports, Slovakia is second after Germany.

In order for Czech products to remain competitive on the Slovak market, they will need to adjust prices in line with those of competing exporters, which are already doing transactions with Slovakia in euros. “Our customers are reacting to the arrival of the euro and want lower prices. We will need to address this situation,” Roman Blažíček, the director Lasselsberger, a Plzeň company that manufactures household ceramics, told HN.

According to analyst Jiří Šimek from Citco, exporters can take solace in the fact that the decreased number of currencies they are trading with will mean lower expenditures for managing accounts, as well as lower fees for currency conversion.

The Czech Republic will need to wait

Slovakia is the first of the Visegrad Four countries to adopt the euro. The Czech Republic still has yet to set a euro adoption date. According to Zdeněk Tůma, governor of the Czech National Bank, and according to Oldřich Dědek, national coordinator for euro adoption, the switch to the euro will be an important issue next year.

Out of the 12 newly admitted EU countries, Slovenia, Malta and Cyprus have so far introduced the euro. Poland, Bulgaria and Romania plan to have the euro by 2012. To handle the transition to the new currency, Slovakia is borrowing 188 million euro bank notes from Austria’s central bank – the equivalent of EUR 7 billion.

Translated with permission by the Prague Daily Monitor.

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