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Slovenia Business Week no. 02: Slovenian Tolar Enters Its Final Year

Slovenia has entered its last year with the Slovenian tolar (SIT) as legal tender. After the country has recently met the last convergence criteria by curbing inflation, it is clear that it is on course to introducing the euro with the onset of 2007.

According to the Bank of Slovenia, Slovenia, which met all Maastricht convergence criteria at the end of 2005, is not likely to have any major difficulties in the run-up to the euro changeover because it can rely on a stable domestic economy.

"Among the new member states, Slovenia, besides Cyprus, is closest to the average EU level in terms of development. It has also been established that the country's economic structure - an important convergence element - is similar to the EU average," the central bank told STA.

The Slovenian Finance Ministry expects the European Commission and the European Central Bank (ECB) to draw up a convergence report which should form the basis for the final go-ahead by the EU Council by the end of the summer at the latest.

"Austria, currently presiding the EU, has expressed full support for our efforts to discuss the matter at the June session of the Council," the ministry confirmed for STA.

According to the central bank, preparations for the changeover are running according to plan, with expenses for the information campaign in 2006 and the beginning of 2007 being forecast at SIT 330m (EUR 1.4m). A portion of this money is expected to come from the European PRINCE programme.

Informative double pricing is set to start on 1 March 2006, the actual double pricing phase, on the other hand, will start a day after the final tolar/euro exchange rate is set, and would end at the end of June 2007.

The new currency will be introduced with 1 January 2007, with the changeover period, when both euros and tolars are in circulation, lasting through 14 January 2007.

After February 2007 the exchange of tolars without commission will only be possible at the Bank of Slovenia, with no time restrictions for the exchange of bank notes while coins will only be accepted until 2016.

Source: Slovene Press Agency STA

Author: STA