Slovakia: Goodbye to the Koruna- hello to the Euro

On the first of January, Slovakia will start using the Euro. Slovakia has worked hard to fulfil the conditions laid down in the Maastricht Treaty, so that it can enter into the single European currency. In the capital Bratislava, the signs that Slovakia is about to join the Euro are everywhere. A massive Euro poster covers part of the central bank building. Every shop shows its prices in Euros as well as Korunas. The business world is positive about the change- exports inside the European Union won't carry the costs of currency exchange anymore, and book-keeping should get a lot easier. Report by Karl Harenbrock ------------------------------------------------------------ This song is dedicated to the European currency, the euro. Viera Berkyova is something of a superstar in Slovakia these days after winning a popular television casting show in the country. And with her song about the euro, she's also made the currency popular in Slovakia ahead of its introduction in January. Viera is only 17. She attends acting school in the capital, Bratislava. " I've talked to a lot of Slovaks and all of my friends are receptive toward the euro. They're all looking forward to it. Everyone I know is in favor of the euro." Slovakia is getting ready for the switchover on January first. Since the start of December, banks have been selling starter kits to help people get acquainted with the currency. The kit contains about 16 euros. One euro is equivalent to around 30 koruna, the country’s outgoing currency. German company Brose has its operations on the outskirts of the city. Re-programming software has been a major headache. But it’ll soon pay off. In future, the company will find it much easier to deal with billing and accounting for both domestic and international customers. Brose is a supplier of car doors to automaker V-W. Managing director Axel Mallener thinks the euro will provide a competitive advantage, since rivals in neighboring Poland and Hungary are still subject to wildly fluctuating exchange rates - which make calculations risky. But the switchover hasn’t come for free. Axel Mallener, the Brose Slovakia Managing Director: "A few years ago, if a worker earned say 40 thousand Slovakian koruna, it was worth about a thousand euros on the currency exchange market. But going on the basis of the official fixed exchange rate, it now amounts to 1330 euros. In other words, our labor costs are increasing by 25 percent solely due to the change in the value of the crown compared to the euro." The official exchange rate was fixed in negotiations between the Slovakian and European central banks. Consumers in the country will benefit, because they're now receiving more euros for their Slovakian koruna… but many fear retailers will simply start to raise prices. Businesses are preparing for the switchover. Some retailers already accept euros - even though it's not the official legal tender until January first: "Of course we take euros - but we have to give change in Slovakian koruna. People need to start getting used to the new currency." "Teta" - which means "aunt" - is a supermarket chain in the Bratislava area. The products here are all marked in both euros and crowns, and there’s no confusion about the exchange rate: it’s 30-point-1260 to one. It’s a number that initially will be especially troublesome for businesses. They're going to need lots of small change to pay the difference correctly down to the last cent. This supermarket has stocked up on 60 thousand euros in small coins, and hired a security guard to watch over the small fortune. The chain began ordering the new currency back in October so that enough change would be on hand for the transition. Roman Mozolak, is the TETA Supermarkets Managing Director. "It's unproductive money for us - we can't use it yet or invest it. It's just lying around here." Most Slovaks are happy about the change. Becoming the latest member of the Eurozone seems a good enough reason to give up their old currency.

DW-World | December 16, 2008

Tags:. .bookkeeping. .reprogramming. .maastricht. .viera. .bratislava