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Spending Euros in Slovenia

  • January 21st, 2007
  • Posted by EUEditor

euro-symbol-reduced.jpgPeople in the street, in Slovenia, were recently asked to open their wallets to see how they were adjusting to their new currency – the Euro.

Pollsters from the European Union fanned out to interview citizens while monitoring the up-take of the currency on 1st January.

Slovenia became the thirteenth country to adopt the international currency since it was first issued in 2002.

All member countries of the European Union are committed by treaty to eventually enter the “Euro area”, through taking it up.

However they must qualify by meeting set standards in economic management and performance: on inflation; containment of budget deficits; exchange rate stability; long-term interest rates; and a measure of the “compatibility” of each country’s legislation, e.g. statutes of its reserve bank.

Some able to qualify – Denmark, Sweden and the United Kingdom- have postponed the transition.

Benefits of the Euro are attached to the removal of exchange and trading costs, and the possibility of enacting direct transactions eventually anywhere within the European Union, currently the world’s largest integrated economy.

The European Commission, promoting its Euro, uses the adage, and motto: “A well prepared country is more likely to flourish in a monetary union”.

In Slovenia, just before the cessation of all trading in the old currency, the tolar, which happened on 14 January, the pollsters moved.

The outcome: It turned out that Slovenians were well and truly ready to flourish in a monetary union.

They flourished their Euro banknotes; 82% of them were carrying only Euro currency, another 12% had “mostly” Euros in their wallets. They had a corresponding commitment to the new coins.

Slovenia is the first of the ten countries that entered the EU in 2004, (eight of them formerly communist), to qualify for membership of the Euro group.

Other members so far: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain.

Euros as metal, paper or plastic

The Euro has established itself as a major world currency and the number of Euro banknotes in circulation has reached 11 billion, worth around EU 590 billion (A$950.27-billion; Dcerates). There are more than 68-billion coins worth almost EU 18-billion (AS29-billion).

EU surveys indicate that cash remains very popular with Europeans; cash payments still account for over 80% of retail transactions. High-rollers are provided for with the EU 500 note (A$805), accounting for about 34% of the value of notes in circulation.

Notes are centrally managed but coins are minted by national governments, and within the set format of the twelve-stars circle they have national motifs.

Slovenia has opted to engrave its new coins with images of storks, Mount Triglav, and the national poet France Preseren.

Not all that popular

While the new currency can ease the way for business transactions and travel, many of the folks in Europe still find themselves having to translate what they receive, and spend, into old familiar currencies – and are not always happy making the adjustment.

Recent polling indicates that 48% consider the Euro brings advantages overall, against 38% who think it brings disadvantages.

The percentage of satisfied customers has been declining however, and 93% of survey respondents associate the Euro with price increases.

That point may indicate a certain mystical power for the brightly coloured, and decorative notes and coins – inflation during the time since they were first issued has actually eased.

Reference: European Economy News, no. 5, January 2007; EC ( DG ECFIN).