Brussels, 04/05/2007 (Agence Europe) - Four months after the extension of the eurozone to Slovenia, the Commission published a report on Friday on the changeover to the euro. The changeover to the euro in Slovenia on 1 January 2007 was a success, explained a spokesperson for the economic and monetary affairs commissioner on Friday, noting that the 'changeover to the euro in Slovenia was a swift and smooth affair'. At a press conference, the spokesperson explained that in terms of the return of legacy cash, Slovenia even performed better than when the euro banknotes and coins were introduced in the rest of the eurozone in 2002. "Slovenia's adoption of the euro was a swift and smooth affair," writes European Economic and Monetary Affairs Commissioner Joaquin Almunia in a written press release, confirming reports made in the first few days after the tolar was replaced by the euro (see EUROPE 9335). The commissioner added: "This once more underlines the importance of early and careful preparations and of timely information and communication on the euro," to avoid any gap between perception of price increases by citizens and real inflation levels.
On the technical front, the Commission says that a dual circulation period (in which both currencies are legal tender) of two weeks is sufficient. Slovenia's experience shows that the 'Big Bang' approach - i.e. irrevocable locking of the exchange rate and simultaneous introduction of the euro banknotes and coins - works well because the euro has been in circulation for five years now. All EU countries that have yet to adopt the euro and have drawn up a so-called National Changeover Plan, also plan for a 'Big Bang' scenario. Slovenia's changeover from the tolar to the euro was a swift and smooth affair. The fact that Slovenians were already familiar with the euro also contributed to a rapid changeover process, explains the Commission. Before €-day (5 January), the vast majority (more than 90%) had already seen euro banknotes and didn't even have any tolars left. Some 70% of payments were made in euros on 5 January. Eleven days after introduction of the euro, more than 80% of tolar banknotes had been returned to the Slovenian central bank compared with only 40% of the legacy notes in the first wave of countries, explains the press release.
While there were concerns about price increases and some unusual rises did indeed occur, those fears were largely unjustified, explains the Commission, adding that 'the Slovenian experience illustrated once more that perception, expectation and reality with respect to price evolutions do not necessary go together, confirming that a change of currency affects people's scales of values and requires a mental adjustment process that is only gradual,' like in the rest of the eurozone. Overall prices declined in January in Slovenia, compared to December 2006, as they have been doing for a number of years due to the impact of the seasonal sales, with annual inflation falling from 3% in December 2006 to 2.8% in January 2007, explains the Commission. Prices rose by 1.3% overall in Slovenia in the first four months of 2007 compared with a 1.5% rise in the same period of 2006, according to the Slovenian statistics office, estimating the impact of the changeover on consumer price inflation during and after the changeover period at 0.3 percentage points. (ab)