VIENNA (Reuters) - The fate of Slovakia's euro bid will signal to the other euro zone hopefuls what treatment they can expect when applying to join the single currency area, a senior International Monetary Official said on Wednesday.
Slovakia hopes to enter the euro zone in 2009 as the first of four central European EU states, and it would be the first post-communist nation with a flexible foreign exchange regime to swap its currency for the euro.
Slovakia expects to meet all nominal criteria for euro zone entry when it is assessed in the spring of 2008.
However, it will also be judged as to whether its convergence is based on sustainable grounds, and the vague definition of the sustainability condition has sparked criticism from the central European governments and central banks.
Christoph Rosenberg, the IMF's senior regional representative for Central Europe and the Balkans, told the Reuters Central European Investment Summit he saw Slovakia meeting the Maastricht criteria for euro zone entry.
But, he added, the question still remained as to how "the sustainability issues are looked at".
"We should also not forget that this fundamentally, in the end, is a political decision," Rosenberg said. "This will send a signal, and whoever makes the decision, will have to be cognizant of that."
Governments, central banks and investors in the region are closely following Slovakia's path to the euro, and many say a negative verdict next spring could sour the mood in eastern Europe and delay other euro applications.
Rosenberg said rejecting Slovakia if it met all nominal conditions could be seen as applying other criteria that are not formally set, such as the level of GDP per capita.
"It would have large repercussions, not only for Slovakia, but it would send a signal to other countries that, in the end, it's the real convergence that's the true test, which is not one that's written in Maastricht criteria," he sad.
© Thomson Reuters 2008. All rights reserved.
| Paper | Aug 20 - 21, 2008 | Manufacturing |
| Japan Investment | Jul 01 - 2, 2008 | Country Summits |
| Global Real Estate | Jun 23 - 25, 2008 | Real Estate |
| Consumer and Retail | Jun 16 - 18, 2008 | Consumer Retail |
| Investment Outlook | Jun 09 - 12, 2008 | Financial Services / Exchanges |
