Slovakia is a big beneficiary of the euro and will therefore stay in it forever

Richard Sulik who is mentioned here does not have the power to force his opinion, and anyway he only talking about a plan b should things take an unexpected turn such Germany leaving the euro itself. If one reads his comments in Slovak he is stating the obvious, if the euro's chief instigators ( Germany and France) throw in the towel and decide to give up on being parts of the biggest trading block in the world then Slovakia should prepare for it.

Journalists with not much to write should note that this hypothetical is firmly on pig flying territory. There is an anglosaxon assumption that the Euro and the EU are unecessary so the breaking of the euro is a matter of time back to the natural order of things... Additionally talking to british politicians one gets the impression that deep down they think that it was all a matter of a Helmut Kohl & Miterran love-in in the 1980s and that the future is bright for tiny countries with mercantilist policies. This thinking is ofcourse deluded and a product of lazy economic nationalism, self interest disguised as idealism, breathtaking arrogance, and a short termism that diplomatically has led Britain to now have the smallest influence in europe in its entire history. As the small print says in all that rubbish investment products sold in UK banks "past performance does not guarantee future returns". The world where the UK could exploit vast swathes of the world because of the primitiveness of the natives are over. The world is now more sophisticated and massive trading blocks are emerging, and you better be part of one of them. Slovakia's establishment has understood that and is integrating into the most viable scheme possible to address the globalising challenge. To put it in other words, even if the euro were to fail, it would be replaced by a successor!

Things would have to get massively worse for the euro to be a liability rather than an advantage for Slovakia.
For this small country this border/labour/monetary (and in the future possibly even fiscal) union with Germany is of strategic importance, as it is for other small fiscally conservative nations dotted around germany, such as the Netherlands, Denmark, Finland, Czech republic, and not least Austria. All these nations share common values and high Human Development Index as well as raw GDP performance.

Additionally under the EU, schengen, and euro umbrella, Slovakia has redressed the economic isolation that came about from the iron curtain and the nationalisms of the 30s and 40s. Membership of this Neo-Austrohungarian economic zone, Czechs, Austrians etc is powering the economy and integrating it in big infrastructure investments that will further entrench these ancient economic links.

Economic integration under the euro is not an ideology or due to romantic visions of internationalism, but because globalisation is making this a necessity. If there are countries that at some point reintroduce currencies, they will have lost in the challenge of the emerging competitors (China, India) and will face a deflationary path to irrelevance and further nationalism. One has to only look at states with independent currencies and with no european perspective. It reads like a list of basket-cases in europe that are going nowhere (Moldova, Serbia, Montenegro, Albania, Ukraine) So the answer to the article is probably that Slovakia would probably the least likely state to leave the Euro.

The real question also is why so much focus on the euro and so little attention is paid to the printing presses of the dollar?? That is far more newsworthy..


Should Slovakia quit the euro?

December 13, 2010 4:02pm | 

Slovakia is the newest member of the euro, and as the common currency lurches from crisis to crisis, there seem to be increasing doubts in Bratislava as to the wisdom of accession. (actually the epicenter of the debate is why the club is bailing out wayward members that are richer than slovakia). 
The qualms come from Richard Sulik, the speaker of parliament and leader of the SaS party, a new grouping that is part of the centre-right governing coalition. In an article for the Hospdarske Noviny newspaper, Sulik denounces the policies that got Greece and Ireland into trouble, and looks fearfully at the potential threat facing Spain and Italy. In response, he says Slovakia should come up with a “Plan B” and contemplate reintroducing the koruna.
Sulik, a self-made millionaire who made his fortune in setting up a chain of copy shops, was a member of the team that helped create the Slovak economic miracle more than a decade ago by introducing flat taxes and slashing bureaucracy.
Finance minister Ivan Miklos, himself a key player in those reforms, has a different view: everything possible should be done to keep the euro strong.
Slovakia was initially thrilled to be spared the turmoil felt by its central European neighbours when the economic crisis hit the region. Flush Slovaks went cross-border shopping to Poland and Hungary in 2009 to spend their euros in countries where the national currency had plummeted in value. Foreign investors like Volkswagen were also pleased because they no longer faced currency risk in Slovakia, but still had access to much cheaper workers than in Germany.
However, Slovakia baulked at paying €800m ($1.1bn) to bail out Greece, and now faces the prospect of more demands as other peripheral eurozone countries fall into trouble.
“I think that it reflects a general frustration of the Slovak government,” says Lars Christensen, emerging markets analyst with Danske Bank. “The feeling is that when you join a club you should follow the rules, and not pay for the people who have broken the rules.”
Next door meanwhile, the Czech Republic, never an enormous euro enthusiast, has made it clear that it is in no rush to join the common currency.
“Nobody can force us into the euro,” Petr Necas, the prime minister, said recently, while Vaclav Klaus, the Eurosceptic president, has asked the government to work out if it can renege on the promise made to eventually adopt the euro when the Czech Republic joined the EU in 2004.

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