Concerns about Slovakia seeking eurozone membership

Slovakia is the next candidate to join the eurozone. In June, the heads of State and government of the EU will decide whether Slovakia can adopt the Euro in 2009. Though Slovakia fulfills most criteria, there are concerns that Slovakia’s euro adoption might harm the whole eurozone. As the inflation rate is already at about 3.8% and probably would increase if Slovakia joined the eurozone, this could threaten price stability in all other eurozone countries and eventually force the European Central Bank to increase the interest rate at a critical moment. Besides, the Slovak public debt is rising at high rates.  

However, the EU commission might fear to reject Slovakia’s eurozone ambitions because the Slovak government hesitated to ratify the Treaty of Lisbon. Some experts expect a deal between the Slovak government and the EU commission to get the treaty work as well as to get Slovakia the euro.

http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2008-01-30.html

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