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Slovenia Business Week no. 03: Central Bank Labels Fiscal Policy on Track for Euro Changeover

The board of governors of the country's central bank agreed that the current interest rate guarantees a stable tolar/euro exchange rate, while Slovenia also fulfilled all the euro convergence criteria

The board of governors of the country's central bank agreed on Thursday, 12 January that the current interest rate guarantees a stable tolar/euro exchange rate, while Slovenia also fulfilled all the euro convergence criteria.

The Bank of Slovenia also expressed its hope that the country would remain on track for the planned 1 January 2007 euro changeover in the future as well.

The board of governors also assessed that wage growth presents no impeding threat to a rise in inflation, while macroeconomic risks are limited, due to upbeat data on the growth and the structure of the GDP.

However, the governors agreed that a large rise in oil prices would present the biggest threat to the inflation rate, according to the press release from the central bank.

The board of governors moreover discussed a bill on the euro changeover. The bill was drafted by an inter-ministerial task force, and, according to the Finance Ministry, will be discussed by the government in the first half of 2006.

The bill regulates the procedure for changing Slovenian tolars into euros, the period and the course of the period when both euros and tolars are in circulation, and includes provisions on how the companies should switch to doing business in euros.

The ministry added that the task force consisted from representatives of the Bank of Slovenia, the finance, economics and justice ministries, the government's legal service and representatives of the Securities Market Agency.

The expenses for the information campaign in 2006 and the beginning of 2007 being forecast at SIT 330m (EUR 1.4m). A portion of this money is expected to come from the European PRINCE programme.

Informative double pricing is set to start on 1 March 2006, the actual double pricing phase, on the other hand, will start a day after the final tolar/euro exchange rate is set, and would end at the end of June 2007.

The new currency will be introduced with 1 January 2007, with the changeover period, when both euros and tolars are in circulation, lasting through 14 January 2007.

After February 2007 the exchange of tolars without commission will only be possible at the Bank of Slovenia, with no time restrictions for the exchange of bank notes while coins will only be accepted until 2016.

Source: Slovene Press Agency STA

Author: STA