Dual prices may help avoid price hikes after Euro adoption

Even though Slovakia became an EU member on May 1, the adoption of the Euro is still ahead. The best way to avoid a rapid rise in prices in tandem with the adoption of the Euro is to mark the goods with two prices - in the national currency and in Euros. This should be implemented long before the common EU currency is actually introduced in Slovakia. According to Slovak EU Commissioner Jan Figel, psychologically speaking, the public's fear of a price hike or inflation growth is understandable. One of the possible means to prevent this is to employ a longer preparation period with alternative prices. He said this in respect to the EC report on preparation of the new 10 EU member countries, including Slovakia, for Euro adoption, which was published earlier on Wednesday.

When asked to be more specific, Figel noted that Slovakia should introduce dual prices a year or two before it joins the ERM II mechanism. A two-year stay within the ERM II is a precondition for a country which intends to join the Euro zone. Since Slovakia plans to adopt the Euro in 2009, it is thus expected to enter ERM II in 2007, at the latest. Slovakia has already taken several decisions regarding the adoption of the Euro that the other new EU members were still to make. As indicated by the EC report, Slovakia has a national coordinator - finance ministry - established and the government approved a national strategy and declared a tender for minting Slovak euro-coins. That is an example of a phase that many new member countries have not even begun yet.