The Path to Euro Adoption: a Case Study of Slovenia and Slovakia

By the terms of their treaties of accession, the financial integration and the adoption of the euro became binding on all new Member States of the European Union. Once they meet the convergence criteria and ensure their laws are compatible with the euro area, they are legally obliged to adopt the euro. This paper aims to track the integration path into the euro area of Slovenia and Slovakia, and to find out the main lessons from these stories. The results revealed that the process of adopting the euro in both countries has been very smooth and rapid, due to a general political and public consensus driven by an efficient communication strategy. Thanks to the emphasis on macroeconomic stability throughout the pre-accession period and due to clear economic policy priorities, Slovenia managed to remedy the economic imbalances and to meet the nominal convergence criteria. In the same time, fundamental institutional reforms and foreign direct investment have allowed Slovakia to adopt an export-oriented growth model that made this country one of the most notable examples of the catching-up process in recent decades.