Following the September decrease of 6 percentage points to 70 percent, the probability that Slovakia will adopt the euro in January 2009 increased again slightly to 71 percent in October. According to the regular survey conducted by the INEKO non-governmental organization and the Club of Economic Analysts, this is the result of the Cabinet-approved state budget draft for 2008, which meets euro adoption criteria. “However, this growth in probability was hampered by plans for the huge highway construction through PPP projects that the government is insisting upon despite the cautionary stance of the Finance Ministry,” said INEKO analyst Peter Golias.
In October, analysts estimated the probability of meeting the budgetary Maastricht criterion at 78 percent on average, which is a slightly more optimistic view than in September. They think that Slovakia should achieve 2.8 percent of GDP deficit of the general government, which would be 0.2 percentage points below the required level. Potential inclusion of the National Highway Company (NDS) budget in the general government budget should not be a threat. Economists say that the only questionable matter is the sustainability of public finances in the future, thanks to the announced PPP projects.
The probability of meeting the inflation criterion stagnated at its September level of 85 percent in October. Economists are still convinced that Slovakia will manage to meet the criterion of low inflation; nevertheless, they again question sustainability, similarly as in public finances. This skepticism is based on the fact that inflation is currently kept low by the firming crown. After euro adoption, consumer price growth will be the sole channel for catching up with the price level of the Eurozone, since there will no longer be the channel of the firming exchange rate,” said Vladimir Zlacky of Ernst & Young.
Economists believe that Slovakia should not have significant problems in meeting the exchange rate stability criterion. The probability of its fulfillment increased by 3 percentage points, to 88 percent, in October. Analysts find the current exchange rate of the euro stable. However, Marek Gabris of CSOB stated that the vague formulation of the criterion itself could be a problem. “If there are doubts about Slovakia’s accession to the Eurozone, this is the easiest argument that could be used against its entry,” he added.

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