The death of the Koruna
The Koruna (or crown) was the national currency of Slovakia. This may not be something you knew until you read it just now and you might as well forget the fact straight away. This is because the Koruna ceased to exist at midnight on December 31st 2008 when Slovakia became the 16th member of the eurozone. The official conversion rate between the Koruna and the euro has been advertised extensively in Slovakia and is 30.126. Slovakians now have to get used to a complete change in their notes and coins as euro notes and coins became legal tender on January 1st 2009. So what will be the impact for Slovakia of joining the eurozone?
Slovakia becomes eurozone member BBC News Online (1/1/09)
Slovakia embraces the euro BBC News Online (31/12/08)
Slovakia joins eurozone in new year Times Online (30/12/08)
Slovakia adopts the euro on January 1 Times Online (29/12/08)
Questions
- Examine the likely impact on the Slovakian economy of joining the euro at a time of global downturn.
- Explain three factors that the Slovakian authorities would have needed to consider when setting the conversion rate for the Koruna to the euro.
- Discuss the advantages and disadvantages to Slovakia of joining the eurozone.