Consequences of adopting the euro

If a country is part of the single-currency area, this involves benefits as well as costs.

It is expected that the adoption of the euro will bring several advantages for citizens and enterprises:

• providing a more stable environment for the whole economy by eliminating exchange rate fluctuations and therefore by eliminating uncertainties, risks and exchange costs;
• facilitating business in non-European markets;
• easier price comparison of goods and services between Slovenia and other euro area countries;
• enhanced competition as a consequence of easier price comparisons within the euro area;
• elimination of costs related to the exchange of different currencies;
• wider and more diversified offer of saving opportunities, easier loan raising, and an end to the search for exchange offices before and whilst traveling.

As the benefits are mostly related to lower transaction costs in trade within the area, the benefits of the introduction of the euro in countries with strong trade ties outweigh the drawbacks. This is also true of Slovenia, being a small and open economy concluding the greatest proportion of international trade deals with the euro area countries.

In order to prevent undue price increases Slovenia introduced informative double pricing and set up price-watches. To monitor closely the price developments before and after euro adoption, the Statistical Office, the Ministry of Economy and the Slovene Consumers' Association signed a detailed agreement on the modalities of the so called price-watch. Within this agreement, the Statistical office published along its monthly reports a special section devoted to all goods and services that may exceed the normal price increase measure, and also reported on specific price developments. Parallel price-watches were organised by the Consumers' Association.