FOXNews.com - Slovenia Adopts Euro With Some Nostalgia

Slovenia Adopts Euro With Some Nostalgia

Thursday, December 28, 2006

By ALI H. ZERDIN, Associated Press Writer

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LJUBLJANA, Slovenia — Fatima Sehic frowned as she fingered some shiny new euros _ Slovenia's currency beginning Jan. 1 _ in her wrinkled hand. It's all a bit too much for the 93-year-old, who will have to get used to the country's sixth currency in her lifetime.

"I can't differentiate between these little coins," she murmurs.

The tiny alpine country will become the 13th nation to use the pan-European currency, a switch Prime Minister Janez Jansa called the "biggest national achievement" since Slovenia joined the European Union in 2004.

The Slovene tolar and the euro will be in dual use for only 14 days; starting Jan. 15, the euro will be the only legal tender. A recent EU survey showed that more than two-thirds of Slovenes are happy to adopt the euro, with many saying they see it as further proof they are part of mainstream Europe.

But some are also sentimental about the tolars, introduced when the country declared independence in 1991.

"I'll definitely keep some of them _ they're a piece of history," said Alenka Posavec, a 54-year-old farmer.

"Slovene feelings about the tolar are nostalgic and highly positive," said Niko Tos, a sociologist who runs the prominent survey Politbarometer. For years, the survey has shown that Slovenes trust the tolar more than their government or the church. Luckily, the euro also enjoys high confidence, albeit just below the tolar.

Slovenes will have to get used to coins that have real value. About 240 tolars equal 1 euro _ and since there are Slovene coins as small as 0.1 tolar, it can easily take a fist full of coins to buy just one loaf of bread. The smallest euro denomination, in contrast, is 1 euro cent, or 2.4 tolars.

The country of 2 million is alone among the 10 newcomers that joined the European bloc in 2004 to have fulfilled the rigorous economic criteria needed to join the euro zone.

Only 20 years ago, Slovenia was a drab communist country with annual inflation of up to 1,500 percent; now inflation is 1.9 percent, lower than Germany's. Its economic growth was 4 percent last year, well above the EU's average of 1.4 percent.

The Slovene formula? Maja Bednas, a deputy director of the Office for Macroeconomic Analysis, said long-term economic stability _ achieved by gradual introduction of reforms rather than radical changes _ and coordination between the government and the Central Bank have kept inflation in check.

The success is not entirely unexpected. Even under communism, Slovenia had a penchant for market economics and workaholic habits, and the country has always been the most prosperous of the ex-Yugoslav republics.

In contrast, uncontrolled deficits and rising inflation have prevented the other nine new EU members from joining the euro.

European Commission President Jose Manuel Barroso called the adoption of the euro "a historic event" for Slovenia.

The EU's economics commissioner, Joaquin Almunia, said the switch to the strong and stable euro creates conditions for further economic prosperity. But he warned Slovenia that it must uphold its commitment to reforms "so that (it) fully reaps the benefits of monetary union."

To make the changeover smoother, the euro value has been tagged to all prices in Slovenia for nearly two years. And each household has received a detailed instruction manual about the switch.

In downtown Ljubljana, a neon light flashes the number of days remaining until the changeover. But behind the fanfare, Slovenes worry whether rounding off prices to their euro amount will make everything more expensive.

The Consumers' Association recently published a black list of retailers and services that have already raised prices: potato prices in one store jumped 54 percent; some postal services and parking in downtown Ljubljana doubled in price; dental X-rays in a clinic went up 85 percent. Even a monthly charge for a grave was 10 percent higher, the list showed.

"Avoid those shops and services and protest loudly," the association advised consumers in an ad published in all newspapers.

Prime Minister Jansa promised to closely monitor price hikes, although he insisted recently the changes so far "are much smaller than in any other comparable country" during a changeover.

To preserve its national identity in the uniform euro zone, Slovenia exercised its right to customize the euro coins it mints in the country, decorating them with writers, the country's highest mountain and other national symbols.

Political analyst Vlado Miheljak said Slovenes, who deeply cherish both their national and European values, "will be in love with those euros."

"But only until they realize they don't have enough of them in their pockets," he said.