On January 1, 2007, Austria’s neighbor Sloveniasuccessfully introduced euro banknotes and coins as legal tender. To mark the occasion, Banka Slovenije and the Oesterreichische Nationalbank (OeNB) held a joint press conference at Alte Universität in Graz, Austria, on March 19, 2007. Governors Mitja Gaspari and Klaus Liebscher and OeNB Vice Governor Wolfgang Duchatczek took stock of the euro’s role in the development of the Slovenian and Austrian economies and noted that the launch of the euro in Sloveniahad been successful.
An Achievement for Slovenia
Sloveniahas set a milestone of European integration as the first of the ten new Member States to have introduced the euro. An ambitious convergence process marked by structural reform and a stability-oriented economic policy led up to the Slovenian success story. The convergence efforts lowered inflation and created the framework conditions for above-average economic growth. Slovenia’s membership of Economic and Monetary Union (EMU) signals that the euro area is open to all European Union (EU) Member States that fulfill the Maastrichtcriteria, and Slovenia’s success has shown that the criteria can be met.
An Achievement for Austria
Austriahas benefitedextraordinarily from European integration. According to estimates, some 4½ percentage points of cumulative economic growth during the past decade can be directly attributed to EU membership. Roughly one-fifth of this growth is due to the introduction of the euro, and the opening up of Central and Eastern European markets accounts for the remaining 3½ percentage points. The integration process as such promoted the creation of between 100,000 and 150,000 jobs.
Austriaplays an important role as an external trade partner for Slovenia,right after Germanyand Italy. Austrian companies are by far the most important direct investors in Slovenia: About 30% of all direct investment originates in Austria. Austrian banks, in particular, range among the leading foreign market participants in the Slovenian banking sector.
Future Challenges
Membership in Economic and Monetary Union represents a contribution to economic welfare and stability in Europe. By solidly anchoring medium to longer-term inflation expectations in the euro area at levels consistent with price stability, monetary policy can make an ongoing contribution towards fostering sustainable economic growth and job creation in the euro area.
Companies and consumers benefit from the elimination of transaction costs for currency exchanges, and consumers profit especially from more transparent prices. In addition, the euro promotes further trade integration and gives rise to efficiency gains resulting mainly from the elimination of exchange rate risks within the single currency area. The deeper integration of financial markets brought about by the euro contributes to low capital costs.
Cooperation between Sloveniaand Austria
European integration strengthens competitiveness in a globalized world and benefits regional cooperation, with cooperation between national central banks being a case in point. Austria, for example, contributed to the smooth introduction of euro banknotes and coins in Slovenia: On behalf of the Eurosystem, the OeNB provided Sloveniawith euro banknotes. The next major project in the field of euro cash is the introduction of a new series of euro banknotes. As banknotes are highly sophisticated technical products, preparations for the new series are already under way. The security features will be even easier for consumers to identify and will be integrated into the design of the banknotes. The new series is scheduled to be issued from 2010. Continuing their successful cooperation, Banka Slovenije and the Oesterreichische Nationalbank will join forces in developing this project.