A decade of euro in Slovenia
Euro: 10 years of the single European currency in Slovenia
Ten years ago, on 1 January 2007, Slovenia introduced the euro as the 13th EU Member State. The euro replaced the first monetary currency of our independent state, the Slovenian tolar (SIT), at the exchange rate EUR 1 = SIT 239.64.
Steps towards the euro
In January 2017 Slovenia will celebrate 10 years of the adoption of the euro. When it became member of the EU, Slovenia also made the commitment to introduce the single European currency and thus to join the Economic and Monetary Union (EMU). Prior to the introduction of the euro, Slovenia had to fulfil certain conditions, and these conditions focused on the stability of public finances, prices, interest rates and the exchange rate.
Slovenia will mark the tenth anniversary of euro introduction also by issuing a commemorative €2 coin. The central motif on the coin is 10 swallows flying: each of them represents one of the "springs" since the introduction of the euro, while a bird is the symbol of freedom.
At the same time, EU will celebrate the fifteenth anniversary of the introduction of euro banknotes and coins. Globally, euro banknotes maintain the same design, but with euro coins one side is common to all coins and the other (national) side holds a design that is specific to each individual EU Member State.
Milestones in the history of euro introduction
Sources: BS, ECB
Euro in figures
With the introduction of the euro in 2002, 38.1 billion coins and 7.8 billion banknotes in circulation were worth a total of EUR 233.8 billion. Since then, the quantity has been constantly growing and at the end of 2015 there were over 116.2 billion coins and 18.9 billion banknotes in circulation, worth EUR 1,109.4 billion in total.
Prior to the introduction of the new currency, Slovenia asked the European Central Bank (ECB) for 296.3 million pieces of euro coins, worth EUR 103.9 million and weighing 1,465 tonnes, and for 94.5 million pieces of euro banknotes, worth EUR 2.2 billion and weighing 76 tons. Per capita this meant 147 coins and 47 banknotes respectively almost 1,150 euros.
As regards banknotes in circulation in the EMU, the most common denomination in terms of volume and value is EUR 50, while among the coins the 1 cent coin prevails in terms of volume and the EUR 2 coin prevails in terms of value.
The international role of the euro
Today the euro is used by more than 339 million people in the euro area, comprising 19 of 28 EU Member States. In addition, it is the official monetary unit also in six other European countries, i.e. Andorra, San Marino, Vatican City, Monaco, Montenegro, and Kosovo.
The countries with the euro in 2015 generated almost 16% of global GDP (gross domestic product). The euro has thus rapidly become the second most important international currency after the US dollar. It is also the second most common currency that is traded on foreign exchange markets: it is used in approximately 33% of all daily transactions in the world. In 2015 over a fifth of foreign currency assets were held in euros. In 2015 the debt ratio in global markets, expressed in the euro, amounted to around 40%. The use of the euro keeps increasing also in view of billing and payment of invoices in international trade. Over 50% of imports and more than 65% of exports of the euro area are accounted for in euros.
Euro myths: think again
The introduction of the euro in Slovenia definitely contributed to larger price transparency and made easier the comparisons of prices with other countries using the same currency. In the first years after the introduction of the euro this also had an impact on the price rise and inflation. Thus, in 2007 and 2008 Slovenia had the highest inflation in the euro area, although in 2015 inflation turned into a 0.8% deflation. Compared to 2006, the prices in Slovenia in 2015 measured by the harmonized index of consumer prices (HICP), rose on average by 20.2% and in the EMU by 15.2%.
An overview of the prices of selected goods and services showed that some prices increased considerably in nine years, e.g. of a cup of coffee in a bar by 48%, of beer by 42% and of a woman’s haircut by 29%. In 2006 a cup of coffee in a bar cost on average 81 cents and in 2015 already EUR 1.20. For the average monthly net salary in 2006 one could buy 955 cups of coffee in a bar, but in 2015 only 844.
The introduction of the euro definitely also contributed to the decline in interest rates. The harmonised long-term interest rate for convergence assessment purposes in Slovenia decreased from 4.23% at the beginning of 2007 to 1.61% at the end of 2015.
Elimination of the costs due to currency exchange and currency risks, better integration of financial markets and the related easier access to capital and easier handling of international cooperation surely had an effect also on the volume of the Slovenian international trade and investments on the one hand, and travels of the population and the higher number of tourists in Slovenia on the other hand.
Compared to 2006, in 2015 Slovenia recorded an increase in the exports of goods (by 41%) and in the imports of goods (by 27%). In the same comparison also the number of overnight stays and arrivals of tourists increased considerably (by 34% and 58%, respectively). In 2015 the average monthly net salary in Slovenia was on average higher by 31% over 2006, and GDP per capita was higher by 19%. The increase in the value of certain indicators was particularly large in the first year and partly in the second year after the introduction of the euro.
Did you know that:
- so far Slovenia has issued eleven commemorative €2 coins;
- tolar coins can be exchanged in the Bank of Slovenia only until 31 December 2016, while there is no limit on the exchange of tolar banknotes;
- the inspiration for the euro symbol (€) was the Greek letter epsilon (Є), which is interpreted as a symbol for the first letter of the name of Europe in the Latin alphabet, while the two parallel lines represent stability;
- the windows and gateways on the front side of the euro banknotes are the symbols of the European spirit of openness and cooperation, and the bridges on the back are the symbol of communication between Europe and the rest of the world;
- in 2015 the banknotes for EUR 20 and EUR 50 were the most frequently counterfeited;
- a second series of euro banknotes, called Europe, has been put in circulation, but this series no longer includes the EUR 500 banknote.