So, just four years after accession to the EU, Slovakia is to become the first truly eastern European country to join the eurozone. (I don't count Slovenia as it is in a wholly different category).

This is a remarkable advance for a small country that has furiously struggled to transform its economy, lumbered as it was by the legacy of a heavy industrial communist past. But in a handful of years it has gone from a creaking centrally planned economy to a free market. And an economic powerhouse at that - with record GDP growth and a huge motor manufacturing centre

Slovakia is ready to join the euro at the beginning of next year, says the European Commission.

The ECB - which acts as an advisor on new euro members - says it's somewhat concerned about inflation in Slovakia, but entry is now almost certain.

"Slovakia has achieved a high degree of sustainable economic convergence and is ready to adopt the euro on Jan. 1, 2009," Joaquín Almunia, the European Union's commissioner for monetary affairs, said in Brussels.

Testament then to the policies of a flat tax rate, big cuts in public spending and proactive policies to attract specific FDI (car manufacturing), which in turn attracts huge ancilliary investment, not just to this country, but to neighbours - notably Czech, especially the area around Ostrava / Frydek-Mistek, where the current PS deal, Walker House, is located.

For the giant companies that see this region, and Slovakia in particular, as their main European entry point - and we're talking big big names - including Volkswagen, Toyota, Hyundai and Kia plus electronics giants Sony and Samsung - the advantage of the euro - the currency used by Europe's largest economies (exc the UK) is obvious.

So, will this euro move equate to even stronger investment and growth in this Slovakia/Czech region? It seems highly likely AND therefore is excellent news for property market growth in this area.

Has to be good news. It's a much more stable economy than some in the region so this vote of confidence must help to attract more FDI. Many thought that Euro entry would bring membership of the Euro very quickly for these economies but most and many years off joining.

It would be really interesting to hear an economist's view on why the differences between the various countries in this respect. After all Slovakia has huge rates of growth but relatively low inflation, in contrast to many other CEE economies.
Huw

Hi Robin,

I know a fair bit about Slovakia, but next to nothing about Slovenia, so I'd be interested to know why you say 'it is in a wholly different category'.

Hi Minsk

What I really mean is the fact that Slovenia is a whole lot richer than its fellow CEE countries that joined the EU in 2004. More like, in fact, the EU average rather than those CEE countries, like Sovakia, that are racing to catch up with the West and have had to undergo huge economic transformations.

Cheers