"Most of the new member states are within grasping distance of the euro. Smaller countries could adopt the common currency within two or three years, though the larger countries, including Hungary, may have trouble meeting even the 2010 deadline.""Supporters of the euro have fallen into a minority, according to Eurobarometer. Governments are committed to the switchover and are taking concrete measures to bring it about, but the broad support is dwindling. 37 per cent of 10,000 people surveyed in the new member states said they would welcome the introduction of the euro. 53 per cent would oppose the move.
Most people are aware of the practical benefits, but only 17 per cent of respondents would like to see the euro as soon as possible, and 46 per cent would like to have it postponed. The greatest concerns relate to the risk of inflation, but these fears outweigh optimism about the disappearance of exchange rate risk, the stability of the means of payment and easily comparable pricing. Opposition to a swift euro entry is strongest in precisely those three countries - Lithuania, Estonia and Latvia - which have the best chance of joining.
The opposition is explained by the fact that they only excaped the rubel zone at the beginning of the 1990s - they have not had enough time to enjoy their own national currencies. The two greatest enthusiasts are Slovenia (58 per cent support) and Hungary (49 pc).
This lack of support is not discouraging the governments of the ten new members from forging onward with preparations. They have no choice - the accession treaties commits them to introducing the euro at an unspecified date. To date, only Denmark, Sweden and the UK are exempt from this reqirement. Each of the ten - with the exeption of Poland -
set a target date after accession.
The smaller countries are sticking to the original timetable, despite the inflationary risks. Estonians, Lithuanians and Slovenes could be paying in euros as early as 2007. The two Mediterranean countries, Cyprus and Malta, seem likely to meet their self-imposed 2008 deadline. Latvia, which already meets three of the four Maastricht criteria, is likely to slip back a year, to 2008, because of the exceptionally high inflation that is the result of its high growth.
Slovakia has set a breathtaking reform pace in recent years. At the end of November, six months ahead of schedule, Slovakia followed the six countries mentioned above, becoming the seventh in joining the ERM-2 exchange rate mechanism, the 'anteroom' to the euro.
Countries have to remain inside ERM-2 for two years, their currencies moving no further than 15 per cent from their value at entry, in order to continue into the euro. Bratislava originally planned for a 2009 entry, which most analysts thought realistic.
But the centre-right government there, now in its second term of office, carried out a health and pension reform, imposed fiscal discipline and attracted foreign investment, all of which has brought about a dramatic improvement in the key macroeconomic indicators.
This has given the government an incentive to speed up - with added impetus given by the desire to confront the populist opposition leader Robert Fico, who wants a euro delay, with a fait accompli.
The three largest states are the problem cases. The Czech Republic, Poland and Hungary are likely to be the last of the countries to adopt the euro, in 2010 or later. Both economics and politics are to blame.
The Czech Republic is closest to meeting the criteria, with only the budget deficit posing problems.
The Hungarians' chances are affected by impending elections. Expecting budget discipline ahead of an election campaign is unrealistic.
Furthermore, the indicators do not currently meet a single one of the Maastricht criteria. Fitch Ratings recently said that a four-year delay was possible. But the government has not given up hope, and the Finance Ministry promises that the deficit will be cut down, and all the criteria will be met in time.
Nothing is clear in Poland. The minority conservative government that came to power in November has not set a deadline for euro entry. As Kazimierz Marcinkiewicz, the prime minister, recently said: first they intend to meet the economic criteria, then they will take a decision.
But first, they want to ask the voters' opinion in a referendum. But, since they plan to enter ERM-2 in 2009, then 2011 is the earliest possible date for adopting the euro."
Source: hvg
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30.12.2005