Policies to smooth the path to euro area accession

September 2005
OECD Economic Surveys: Slovak Republic;Sep2005, Vol. 2005 Issue 16, p49
Country Report
Country Report
Although Slovakia is making good progress towards fulfilling the Maastricht criteria for accession to the euro area, the challenges posed by the "impossible trinity" suggest that risks still remain. Recent fiscal and inflation outcomes have been good and the strong appreciation pressures on the koruna have recently abated. However, the risk of excessive exchange rate appreciation combined with a rebound in inflation cannot be eliminated, along with the risk of insufficient fiscal consolidation. A number of policy guidelines are proposed to minimise these risks and to underscore the credibility of Slovakia's commitment to structural reform and prudent macroeconomic management.


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