BRATISLAVA, June 28 (Reuters) - Slovak Prime Minister Robert Fico said on Saturday he wanted the conversion rate for swapping the crown for the euro in 2009 to be stronger than the unit's peg to the single currency in the pre-accession exchange rate grid.
Slovakia revalued the crown's central rate within the European Union's ERM-2 exchange rate mechanism by 15 percent to 30.1260 crowns per euro in May, following sharp gains of the local unit in the past few months.
The crown has stabilised after the revaluation as investors expect the actual switchover rate for the euro adoption to be set at, or very near the parity after talks between the EU and the government. The final rate will be announced on July 8.
'My idea is as strong a conversion rate as possible, which means people paying as few crowns for a euro as possible,' Fico said in a debate on Slovak Radio, echoing a long-held government stance.
'And, I would welcome if it was even less than the central parity, if the fixed rate was even less than 30.1260 (crowns per euro. But that is a subject for discussion,' Fico said.
Setting a conversion rate off the ERM-2 central level would differ from the practice used for previous euro zone newcomers and could provide an impulse for the crown to firm if investors took bets that Fico's desire can materialise.
Slovakia got the green light from EU leaders in June to become the 16th member of the single currency area.
Fico's leftist government had managed to cut the fiscal deficit and the country kept inflation low enough to qualify for the adoption of the euro despite global economic turbulences and pressure from surging oil and food prices.
Slovakia's euro zone accession, however, is flawed by opposition allegations that information about the ERM-2 parity revaluation had leaked from top state officials and that private equity firms made tens of millions of dollars in the resulting insider trading.
The government has rejected the leak allegations as ungrounded, but the central bank is examining unusually large amounts traded on the small local currency market shortly before the revaluation. (Reporting by Peter Laca) Keywords: SLOVAKIA EURO/RATE tf.TFN-Europe_newsdesk@thomson.com hjp COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
Slovakia revalued the crown's central rate within the European Union's ERM-2 exchange rate mechanism by 15 percent to 30.1260 crowns per euro in May, following sharp gains of the local unit in the past few months.
The crown has stabilised after the revaluation as investors expect the actual switchover rate for the euro adoption to be set at, or very near the parity after talks between the EU and the government. The final rate will be announced on July 8.
'My idea is as strong a conversion rate as possible, which means people paying as few crowns for a euro as possible,' Fico said in a debate on Slovak Radio, echoing a long-held government stance.
'And, I would welcome if it was even less than the central parity, if the fixed rate was even less than 30.1260 (crowns per euro. But that is a subject for discussion,' Fico said.
Setting a conversion rate off the ERM-2 central level would differ from the practice used for previous euro zone newcomers and could provide an impulse for the crown to firm if investors took bets that Fico's desire can materialise.
Slovakia got the green light from EU leaders in June to become the 16th member of the single currency area.
Fico's leftist government had managed to cut the fiscal deficit and the country kept inflation low enough to qualify for the adoption of the euro despite global economic turbulences and pressure from surging oil and food prices.
Slovakia's euro zone accession, however, is flawed by opposition allegations that information about the ERM-2 parity revaluation had leaked from top state officials and that private equity firms made tens of millions of dollars in the resulting insider trading.
The government has rejected the leak allegations as ungrounded, but the central bank is examining unusually large amounts traded on the small local currency market shortly before the revaluation. (Reporting by Peter Laca) Keywords: SLOVAKIA EURO/RATE tf.TFN-Europe_newsdesk@thomson.com hjp COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.