Entry to the Eurozone – Slovenia Mojca Maček Kenk, Head of CPI/HICP Department

Introduction of the euro in Slovenia

Criteria for the introduction of the euro A low inflation rate Sound public finances Low interest rates Stable exchange rates

Fulfilling the inflation criteria

Organisation of transition implementation - government Programme for ERM II Entry and Adoption of the Euro Masterplan for Introduction of the Euro Masterplan for the Euro Changeover Communication Strategy on the Introduction of the Euro Change of legislation:  Euro Adoption Act  The Act on Dual Display of Prices Document: Euro price code The government commitment to preclude price rises

Organisation of transition implementation - SORS In May 2005 appointment of the project group for euro adoption at the Statistical Office of the Republic of Slovenia Preparation of project documentation Euro website ( ), which is linked to the general website Appointment of the subgroup for prices Signing of the co-operation agreement between SORS, the MINISTRY OF THE ECONOMY and the SLOVENE CONSUMERS’ ASSOCIATION

Organisation of transition implementation - Slovene Consumers’ Association Pricewatch (104 goods and services in the basket): from February 2006 the pricewatch is conducted every three months in every region in Slovenia Euro website ( ) and consumers europhone: common point where consumers can report noted price rises In the middle of December they started to publish a “black list” of providers of goods and services that increased prices by more than 6 percent Regular press conference where they report their results

Organisation of transition implementation Organisation of transition implementation – SORS: PRICES From April 2006: preparation and publication of additional analyses From May 2006: personal inflation calculator From December 2006: informative conversion of prices into euro 29 December 2006: detailed presentation of December data at a press conference 10 January 2007: release of special Rapid Reports 9 February 2007: detailed presentation of January data at a press conference

Additional analyses about price movements The analyses of price changes in individual months focused on three aspects: Detailed list of subgroups of goods and services in which changes in prices had the greatest impact on the total inflation rate. Detailed list of subgroups of goods and services with the greatest price deviations compared to the average of the past five years. At the end of each quarter a list of subgroups of goods and services with the greatest price deviations compared to the same period in the past five years.

The treatment of the changeover to euro in the CPI/HICP with the index for January 2007 We followed Eurostat recommendations: Until and including December 2006 prices were collected in national currency. From January 2007 on prices are collected in euros. Euro prices in January 2007 were compared directly to the reference prices (December 2006);  for conversion the official conversion rate was used and these converted reference prices were rounded to five decimals.

Monthly rate of change in December,

Monthly rate of change in January,

Subgroups of goods and services the prices of which had the greatest impact on inflation in December 2006 and January 2007 (in percentage points)

Subgroups where the monthly price increase in December 2007 was higher than in the previous years in December (in %) Impact in December 07 in percent. points Services in restaurants and cafes Repair of household equip Computer equipment Out-patient services Personal services Repairs of equipment and accessories

Subgroups where the monthly price increase in January 2007 was higher than in the previous years in January (in %) Impact in Janury 07 in pts Recreational and sport services Personal services Footwear services Repair of household equip Services in restaurants and cafes Repairs of equipment and accessories Services related to means of transport

Espresso in restaurants, cafes Rice, medium grains (kg) Quality wine in restaurants (l) Hair cutting for men 2007

Impact of the changeover on inflation: (According to our Statistical Office and the Slovenian Institute for Macroeconomic Analysis and Development-IMAD) No general rise in prices due to euro adoption Most rises in prices related to euro adoption happened in December 2006 and January 2007 Due to euro adoption higher prices of services in hotels and restaurants and some other services According to first estimates from IMAD, the total effect of euro adoption on prices was about 0.24 of a percentage point

Contributions to inflation of price rises related to the euro changeover in Slovenia December 2006 January 2007 February 2007* Total* Other services Services in restaurants and cafes Total Note: *Estimated value. Source: SORS; calculations IMAD.

Conclusions: Good and timely preparation on global level is very important Good co-operations between all institutions connected with prices and inflation Distribution of work among them