_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ narodna banka slovenska communication section closing remarks by mr ludovit odor, deputy governor of narodna banka slovenska at the conference 10 years of the €uro in slovakia international conference to mark the 10th anniversary of the introduction of the euro in slovakia bratislava, 11 january 2019 ladies and gentlemen, let me begin by thanking all the conference speakers and participants for frank and lively discussions. usually at such anniversaries everybody says everything is fine and the future is bright, but these discussions were really balanced, and i liked that. we talked about opportunities, but also about some possible problems in the future. i will try to summarise the main messages from my point of view. the first issue is the euro itself. when talking about the euro, we heard that it ’ s not just an economic concept, but also a political project. some called themselves proud members of the euro area. so, it ’ s not just about economic numbers. if we look back at the things said before the creation of the euro, they included some very pessimistic projections. for example, milton friedman gave it ten years at the most. other voices, however, were very optimistic about the common currency. they expected a huge increase in trade and an endogenous convergence effect. they said that while the euro area may not be the best or an optimal currency union, once countries joined it, they would endogenously converge towards each other. today, after twenty years, we see something in between these opposite views. turning to the euro adoption strategy, it was made clear in the presentations that the strategy in slovakia was very ambitious. when the central bank and finance ministry began talks on this issue in 2003, we were light years away from fulfilling all the maastricht criteria. in the end, the decision to seek euro adoption was a good one and the timing of the adoption was also excellent. of course, we were lucky to some extent, but that ’ s part of life. as regards the strategy, it was noted today how slovakia benefited from the euro even before adopting it. euro preparations acted as a catalyst for structural reforms and public finance consolidation

real unit labour costs is even more favourable for foreign investments. slovakia offers the lowest labour and production costs among v4 countries. this low labor and production costs have roots mainly in the character of labor market and features of unemployment, which is still, in spite of down - sloping trend, one of the highest in the region. however, availability of this workforce, which is relatively skilled, represents another advantage. industrial restructuring and transformation have led to a high level of redundancy of skilled labor force. stateowned heavy industry and weaponry, running before 1990, were liquidated or went bankrupt. after the period of low foreign investments until 1999, job creation dropped into red numbers. this trend has been reverted after 2000 ; however still large numbers of industry oriented skilled workers mainly in central and eastern parts of the country are searching for job opportunities. 6. legislative investment incentives the trend of introducing legislation that favors foreign direct investments has been gradually approved since 1999. the parliament had approved several major acts ; the main goal of is to stimulate foreign direct investments to slovak economy. the main acts, as follows, create the baseline to the motivation of foreign direct investments be placed in slovakia. the investment incentive act no. 565 / 2001 deals with state support in forms of : • initial investments to tangible and intangible assets • subsidies for newly created job opportunities ( up to usd 4. 000 ) • subsidies for re - qualification of employees hired to newly created job opportunities ( up to 230 usd ) industrial park development support act no. 193 / 2001 is another important basic investment incentive, which deals with community subsidies for : • technical facilities and infrastructure up to 70 % of total costs • land purchase costs up to 70 % of total costs • land rental costs up to 70 % within next 10 years to the community ownership or community disposal to the use of the developer. all customs and import duties on new machinery employed in production have been canceled, well before the adoption of free movement of good, when this issue will become automatic. all these and other allowances even more support all the points that make an investment in slovakia even more attractive. 7. rating improvement all the features discussed and measures taken in the scope of slovak economic development mirror in the continuous improvement of rating by all major rating agencies. standard & poor ’ s moody ’ s fitch assignment rating assignment rating assignment rating date ( fcy / lcy ) outlook date ( fcy / lcy ) outlook date ( fcy / lcy ) current rating current rating