yves mersch : tenth anniversary of the euro in slovakia speech by mr yves mersch, member of the executive board of the european central bank, at the international conference to mark the tenth anniversary of the introduction of the euro in slovakia, bratislava, 11 january 2019. * * * accompany charts of the speech. i am honoured to be in bratislava today and to speak before such a distinguished audience. this conference marks the tenth anniversary of the euro in slovakia, which in fact is a double anniversary as it coincides with twenty years of the euro. what could be a better anniversary gift, or a clearer symbol of the vitality of our single currency, than slovakia ’ s success since the introduction of the euro on 1 january 2009? slovakia has achieved an impressive real convergence of living standards towards the eu average. the key ingredients of this success have been the country ’ s willingness to grasp the opportunities offered by eu membership and the adoption of the euro. indeed, on the economic side fundamental institutional reforms allowed slovakia to transition to a vibrant market economy and adopt a highly successful export - led growth model, which underpinned real convergence. reforms rather than continued devaluation or requests for financial assistance is the recipe for success. nevertheless, this should be no reason for complacency, as the next stage of convergence is bound to be harder. neither eu membership nor the single currency offer an “ autopilot ” for strong economic growth. i will therefore argue that relentless efforts in the pursuit of institutional quality and good governance are essential in order to raise the country ’ s long - term growth capacity. the drivers of slovakia ’ s success within just three decades, slovakia has made a remarkable economic transition from a centrally planned economy to a market economy that is closely integrated into the single market. the significant efforts made during the transition have clearly paid off. having all but doubled since the early 1990s, slovakia ’ s real gdp per capita stands at just over 80 % of the eu average. 1 equally impressive has been the pace of economic convergence, which exceeded expectations based on the initial level of slovak national income. 2 slovakia has managed to achieve a per capita gdp level above that of most other countries in central and eastern europe ( cee ), and close to catching up with that of slovenia and the czech republic ( chart 1 ). much of this success is rooted in the country ’ s remarkable institutional transformation in the context of joining the eu. slovakia ’ s accession to the eu gave momentum to its convergence efforts and

in geopolitical tensions and the impact of the reopening of china's economy on commodity prices, ( 2 ) the evolving transmission of tighter monetary policy, both globally and in ireland, ( 3 ) the dynamics between profit margins, wages and prices, and ( 4 ) the persistence of the imbalance between aggregate supply and demand conditions in the economy. restoring price stability is a necessary part of creating the conditions for macroeconomic stability. the societal costs of high and unstable inflation are very high. through achieving price stability, monetary policy creates an environment in which firms and households can make the longer - term plans and investment decisions that generate the innovation and productivity that ultimately drives growth and prosperity. with euro area inflation projected to remain too high for too long, the ecb's governing council has continued raising policy rates, most recently by 50 basis points last week, to ensure a timely return of inflation back to its 2 per cent medium - term target. looking ahead, in the context of high uncertainty, the ecb's governing council will take a data - dependent approach to policy rate decisions, which will be determined by the 2 / 4 bis - central bankers'speeches governing council's assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation, and the strength of monetary policy transmission. turning to the public finances, the general government balance ( ggb ) is estimated to have moved from a deficit of 3 per cent of gni * in 2021 to a surplus of 2. 3 per cent last year. this reflects strong growth in tax revenue generally, but particularly so in terms of corporation tax receipts, which almost doubled in just two years and overtook vat as the state's second - largest tax head. exchequer data for the opening months of 2023 remains favourable and, despite the more moderate pace of economic growth this year, the gg surplus is forecast to increase to 2. 7 per cent of gni * ( €7. 8bn ). a further improvement in the ggb is expected over the medium term. this reflects the fact that the remaining temporary spending – linked to cost of living measures and humanitarian supports – is expected to wind down, leading to a surplus of 4. 8 per cent of gni * ( €15. 8bn ) projected in 2025. the general government debt ( ggd ) ratio is projected to decline in the coming years but to remain elevated. having increased to just under 110 per cent