Slovenia

The EU's formal announcement today of Solvenia's inclusion in the European currency fold may look like just another natural step in the direction of long-planned regional growth - and indeed this is exactly the kind of low-profile way EU party members want to make it appear - but the addition of the former Yugoslavian member state is one of the most significant moves in Europe in a long time. For a formerly volatile political hotbed, Slovenia's economy appears to be in remarkable shape: with a GDP per capita income of 12,000EUR at a real growth rate of 3.8% and with national deficits of less than 1.7% of GDP, the country has weathered only recently acquired independence better than most. This is partly due to exceptional trade relations with Europe, and partly due to the country's unique geographic positioning and fair natural resources: at the intersection between the Balkans, central Europe and the Mediterranean Slovenia has been able to benefit off increased European demand for raw materials, in particular raw material assembly on the cheap.

Most significantly for Europe, however, Slovenia posesses all the economic indicators that buck the negative macroeconomic trends the continent wishes to try and steer clear from as her transatlantic neighbours seem barely able to cope. Increasing privatisation in the country has led to a decline in inflation by two hundred basis points over the past two years (when Slovenia's acquisition of the European currency was first formally proposed), unemployment is falling sharply and privatisation of state assets is aggressively being undertaken with relative ease. In addition to this, Slovenia's unique cultural and political relationships with the Ukraine and Russia give Europe economic front-door access to investment in a wider oil-rich Eastern European economic region.

Most pertinent of all, however, is Slovenia's import and export market: with over two thirds of trade concentrated with mainly Germany, France and Italy, and just under 3% of trade with the United States, she makes for the perfect "New Europe" model.

EU legislators know that if they can only get another few "Slovenias" on board, they stand a chance at curbing global inflationary trends while simultaneously accessing growth markets in politically neutral ways; something Uncle Sam has never been able to fulfill in one sweep. The accession of the European currency in Slovenia is both significant and timely.