Bratislava – Slovakia’s entry into the European Union (EU) and the eurozone has provided the nation with economic stability, an improved standard of living, security, and the freedom to move across borders. Since becoming an EU member in 2004, Slovakia has benefited from over 24 billion euros in funding aimed at facilitating development across various sectors. In light of this, the Slovak Banking Association (SBA) has expressed serious concerns regarding discussions around Slovakia potentially exiting the EU, deeming such a move incredibly perilous, as it could have catastrophic repercussions on the economy, according to TASR.
The SBA warns that leaving the EU would likely trigger economic turmoil, instability, a sharp depreciation of the currency, soaring prices, and a decline in living standards. “Furthermore, the non-economic repercussions of Slovakia’s departure from the European community could be severe. These include drifting away from European values, a slowdown in economic convergence, and diminished opportunities for youth to study or work abroad. The situation in Great Britain serves as a clear warning about the instability and disruption that could follow such a decision,” stated Daniel Kollár, president of the SBA, in a press release on Tuesday.
The association also highlighted estimates from the National Bank of Slovakia (NBS) that suggest Slovakia’s EU membership yields annual benefits of around 4% of the gross domestic product (GDP) through direct payments, indirect economic gains, and reduced debt servicing costs. In monetary terms, this equates to approximately 830 euros per person each year. The NBS report indicated that Slovakia’s economy is highly open, allowing it to reap significant advantages from the EU’s single market, with long-term benefits estimated at around 15% of GDP.
Furthermore, any departure from the EU would necessitate exiting the eurozone and abandoning the euro, the association warned. They cautioned that reverting to a national currency could lead to a significant decline in its value and the onset of high inflation, adversely affecting the purchasing power and quality of life for Slovaks. “In response to rising inflation, the central bank would likely raise base interest rates, resulting in increased loan costs and negatively impacting investment in the corporate sector,” the SBA assessed.
“Given these potential negative consequences, which could prove disastrous for our nation, the SBA urges participants in public discussions regarding Slovakia’s possible withdrawal from the EU or eurozone to refrain from continuing such dialogues without a foundation of factual information and awareness of the potential outcomes. It is crucial that citizens of Slovakia, who are also banking clients, are fully informed about the serious economic and business risks associated with this scenario,” Kollár added. (February 4)
Leave a Reply