BRATISLAVA Slovakia joined the euro on Thursday, hoping that membership of the single currency will soften the blow of the global financial crisis and bring about greater economic convergence with richer European Union states.
Slovakia left behind other, bigger east European nations -- Poland, Hungary and the Czech Republic -- and will likely be the region's last euro entrant for some time given the present financial turmoil.
"We are saying goodbye to the Slovak currency, with which we have developed strong emotional ties," Prime Minister Robert Fico said shortly before he withdrew 100 euros from an ATM at the parliament building.
"We are losing part of us, part of our identity... But, in the world of an economic crisis, the euro is boosting self-confidence of Slovak people," Fico said.
Like the EU's other eastern capitals, Bratislava has traded drab communist-era facades for flashy restaurants and high-end boutiques since joining the bloc in 2004. But Slovakia's 5.4 million people will be the poorest in the euro club, with gross domestic product per capita of 71 percent of the EU's average.
However, many Slovaks see the single currency as a source of pride, hoping it will bring economic growth and help the country catch up with the older EU states.
"It's beautiful, I feel even more European now," said Ivan Decman, 27, celebrating in Bratislava under fireworks blending with displays of euro signs on large TV screens.
Joining the euro has capped a decade of transformation for Slovakia from central European laggard to an EU growth leader.
Its economy expanded 10.4 percent last year. Next year, the government sees growth exceeding 4 percent despite recession in big euro zone states such as Germany and Britain.
The fast economic growth, stimulated by the reforms of the previous centre-right government, has helped leftist Prime Minister Robert Fico cut budget deficits while boosting welfare spending.
Slovakia has avoided major damage from the financial crisis, although its $100 billion (69 billion pound) economy will be hit by weaker demand for the cars and TV sets produced at the scores of new factories set up by foreign firms in a decade of booming investment.
Slovaks had for long feared that the euro would mean higher prices for goods and services, as seen in previous newcomers, such as Slovenia in 2007.
Opinion polls show Slovaks still worry about a spike in prices, but they have become more enthusiastic about the single currency since the financial crisis rocked their emerging market neighbours.
The crown is the only unit in the region that has not weakened against the euro since its exchange rate was locked in at 30.126 against the single currency in July.
In comparison, Poland's zloty lost 30 percent per euro and Hungary's forint 15 percent. The Czech crown is down 12 percent.
(Reporting by Peter Laca; Editing by Matthew Jones)
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