S&P expects positive for Slovak Republic

Standard & Poor's said it expected a positive recommendation for the Slovak Republic's (A/positive/A-1) application to the Eurozone in the European Commission's Convergence Report to be released on May 7.

The agency said that the current rating and outlook incorporates its expectation that Slovakia will join the Eurozone by 2009.

A negative recommendation that delays the accession date would have immediate negative implications on the Republic's credit ratings, the agency noted.

An upgrade of Slovakia depends on continued fiscal consolidation after Slovakia enters the Eurozone, a path the government has committed to, S&P said, adding that reform of the social security system and labor market that ensures sustained, strong and balanced economic growth could close the wealth gap between Slovakia and other countries in the Eurozone, leading to further improvement in the ratings.

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