(Repeats story from late Thursday)
* G7 should discuss strong euro
* Stimulus withdrawal should not be premature
By Marcin Grajewski
GOTHENBURG, Sweden, Oct 1 (Reuters) - Slovakia's economy
could suffer if the euro remains strong for too long, the Slovak
finance minister warned on Thursday, saying G7 officials should
discuss exchange rates when they meet this week.
Jan Pociatek also told Reuters in an interview that the euro
zone governments should not end their fiscal stimulus measures
prematurely, saying the timeframe for their withdrawal is likely
to be decided by the end of the year.
He said a strong euro had not so far hit Slovakia's
export-based economy, but it could if its current exchange rate
remain at its current level for too long.
"If it continues like that it will definitely hurt
exports," he said during a meeting of European Union finance
ministers in the Swedish city of Gothenburg.
The single currency has appreciated 4.35 percent against the
U.S. dollar so far this year, trading around 1.453 against the
greenback on Thursday afternoon. Many EU companies say the 1.4
exchange rate is a threshold of pain for them.
Asked if finance ministers and central bank governors of the
G7 group of the world's leading economies should discuss
exchange rates at their meeting in Istanbul over the weekend,
Pociatek said: "Definitely." He declined to elaborate.
Ex-communist Slovakia joined the EU in 2004 and adopted the
euro this year, crowning years of economic reforms that had
attracted many foreign investors and turned the country into a
major car producer.
Pociatek said the Slovak economy could suffer if big
European countries withdrew their stimulus measures too soon
"It is a very important issue for us since we are a very
open economy and its very important that growth is sustained in
our biggest trading partners," he said.
But he was confident this would not be the case after the
ministers discussed the issue on Thursday.
"They will not remove the stimuli if they feel they are
losing momentum," he said. "I think we have a clear picture
until the end of the year."
Governments have been pouring billions of euros into the
economy to battle the worst economic crisis since World War Two.
Slovakia will start fiscal consolidation next year, with the
2010 national budget envisaging a cut in the fiscal deficit to
5.5 percent of gross domestic product from this year's expected
6.3 percent.
Pociatek rejected suggestions from the Slovak central bank
that the cut should have been bigger, saying the country would
be ahead of many EU countries in reducing the deficit.
The gap should fall below the EU's ceiling of 3 percent of
GDP in 2012, he said.
"We are ahead of the pack, We think our effort is
significant and quite satisfactory," he said.
He added the Slovak economy would start growing in the first
quarter of 2010 after an expected 5.7 percent contraction this
year and expand around 2 percent in the whole of next year.
