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LJUBLJANA, Slovenia (Reuters) -- Slovenia adopted Europe's single currency, the euro, on Monday, crowning its 15-year transition from a republic in socialist Yugoslavia to the continent's most advanced post-communist economy.
Many feared price hikes after wealthy Slovenia, which lies just south of Austria, became the euro zone's 13th member, in its first expansion since the currency was introduced in 2002.
None of nine other countries that joined the European Union with Slovenia in 2004 are likely to adopt the euro before 2009.
Finance Minister Andrej Bajuk withdrew 100 euros ($131.90) from a cash machine at Slovenia's largest bank, NLB, in downtown Ljubljana shortly after the midnight switch.
"I am happy although there is some nostalgia for the tolar. But this is a great opportunity for our country and we can be proud that we belong to this exclusive club," said Bajuk.
But Nina Peskar, a 20-year-old student from Ljubljana, summed up the mixed feelings of many Slovenians.
"I look forward to the euro because it will make travel abroad easier but at the same time I'm afraid prices might go up," she said while celebrating on the capital's packed main square, lit by a laser sign beaming: "The Euro is Coming".
Officials said the first hours of euro adoption passed smoothly. More than 92 percent of cash dispensers, which had stopped working three hours before midnight to allow time for the switchover, were operating again by 4 p.m. (1500 GMT).
"I want to congratulate the Slovenian authorities and all the people involved in the changeover operation," European Monetary Affairs Commissioner Joaquin Almunia said in a statement, urging Slovenians to watch out for price rises.
No problems
Card payment terminals in shops and restaurants were back in business only one hour after the midnight switch.
"The transition process is normal, the use of cash machines is moderate, payments with credit cards are taking place as usual," Central Bank Governor Mitja Gaspari told a news conference on Monday afternoon.
"There is absolutely enough euro cash available, we expect that most of the cash in tolars will be out of circulation in the first week of transition," said Gaspari, who will now be a member of the European Central Bank's Governing Council.
Slovenians can pay in tolars until Jan. 14 while banks will continue exchanging them free of charge until March 1.
More than fifty banks opened on Jan. 1 and 2, both public holidays, to exchange tolars but no queues were reported.
"We have to see how things go on Wednesday, the first working day when the system will be operating fully, but we expect no major problems," Bajuk told reporters and urged citizens to remain vigilant about price hikes.
"We have to remain attentive and be careful on how we spend euros in the following days, weeks and months. Shopping has to be done carefully so that we can control prices," Bajuk said.
A recent opinion poll showed about 40 percent of Slovenians fear prices will rise on account of the euro.
Slovenia, whose declaration of independence from the crumbling Yugoslav federation prompted a 10-day war in 1991, is now the wealthiest of the EU's ex-communist newcomers.
Gaspari, who had steered Slovenia's efforts to meet the euro entry criteria in the past six years, was the first official to exchange tolars into euros at the central bank shortly after midnight, flanked by his deputies who toasted with champagne.
"This is the first year with the euro in Slovenia and I wish the euro good luck for many years to come," he said then.
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Location of Slovenia in Europe.

On January 1 2007, Slovenia officially joined the  and adopted the  as its new official currency. At the same time, , which were available as a "starter kit" from December 15, became legal tender everywhere in the Eurozone.

A period of dual circulation, when both the former currency, the  and the euro will be accepted, will only last until January 14. All banks are going to exchange tolars into euros at the official rate of 239.64 SIT per 1 EUR at no commission until March 1, 2007. After that date it will be possible to exchange tolar banknotes (unlimited) and coins (until 2016) only at the Bank of Slovenia.

Most  already dispense euro banknotes with the rest to follow in the following days. Commercial banks automatically converted all tolar accounts into euros and online banking systems will be accessible to their users again on January 3. Even though January 1 and 2 are non-working days in Slovenia, many banks will be opened from 10:00 to 14:00 on both days, available only for one service: exchanging tolars to euros and larger euro banknotes into smaller units.