Books on Slovakia
% of GDP
In 1918 the Slovaks joined the closely related Czechs to form Czechoslovakia. Following the chaos of World War II, Czechoslovakia became a communist nation within Soviet-ruled Eastern Europe. Soviet influence collapsed in 1989 and Czechoslovakia once more became free. The Slovaks and the Czechs agreed to separate peacefully on 1 January 1993. Historic, political, and geographic factors have caused Slovakia to experience more difficulty in developing a modern market economy than some of its Central European neighbours.
Update No: 086 - (30/06/04)
Lowest EU electoral turn-out
The Slovaks acquired a dubious distinction in the elections to the European parliament, that of recording the lowest turn-out at 16.9%. The turn-out was generally low among the 10 new adherents, only 21.2% in Poland and under 30% in Estonia, the Czech Republic and Slovenia.
This should come as no great surprise. In democracies people vote against the powers that-be rather than for any opposition forces. None of these countries has been inside the EU for long enough for them to have a coherent view of what they think of it yet. If turn-out is as low next time round, then will be the time to worry.
In Slovakia's case anyway special factors obtained. Three other nationwide ballots had been held in the country since the end of April. Presidential elections were held on April 3rd and 17th and an unsuccessful referendum on holding an early general election was held on April 3rd.
The campaign was agreed on all sides to be lacklustre. What could be more tedious than debating the new EU constitution? The most striking thing to emerge for Slovaks struggling to make ends meet was the size of MEPs' salaries. Another talking shop for the rich and powerful was their verdict.
Ruling parties do well
The other remarkable thing about the elections was that the governing parties in the four-member coalition did well, in contrast to the general pattern elsewhere. Three of the four won eight of the 14 contested seats, while the two opposition parties won three apiece.
This was particularly galling for Smer, the opposition party led by Robert Fico, which according to pre-election polls had been on course to win up to five seats.
The explanation for this anomaly perhaps lies in the fact that the economy is doing well. Slovak analysts are surprised and naturally pleased that the latest figures point to a buoyant economy.
GDP rose by 5.5% in the first quarter, the best result for six years. Foreign demand was the main source of growth. But domestic demand is also growing strongly, without stoking up inflation so far, but presenting the central bank with a dilemma. Should it raise interest-rates to ward off inflationary perils or let the boom run its course? Success itself brings its own problems.
SLSP nets 770m crowns in Q1
Slovenska sporitelna (SLSP), Slovakia's biggest bank, posted a consolidated net profit of 770m Slovak crowns to international financial reporting standards (IFRS) in the first quarter of 2004, down from 997m crowns in the same period last year, according to figures released by the bank recently, New Europe reported recently.
The bank attributes the decline to a one-off release of adjustments by the Prva stavebna sporitelna (PSS) building society, whose results were included in the consolidated figures.
Central bank hikes 2004 GDP forecast to 4.1%
The National Bank of Slovakia (NBS) has revised its gross domestic product (GDP) forecast for 2004 upwards from 4.0% to 4.1%, NBS Governor Marian Jusko announced. The central bank said domestic demand will be the prime factor behind Slovakia's GDP growth, New Europe reported recently.
"The NBS expects renewed growth in real wages and postponed consumption from 2003 to result in a revival of private consumption despite lasting effects of administrative steps on demand," the CTK news agency quoted Jusko as saying. The central bank also expects a revival in investment demand, mainly due to the influence of foreign investment inflow to the Slovak auto industry, Jusko said.
The NBS has also narrowed its expected inflation band for this year from 5.5-7.3% to 5.7-7.0%. The central bank has also revised its current account deficit estimate down by nearly half to 1.2% to GDP, thanks to favourable foreign trade results.
The revisions take into account economic and exchange rate development from the first months of this year as well as the latest information on investment activities, energy and raw material prices and fiscal deficit estimates.
SE sees profit up 5-fold in 2003, sale delayed
Slovakia's biggest power producer Slovenske elektrarne (SE) posted a net profit of 1.31bn Slovak crowns in 2003, up from 234.91m crowns the previous year, according to unaudited figures released by the firm, New Europe reported recently.
SE's sales were up 6% year-on-year to 55.59bn crowns. Gross profit was up 45% to 1.49bn crowns, while the firm's total costs rose 4% to 54.28bn crowns.
The Slovak government is currently in the process of selling a 66% stake in SE. Five investors have reportedly expressed interest in the firm, including the dominant Czech power producer CEZ. The Slovak government has extended the deadline for submitting binding bids for a majority stake in SE from mid-June to July 21st. The delay is designed to let the government comment on some problems, notably the financing of nuclear facilities in the future, according to Peter Mitka of privatisation advisor PricewaterhouseCoopers.
According to Slovak Economy Minister Pavol Rusko, time is needed for an analysis suggesting different privatisation scenarios depending on the future costs of the company, which remain unclear. SE has come up short in payments to the state fund for the liquidation of nuclear energy equipment and the handling of spent fuel and radioactive waste, CTK said. The company has begun paying money to the fund, but on a delayed schedule. Other problems faced by the firm include the planned shutdown of the V-1 nuclear power plant in Jaslovske Bohunice, the completion of the third and fourth units of the Mochovce nuclear power plant, and loans amounting to billions of crowns. Five foreign firms have expressed interest in SE, including the dominant Czech power producer CEZ. Most of the interested parties want both SE's conventional and nuclear power production units.
Under the terms of the tender, investors may bid for the firm as a whole or its conventional energy sources alone. SE runs three nuclear power plants, two thermal power stations and several hydroelectric plants.
Slovnaft hikes Q1 net to 1.8bn crowns
Slovnaft, Slovakia's biggest oil producer and fuel distributor, posted a net profit of 1.85bn Slovak crowns to international financial reporting standards (IFRS) in the first quarter of 2004, an increase of over 30% from the same period a year earlier, according to figures released by the firm recently, New Europe reported recently.
Slovnaft's first quarter sales slid, however, falling 12.7% in the monitored period to 15.7bn crowns. "The results for the first quarter are the results of a constant increase in the efficiency of our operations, ongoing cost-cutting, and synergies achieved thanks to partnership with (Hungarian oil and gas concern) MOL," the firm's CEO Vratko Kassovic said.
Slovnaft's first quarter operating profit rose to 2.27bn crowns, up from 1.8bn crowns in the first quarter 2003. Earnings before interest, taxes, depreciation and amortisation (EBIDTA) were up 10.5% year-on-year to 3.02bn crowns. In dollar terms, EBITDA was up 31.6% to US$93.1m. The firm attributes the rise in operating profit to a higher margin on the purchase and selling price of gasoline. In addition, Slovnaft released 115m crowns in reserves in the first quarter.
Zentiva ups stake in Slovak unit
Dutch pharmaceuticals maker Zentiva recently raised its stake in the Slovak pharmaceuticals firm Zentiva Hlohovec from 85.30% to 88.57% in a mandatory buyout, the CTK News Agency reported.
Zentiva acquired a total of 52,968 shares or 3.27% from small shareholders at 1,350 Slovak crowns per share. The buyout offer came after a decision by shareholders at the firm's general meeting in March to de-list the company's shares from the Bratislava Stock Exchange (BCPB). The decision will see the Slovak capital market lose one of its most frequently traded shares, and follows the departure of the steel giant VSZ from the market last year. Zentiva Hlohovec emerged in 2003 when the Dutch company Zentiva acquired the biggest Czech and Slovak pharmaceuticals firms Leciva and Slovakofarma.
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