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SLOVAKIA

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Area (sq.km) 
48,845

Population
5,430,033 

Capital 
Bratislava 

Currency 
Koruna 

President 
Ivan Gasparovic

Private sector 
% of GDP
60%

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Update No: 088 - (27/08/04)

Minority government 
Since October 1998, Mikulas Dzurinda of the Slovak Democratic and Christian Union (SDKU) has led a coalition government that included the Christian Democratic Movement (KDH), the New Civic Alliance (ANO) and the Party of the Hungarian Coalition (SMK). Dzurinda won a second term as prime minister in September 2002. But he heads a minority government. 
The opposition Party Direction - Third Way (Smer) is the top political organization in Slovakia, according to a poll by OMV released by Slovak Radio. 25.4 per cent of respondents would vote for Smer in the next parliamentary election.
In February, outgoing president Rudolf Schuster ordered a referendum after Smer, the Slovak Communist Party (KSS) and the Slovak Trade Unions Confederation (KOZ) gathered more than 600,000 signatures to review the possibility of holding an early parliamentary ballot. Turnout for the Apr. 3 plebiscite was 35.86 per cent, well short of the required 50 per cent.
On Apr. 17, Ivan Gasparovic was elected president in a run-off over Vladimir Meciar of the Movement for a Democratic Slovakia (HZDS). This sees off the longstanding bugbear of Slovakian politics, doubtless for good.
The next parliamentary election is tentatively scheduled for Nov. 2007.

A liberal party for Slovakia?
Despite the liberal outlook of many Slovaks, there is no truly liberal party in the country. A number of different parties have tried to champion liberal causes. However, a new party at each election seems to have become the norm for the non-conservative, non-nationalist, non-communist and non-clerical voter.
In the 1990 general election, the first free elections after decades of communist oppression, victory went to Public Against Violence (VPN) - a widely popular, but greatly heterogeneous ensemble of revolutionaries, dissidents, 'reformed communists' and liberal intellectuals. The party gained nearly a third of the 150 seats in the Slovak legislature.
Inner disputes within VPN, initially silenced by the euphoria characteristic of revolutionary times, gradually came to the surface. In 1991, a power-struggle led to a large portion of its members under Vladimír Meciar leaving to found the Movement for a Democratic Slovakia (HZDS). Meciar was the man whose undemocratic governing methods later led Slovakia into international isolation and brought its integration ambitions to a halt.
In the 1992 elections the HZDS enjoyed a crushing victory, just two votes short of gaining a majority in the Slovak parliament. At the time, Meciar was at the apogee of his popularity and was the man of choice for even many liberally-oriented voters.
As Meciar's autocratic and totalitarian tendencies duly came to light in the years to follow, other parties that made it into parliament in those elections definitely seemed less attractive.
There was the conservative Christian Democratic Movement (KDH), the socialist Democratic Left Party (SDL), the nationalist Slovak National Party (SNS) and a coalition of right-wing Hungarian parties.
By the 1994 preliminary elections the true face of Meciar had become clear to most liberals and supporting him was no longer an option. Instead the Democratic Union (DÚ) seemed a feasible alternative.
The DÚ was formed by HZDS renegades who, in the spring of 1994, staged an internal coup in the party leading to the collapse of Meciar's government and to the creation of an interim administration headed by DÚ boss Jozef Moravcík.
The DÚ did gain 15 seats in parliament in the elections in the fall of 1994, but Meciar's HZDS emerged victorious taking 61 parliamentary seats.
The HZDS formed a ruling coalition with the nationalist SNS and the ultra-left Union of Slovak Workers, which ran the country until parliamentary elections in September 1998.
The primary aim of those elections was to oust Meciar from office. Six parties besides the HZDS made it to parliament that time around.
Two of them had a clear ideology - the leftist SDL, and the nationalist SNS.
In addition, there was the centrist and ideology-free Civic Understanding Party, formed shortly before the elections by future president Rudolf Schuster, and the Hungarian Coalition Party (SMK), a union of Christian Democrats, liberals and nationalists.
Finally, there was the Slovak Democratic Coalition (SDK), which in many ways resembled the VPN of the early 1990s.
It was a coalition of Christian Democrats, the liberal DÚ, many of whose members were former communists, and the politically less influential conservative Democratic Party (DS), the Greens, and the Social Democrats.The eclectic combination was a natural result of the Meciar threat and his tough election legislation, and was the best choice for Slovak liberals at the time.
The SDK finished second in the election race, but since the victorious HZDS proved unable to form a ruling coalition, the task of forming a government was left up to SDK leader Mikuláš Dzurinda, and the SDK in effect became the strongest political force in the country.
However, the SDK followed VPN's fate and its shaky ideological foundations crumbled under the weight of power.
One part of the KDH withdrew from the political union, and another, headed by PM Mikuláš Dzurinda and his long-term political ally, joined forces with the DÚ and formed the Slovak Democratic and Christian Union (SDKÚ).
The SDKÚ, according to the party's statues, saw its role as "achieving the political cooperation of all people of good will, especially Christian Democrats and liberals" - a rather untraditional combination. But the SDKÚ was not the only quasi-liberal party that ran in the 2002 elections. Another was the New Citizen's Alliance (ANO), founded by power-hungry media mogul and current Economics Minister Pavol Rusko. Initial media reports indicated that Rusko would launch a socialist party. Only later did he change his mind and the end-result was a party working under the banner of liberalism.
Both parties made it into parliament and became part of the ruling coalition after the 2002 elections.
However, both have had their share of problems ever since. A group led by vice-chairman Ivan Šimko left the SDKÚ to start the Free Forum (SF). According to the SF statutes, the SF was a created as a movement of "Christian Democrats, conservatives, and liberals", and it can therefore be anticipated that it will fight for liberal votes in the upcoming elections.
ANO has lost several MPs and its popular support seems to be on the decline. In 2002 ANO gained 8 percent. In the elections for the European Parliament (EP), held in June of this year, ANO received 4.7 percent and will be the only ruling party not to have any representative in the EP. Some ANO insiders have long complained that with Rusko busy running the Economics Ministry, the party has lost clear leadership and steam.
If history is anything to go by, a new party will be fighting for liberal votes at the next elections in two years' time.

New communist party
Former member of the Slovak Communist Party (KSS) Ivan Hopta has announced plans to launch a new communist party in Slovakia. The preparatory committee will begin collecting signatures for a petition to institute the new communist party in September.
Hopta informed news agency SITA that the nine-member preparatory committee, consisting of former as well as current KSS members, will decide upon a name for the new party by the end of August." It will be a political party, whose aim will be to build socialism in Slovakia, via a constitutional democratic and parliamentary way, without the mistakes of the past," said Hopta.
The members of the preparatory committee disapprove of the policy of the current cabinet of Prime Minister Mikuláš Dzurinda, and criticise the performance of the KSS leadership and its deputies in the Slovak Parliament. Ivan Hopta left the KSS in mid July.

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AGRICULTURE

Green light for rural development plan of Slovakia

The European Union's Committee for Agriculture Structures (STAR) recently gave its favourable opinion to the Rural Development plan (RDP) of the Slovak Republic 2004-2006, the Commission said in a press release, New Europe reported.
Worth 561.8m Euro overall, the EU contribution will amount to 397.1m Euro during the three-year period 2004-2006, and the rest will be complemented with Slovak public and private financing.
Slovakia has a good tradition of farming and the country has huge forestry potential. With this rural development plan, the EU will support Slovakia to improve the profitability of farms, to maintain farming in less favourite areas, to set up specific agri-environment schemes, to set up afforestation activities and improve forest management, to help farmers meet environmental standards, the Commission said.
"This plan is based on the needs of the rural population of the Slovak countryside," Agriculture, Rural Development and Fisheries Commissioner, Franz Fischler said. "It provides them with a tool box to increase their economic viability and to step up the competitiveness of their farms," he added

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AVIATION

Slovenske airline ups passengers

Slovak airline Slovenske Aerolinie (SA) carried over 222,000 passengers last year, as opposed to 158,000 passengers in 2002, New Europe reported.
Flights amounted to 2,092 a moderate increase against the previous year. The airline carried about 209,000 passengers on charter flights, a solid growth of almost 48 percent as compared with the previous year. The number of charter flights rose by over two thirds.

SA shares up for grabs

The Slovak government has agreed to sell the state's 89.5% stake in national air carrier Slovenske aerolinie (SA), The Slovak Spectator reported recently. 
"Through the transport ministry, the state owns 89.5% of SA, accounting for €17.1m worth of share capital. The shares should be sold to a strategic partner," Transport Ministry spokesman Tomas Sarluska was quoted as saying. Transport Minister Pavol Prokopovic will submit a sales plan. A tender should be called in October or November 2004.

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BANKING

Istrobanka H1 profit up

Istrobanka, a medium-sized Slovak bank, reported 65.7m Slovak crowns in profit in the first half of this year, against 47.73m crowns in the same period of 2003, Sita reported recently. 
Its balance sheet stood on aggregate at 29.983bn crowns at end-June. Net interest earnings accounted for 462.2m crowns, while revenues derived from commissions and fees stood at 121m crowns. The bank's general operating costs reached 304.6m crowns, Sita reported, citing data published by the company. Istrobanka extended loans worth 13.25bn crowns, while client deposits accounted for 18.415bn crowns.

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ENERGY

Norsk Hydro to become InterRAO partner in SE sale

Norwegian energy company Norsk Hydro is likely to become a financial partner in an international consortium led by the Russian company InterRAO id it wins a tender for 66 per cent in Slovak power utility Slovenske Elektarne (SE), New Europe has reported.
According to InterRAO representatives in Slovakia recently, there are also other possible ways of cooperation with the Norwegian concern. One of them is that the Norsk Hydro will become a long-term consumer of electricity generated by the state-run SE. The state-controlled Russian investor, also known as RAO USE International, is one of four bidders for the 66% stake in SE. As is the case with the Czech energy company CEZ and Italian Enel, InterRAO confirmed its interest in SE in a binding offer to the Slovak cabinet. It specified that it was interested in acquiring all of SE, ie., including its nuclear division.
In addition to the three aforementioned companies, Verbund (Austria) also bid for the stake in SE. But its offer is not likely to be evaluated in the first round of the tender, as it has already said it has no intention to buy SE along with its nuclear sources. E.ON Energie (Germany) has also declared its interest in joining the InterRAO-led consortium, which features another German company - OstElektra. 
Another potential member of the consortium is said to be the French nuclear plant designer, Framatome. InterRAO is a joint venture of two Russian state-owned companies, RAO UES Russia and Rosenergoatom, which hold respective stakes of 60 and 40 per cent, according to reports.

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FINANCIAL NEWS

Bratislava to borrow 2.5bn crowns for infrastructure revamp

Slovakia's capital, the city of Bratislava, is looking to borrow 3.5bn Slovak crowns from commercial banks to finance municipality projects, primarily infrastructure development, CTK News Agency reported.
City reps have approached 40 banks, requesting that they submit offers by September 2nd. The amount of the loan was decided upon based on the acceptable level of the city's debt at 150 per cent of current revenues and the municipality's ability to pay interest on loans, Eva Chundinova, of city hall's press section said.
The city of Bratislava expects revenues to remain near the current level of 4.3bn crowns and annual interest payments to amount to 250m crowns. As of early August, Bratislava had outstanding debts worth 82.2m Euro or 3.3bn crowns. The city is expected to pay off a loan from Wiener Staedtische worth 10.6m Euro (425m crowns).

Budget deficit tops 18bn crowns in July

Slovakia's state budget showed a deficit of 18.55bn Slovak crowns at end-July 2004, up from 12.45bn crowns at end-June, but a decline of 12.64bn crowns from the same period a year earlier, according to figures released by the Slovak Finance Ministry recently, New Europe has reported.
Budget revenues for the first half of 2004 were up 9 per cent year-on-year to 139.13bn crowns. Tax revenues increased 8 per cent to 124.31bn crowns, while non-tax revenues added 17.7 per cent to 14.82bn crowns. Concerning tax revenues, value-added tax (VAT), excise duty and corporate income tax collection all improved in the monitored period.
Collection of capital gains and individual income taxes, as well as customs duties, slid. Expenditures were down by 0.7 per cent year-on-year in the first six months to 157.68bn crowns. Payments to the European Union totalled 4.45m crowns. Revenues for the first half amounted to 60 per cent of the projected full-year total of 231.96bn crowns. Spending reached 51 per cent of the 310.45bn crowns planned for full-year 2004. The state budget calls for a deficit of 78.5bn crowns this year.

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