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Books on Slovakia
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Update No: 118 - (29/03/07)
Slovakia has had three major leaders since independence in
January 1993, Vladimir Meciar, a populist dreaded in the West, Mikulas Dzurinda,
an austere reformer, the darling of Brussels, and now another populist in Robert
Fico. But he is proving more flexible than Meciar and is not really reversing
Dzurida's reforms, which is making him acceptable to the West
Slovakia signals U-turn on tax
Slovakia, for example, has for the first time signalled it could be willing to
enter into discussion over Brussels' wish to move into the sensitive area of
tax, a move that has led to a political clash between the Slovak government and
its opposition.
"I understand the advantages of [our] national tax system, but on the other
hand I also understand that EU heavyweights will hardly respect tax allowances
started by new member states," Slovak prime minister Robert Fico said in an
interview with EUobserver.
According to Mr Fico, Slovakia "will not avoid a tax debate...and will not
be screaming no," when a common solution is being sought.
So far, Slovakia has been one of the strongest opponents of any EU move into the
tax area, including being against plans by the European Commission to harmonise
the taxable base on company profits across the EU.
The country runs a low-tax regime on the basis of a flat tax, which has helped
to secure record levels of foreign investment.
This policy has caused irritation in larger member states. Former German
chancellor Gerhard Schroeder and French presidential hopeful Nicolas Sarkozy
have both accused Bratislava of engaging in tax dumping and called for cuts in
its European funding.
Robert Fico, himself a social-democrat, came to power last June, ending an
eight-year-long era of the centre-right government of Mikulas Dzurinda which had
carried out sweeping free-market reforms and turned Slovakia into one of
Europe's fastest-growing economies.
Even though Mr Fico stressed that he did not see tax issues resolved within the
coming few years, his softened stance has been strongly criticized by the centre-right
opposition.
Later, all three opposition parties are set to press ahead with a parliamentary
declaration on tax sovereignty, a document aimed at binding the government to
opposing any tax changes at the European level.
More generally, the 43-year old Fico pledged to turn the wheel from right to
left, to increase social welfare spending, to improve the rights of employees
and union members, but also to keep Slovakia on track for adoption of euro in
2009.
Slovakia's biggest challenge remains to meet inflation goals as part of the
so-called Maastricht criteria for new entrants to the eurozone, with Mr Fico
saying these criteria are "unjust" to new EU states.
"They [Maastricht criteria] do not reflect different economic conditions in
new member states", he said, as central European states struggle to curb
inflation while their economies are booming.
"There are only fourteen months left until the decision on Slovakia's euro
entry is taken ... so we have to achieve the impossible - to combine high
economy growth and low inflation".
So far, the country's economy has been on a sound footing, with GDP growth
hitting a record of 8.3 percent last year and the inflation outlook also
improving. The central bank forecasts annual inflation at 1.5 percent, compared
with January's 2.2 percent.
Slovakia to meet Schengen criteria
Slovakia is showing flexibility in geopolitical ways too, agreeable to
Brussels.
Slovakia will meet the EU conditions concerning its border with Ukraine by June,
Slovak Minister of the Interior Robert Kalinák said at a March 14 press
conference. "We don't accept any variant other than that we will be
prepared," Kalinák said.
The Slovak-Ukrainian border is to become an external border of the broadened
Schengen area as of Dec. 31, 2007, when nine of the 10 countries that joined the
EU in 2004 will join the visa-free travel zone. Cyprus will still maintain its
border controls. An EU assessment commission will arrive in Slovakia in late
June to check the security of the border with Ukraine.
The government of Prime Minister Robert Fico agreed on an action plan according
to which Slovakia would join the Schengen area. Kalinák said the plan was a
reaction to last year's critical comments about Slovakia not being sufficiently
prepared. Austria was among existing Schengen area countries to express concern
that Slovakia couldn't properly maintain its border with Ukraine. The Czech
Republic, which is also joining the Schengen area at the end of 2007, then
offered to maintain border controls with Slovakia if it remained unprepared (see
"Controls for Slovakia?" CBW, Dec. 18, 2006).
Kalinák said that a new Slovak-Ukrainian border crossing in Vyšné Nemecké
would be opened by June. An EU commission will come to Slovakia in late March to
assess the country's preparedness in the area of personal data protection. In
September, the commission will check the protection of Slovak air borders.
Originally, the Schengen area was to be enlarged in October 2007, but due to
technical difficulties in launching a new police database supercomputer-the
Schengen Infor-mation System II (SIS II)-a delay of a year or more was
threatened. This was resolved in December 2005 when expanding the existing SIS I
system was approved.
Fico negotiates electricity imports from Ukraine
Secure borders are a plus for energy supply. Slovakia should begin importing
electric energy from Ukraine, according to an agreement reached between the
Slovak and Ukraine Prime Ministers, Fico and Viktor Yanukovich, at a meeting in
Kiev on February 26.
Fico's spokesperson, Silvia Glendová, said that the details of the agreement
would be worked out soon. "Thanks to the previous government's decisions,
Slovakia is becoming dependent on imports of electricity, and the agreement with
Ukraine is of strategic importance for Slovakia," Fico said.
During the meeting Fico also asked his Ukraine counterpart to resolve the
longstanding dispute over the KTUK iron ore mining and processing plant in
Krivoi Rog, Ukraine.
Construction of the complex began in 1986, and after the breakup of the Soviet
bloc, it remained in the hands of Ukraine, Slovakia and Romania.
Fico also expressed interest in the transit of light Caspian crude oil to
Slovakia, the Czech Republic and Germany.
In Ukraine, the Slovak delegation signed agreements on transport, support for
and mutual protection of investments, and Slovakia's role in the European
Union-Ukraine action plan for 2007.
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ENERGY
Fico negotiates electricity imports from Ukraine
Slovakia should begin importing electric energy from Ukraine, according to an
agreement reached between the Slovak and Ukraine Prime Ministers, Robert Fico
and Viktor Yanukovich, at a meeting in Kiev on February 26, Slovak Spectator
reported.
Fico's spokesperson, Silvia Glendova, said that the details of the agreement
would be worked out soon.
"Thanks to the previous government's decisions, Slovakia is becoming
dependent on imports of electricity, and the agreement with Ukraine is of
strategic importance for Slovakia," Fico said.
During the meeting, Fico also asked his Ukrainian counterpart to resolve the
longstanding dispute over the KTUK iron ore mining and processing plant in
Krivoi Rog, Ukraine. Construction of the complex began in 1986, and after the
break-up of the Soviet bloc, it remained in the hands of Ukraine, Slovakia and
Romania.
Fico also expressed interest in the transit of light Caspian crude oil to
Slovakia, the Czech Republic and Germany.
In Ukraine, the Slovak delegation signed agreements on transport, support for
and mutual protection of investments, and Slovakia's role in the European
Union-Ukraine action plan for 2007.
In related energy matters, Slovakia's dominant power producer, Slovenske
Elektrarne (SE), is to complete the third and fourth blocks of the Mochovce
nuclear power plant (EMO), Slovak Spectator reported.
The Italian firm Enel, which holds a 66 per cent stake in SE, made the decision
10 months after entering SE. "Construction at Mochovce should begin in the
second half of this year," Fico said following a meeting with the head of
Enel, Fulvio Conti.
EMO's third and fourth blocks could begin producing electricity in 2012. SE is
to invest 62-63 billion Slovak crowns in completing Mochovce, Conti said.
Fico said the government would not participate in the project financially.
Slovakia wants Russia to help build Mochovce NPP
Russian specialists may help complete the construction of the third and fourth
power generating units of the Mochovce nuclear power plant in Slovakia, Slovak
Economy Minister Lubomir Jahnatek said after a session of the two countries'
intergovernmental commission for economic, scientific and technological
cooperation, Interfax news Agency reported on February 20th.
"We spoke about establishing a consortium that would finish the
construction of the third and fourth units using Russian specialists and
technologies," he said.
"However, this nuclear power plant does not belong to Slovakia. An Italian
company has acquired 66 percent of shares. That is why a decision (on whether or
not to invite Russian specialists) will not depend on us," the minister
said.
Jahnatek called for setting up a consortium of Russian and European companies to
build two new units to replace the nuclear power plant in Jaslovske Bohunice
that will be taken out of operation soon. "For this reason, I want Russian
companies to have strong chances," he said. All new units must use the same
type of fuel that is supplied to the facility, he said.
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TECHNOLOGY
Samsung investment confirmed
South Korean firm Samsung will build its new plant for the production of LCD
flat screens in Slovakia, Slovak Spectator reported. Slovak Economy Minister
Lubomir Jahnatek and Samsung Electronics President Sang Wan Lee signed an
investment memorandum between on March 13, said the cabinet office's press
department, adding that Jahnatek also reported on the investment at a press
conference together with Slovak Prime Minister, Robert Fico, New Europe
reported.
Initially, the Slovak government did not officially confirm the information
presented in the media that the South Korean electronics producer Samsung has
decided to land its new investment in Slovakia.
Nevertheless, the cabinet approved a draft investment agreement on March 7
between Slovakia and the South Korean company. "The cabinet settled all the
necessary issues that the foreign investor required at today's session. It is
now up to the investor whether the agreement will be signed," Slovak
Economy Minister Lubomir Jahnatek announced after the cabinet's session. The
minister was optimistic about Slovakia's chances of going through with the
investment.
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