In-depth Business Intelligence

Key Economic Data 
  2002 2001 2000 Ranking(2002)
Millions of US $ 23,700 20,500 19,700 61
GNI per capita
 US $ 3,950 3,760 3,800 80
Ranking is given out of 208 nations - (data from the World Bank)

Books on Slovakia


Area ( 




Ivan Gasparovic

Private sector 
% of GDP


Update No: 091 - (26/11/04)

No comment on alleged union of SDKÚ and HZDS
An extraordinary story is abroad in Slovak politics that the two leading parties in the country are considering an electoral pact at the next elections. Their party leaders refused to comment on speculations that they were contemplating cooperating after the 2006 national elections.
The ruling Slovak Democratic and Christian Union (SDKU) party is led by Premier Mikulas Dzurinda. Former PM Vladimir Meciar leads the opposition party, Movement for a Democratic Slovakia (HZDS).
Jozef Grapa from the Movement for Democracy, a party founded by President Ivan Gasparovic, said the SDKU and the HZDS were planning to create a ruling coalition for the next election term, according to the daily SME. 
Grapa said that under the alleged agreement, Dzurinda would remain the Slovak prime minister and Meciar would be the new parliamentary speaker.
This seems to be a bizarre idea, given the strongly pro-Western policies of the SDKU and the primitive populism and nationalism of the HDZS. Meciar is a notorious political thug, although he did belie the charge of being a dictator by submitting himself to a popular vote in 1998, which he lost. 
But his party still got 19% of the votes in the last elections, leaving it the largest party, so that an alliance can be seen as making tactical, if not higher political, sense.

Pact among the coalition
What does make more sense is that three of the four ruling coalition parties in Slovakia have made a pact that none of them would team up with the opposition during parliamentary voting. Similar promises have been made in the past, but occasionally the temptation to push through special interest legislation has been stronger than loyalty to coalition partnership.
According to Béla Bugár, the leader of the SMK, a coalition partner, the outcome of the meeting was that everyone agreed to join forces to erase problematic relationships in parliament. "At least we will try," Bugár said.
The meeting to renew unification vows among the ruling coalition was held at the request of the SMK in reaction to a recent incident in which the SDKÚ voted in line with the opposition HZDS against a bill making changes to a national forest management company, Štátne lesy. An SMK minister had prepared the legislation. This unusual voting pattern of course has lent some credence to the idea of a re-alignment along the bizarre idea mentioned above.
The SMK has also on occasion aligned itself with the opposition, however. The party supported the opposition's call to investigate links between political parties and unlicensed deposit companies that collapsed, bilking citizens out of billions of crowns.
Another ruling coalition party, New Citizens Alliance (ANO), helped opposition parties push through several changes to parliamentary procedure. With ANO's help, the Slovak parliament is now empowered to create special committees to investigate public interest issues.
Analysts say that the pact between the ruling coalitions is fragile. Nevertheless, the parties are optimistic about the prospects of keeping the agreements. Pavol Minárik of the KDH told The Slovak Spectator, "In fact, we have not manufactured any concrete agreement but we have agreed to act in a way befitting coalition parties."
Minárik does not think that the agreement is different from the previous ones, but said the parties acknowledged the need to discuss rules violations. "In the event of a violation of the ruling coalition agreement, we will have to repeat this [reunification] process again," said Minárik.
The SMK shares the KDH's view. By requiring the ruling coalition to meet after perceived rules violations, the ruling coalition hopes to transmit the message that relations within the parties are normalised.
"The agreement does not mean anything else, only that the partners will create some agreements that will be binding for all. The coalition does not have any other option so we think that everyone will work on fulfilling this agreement," Lívia Pokstaler of the SMK press department told The Slovak Spectator.
The SDKÚ used the meeting to persuade its partners that it has not manufactured any agreements with Meciar's party, the HZDS. Dzurinda once again declared that a concord between the SDKÚ and Meciar's party is a "completely made up construction."
Liberal ANO party Deputy Chairman Lubomír Lintner told the news wire TASR that there was no reason to fear that the government would not survive its current term.
According to Lintner, it is necessary to create time to seek consensus in those cases where the opinions of the coalition partners differ. "Politics also results in voting together with the opposition. Everything should be done to avoid the reoccurrence of such situations," Lintner said.
The ruling coalition agreement stipulates that all actions should be the result of consensual agreement. If no agreement is reached, none of the coalition partners ought to submit the controversial issue to parliament until the ruling coalition council takes a stand on the issue.
Under the pact, if any of the ruling coalition parties breaks away to unite with the opposition during a parliamentary vote in order to push through certain legislation, it would be considered a violation of the ruling coalition agreement. 

Economy doing well
The electoral prospects of the government will depend on its economic performance. Here there has been some good news for some time.
Slovakia's economic and labour productivity has grown more quickly than that of the US over the past five years and is gradually approaching the European Union average, a report released in Brussels indicates. On the other hand, Slovakia significantly lags behind in its employment rate and financial commitment to research and development, according to the expert report on the Lisbon Strategy of the EU. The Strategy was adopted in 2000 and set out the goal of making Europe the world's most competitive economy by 2010.

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Hyundai plant construction begins

The Zilina-based Construction Authority issued a building permit on October 14th, enabling the launching of construction works on the Hyundai/Kia site, reported.
The permits were issued for a press shop and for utility connections. According to the Mayor of Zilina, Jan Slota, the issue of a construction permit means the end of the threat that the Korean carmaker would leave Slovakia, as the deadline was set for October 15th.

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Austrian Airlines covets Slovenske Aerolinie

Austrian Airlines Group confirmed its interest in the privatisation of Slovak airline company Slovenske Aerolinie, reported recently. The Austrian airline said it wants to gain a majority in Slovenske Aerolinie, however, preserving the company's Slovak identity. It claims it currently holds a 30% share in the Slovak civil aviation market.
"The development of Slovak civil aviation is of significant importance to us, considering the company's market position," read a company statement. In the next months Slovenske Aerolinie should receive financial assistance amounting to €5m with the support of Austrian airline. These resources would be used for Slovenske Aerolinie's restructuring. The Slovak carrier said Austrian airline's intent is to contribute to the implementation of Slovenske Aerolinie's business plan by securing financial assistance and know-how.
Slovenske Aerolinie provides scheduled and chartered air transport for passengers, cargo and mail, plane maintenance and it runs a travel agency as well.

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World Bank leader hails Slovakia's banking sector reform

The World Bank's regional leader for Central Europe and the Baltics, Roger Grawe, has said that the restructuring of the banking and business sectors in Slovakia can be described as the most powerful reorganization compared with all the neighbouring countries, Radio Slovakia reported.
He said that the country's good economic results, confirming that Slovakia's economic reform was one of the most successful in the world, and also the amount of investment channelled into Slovakia in the past few years were visible signs of this programme.

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S&P rating actions on three Slovak banks

Standard & Poor's Ratings Services said recently it had revised its outlook on Slovak Tatra Banka and Vseobecna Uverova Banka (VUB) to positive from stable. At the same time, Standard & Poor's affirmed its BBB-/A-3 counter-party credit ratings on Tatra and its BB+/B counter-party credit ratings on VUB. In addition, the public information (pi) rating on Slovenska Sporitelna (SLSP) was affirmed at BBpi, New Europe reported.
Standard & Poor's does not publish outlook statements on pirated entities. The various rating actions reflect the improving economic environment in the Slovak Republic associated with its accession into the European Union, as well as the positive trends in the banks' financial profiles and performance. In addition, Slovakia's economic structure is strengthening.
"Further international political and economic integration - in particular, through EU membership - is helping Slovakia to attract non-privatisation-driven foreign direct investment," said Standard & Poor's credit analyst, Magar Kouyoumdjian. "As a result, the country is expected to post of the strongest economic growth performances among Central and East European countries, despite tepid international economic conditions," he added.
Furthermore, there is strong political willingness to continue to reform the public sector. Improvements in The banks' asset quality, profitability, and capitalisation have been strong over the past few years, particularly for the privatised banks. "Increasing opportunities for growth will be created for leading Slovak financial institutions if positive and sustainable economic developments continue," Kouyoumdjian said. "The competitive environment has intensified, however, and the banks need to demonstrate sustained growth in core revenues," he added.
Given the relatively late restructuring and privatisation of VUB and SLSP, the banks still need to demonstrate consistent improvements, particularly in the face of increasing competition and in relation to Tatra's stronger financial and market position. The ratings on Tatra reflect the bank's strategically important status within the Austria-based Raiffeisen Zentral bank, Oesterreich, which indirectly holds 86 per cent of Tatra's shares. The bank's own strong market position, good capitalisation and liquidity, and low levels of problem assets, also support the ratings. Constraining rating factors include the still-higher-than-average economic and industry risks to which banks are exposed in Slovakia and the challenge of an increasingly competitive environment, where Tatra's main competitors were privatised and restructured.
The ratings on VUB reflect the ongoing support and commitment from the bank's strategic owner, Banca Intesa SpA, its strong franchise and market position, an improving operating environment and a healthy financial profile. The ratings are constrained, however, by higher-than-average industry and economic risks, significant competitive challenges and a need to grow core revenues.
The "pi" rating on SLSP reflects support from and the commitment of its majority shareholder, Austria-based Erste Bank der oesterreichischen Sparkassen AG, as well as SLSP's strong position in the Slovak banking sector and improving financial profile due to the fairly completed restructuring. The ratings are constrained by increasing competition, residue credit risks, and the still high - albeit improving - economic and industry risks of the operating environment.
"The outlook on Tatra and VUB reflects improvements in the Slovak economy, coupled with a more vibrant business culture. The maintenance of good financial results and continued ownership support could result in improved creditworthiness for major Slovak banks," Kouyoumdjian said.

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Telecom posts 2bn crowns net

Dominant fixed-line telecommunications provider Slovak Telecom ended the first 9 months of 2004 with a net profit of 2.069bn Slovak crowns calculated according to international financial reporting standards (IFRS), down 11.2%, New Europe reported recently. 
Earnings before interest, tax, depreciation and amortisation (EBITDA) amounted to 6.138bn crowns during the reported period. Total revenues of the company amounted to 12.655bn crowns, a drop of 5.4% year-on-year, the company said. Deutsche Telekom holds 51% in Slovak Telecom.

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