Books on Slovakia
% of GDP
Update No: 095 - (31/03/05)
Bratislava hosts the summit
It is significant that when the two most powerful men in the world decided to
meet earlier this year they did so in Slovakia, now in the good books of both.
Presidents Bush and Putin met in Bratislava on February 23rd-24th.
The summit meeting of the US and Russian presidents, George Bush and Vladimir
Putin, took place at Bratislava Castle. Slovak President Gasparovic invited
Putin to stay in Bratislava for one more day on a bilateral visit, which he duly
The bad old days of the thuggish Vladimir Meciar, premier from independence in
1993 to 1998, are firmly behind Slovakia. It is now courted on all sides.
"The three of us have unanimously agreed that Bratislava Castle should be
the summit venue, also as a symbol," Gasparovic said on January 18th after
a meeting with Prime Minister Mikulas Dzurinda and parliament chairman Pavol
Hrusovsky. Situated on a rocky outcrop above the Danube River, Bratislava Castle
dates back to the early Middle Ages, but has been extended and reconstructed
many times since. At present it houses exhibitions from the Slovak National
Museum (Historical Museum and Music Museum), as well as the reception rooms of
the Slovak president and parliament. It is a national cultural monument.
Not much seemed to have come out of the summit meeting, unless in private. But
the fact that it took place on Slovakian soil speaks volumes for modern
The Slovak 'miracle'
Slovakia has come in from the cold. It is now widely recognised that Slovakia
has a right to exist, which many disputed beforehand. Under Premier Dzurinda, it
has done extremely well of late, notching up high growth rates and earning
itself a very high reputation for political sagacity in avoiding the temptation
to go nationalist. Twelve years ago in January 1993 when Slovakia broke away
from the Czechs few would have predicted that it would do so well out of
secession. Most viewed it as a retrograde affair, motivated by the sinister
ambitions of an unsavoury character, Meciar.
A turning point came with his ejection in parliamentary elections in 1998, whose
verdict he did at least have the grace to accept. He had run a corrupt and
racist regime, which discredited the country and debarred it from EU and NATO
Last year he made a surprisingly good showing in the first round of presidential
elections. But the present incumbent, Ivan Gasparovic, beat him in the second
round on April 19th, to the great relief of Brussels, for Slovakia was just
about to join the EU, which it duly did in May, 2004.
Slovak Premier Dzurinda is one of the most remarkable leaders thrown up by the
transition from communism. He has won two successive elections, the first time a
prime minister has done so in Central Europe. Judged against the continuing
corruption and economic stagnation of former communist bloc states in most of
the former Soviet bloc that have not fully democratised, Slovakia has witnessed
a decisive transition.
Almost ready for Euroland?
The economy is buoyant. Slovakia posted year-on-year GDP growth of 5.3 per cent
in the year to November, 2004 the latest figure available. The government
intends to implement its approved reforms this year, aiming at improving
citizens' standard of living, said Dzurinda, unveiling the government's
priorities for 2005 in early January. "We expect 2005 to be a year of
real-wage growth at more than 3 per cent," said Dzurinda. The number of new
jobs should also grow by 1 per cent, while consumer price inflation should slow
down. The cabinet also wants to address the issue of regional disparities.
This year, the Slovak government has yet to push through the reform on
university funding. Other priorities include attaining an active presence in the
Euro-Atlantic structures, the drawing of European funds, and Slovakia's
fulfilment of criteria to join the European Monetary Union (EMU) and the
Schengen Agreement on outer EU border safety.
There is no doubt that Slovakia is currently better equipped to enter Euroland
than any other Central or Eastern European candidate. "We are in better
shape than most of our neighbours in public finances," said Ivan Miklos,
Slovakia's finance minister. It is true, with a low inflation rate running near
3%, a much reduced budget deficit and a will of iron to be the good guys of
Central Europe financially.
The grave Roma problem
Nevertheless, not everything is so hunky-dory in Slovakia - nor is the
government above reproach in all its policies. The commemoration of the 60th
anniversary of the liberation of Auschwitz and the Nazi death camps by Soviet
soldiers on January 24th was a moving affair. Insufficiently stressed, however,
was that two million Roma lost their lives in the Holocaust as well as six
The Roma still live in a dismal plight, discriminated against in multiple
fashion, as happened before the war - and there is no Romany Israel for them to
The Ivan Krasko settlement - incongruously named after a famous poet - last
February was the scene of the worst riots in Slovakia since the restoration of
democracy in 1989. A force of 250 police with water cannon pushed a mob of 400
Roma back to the settlement and then made house-to-house searches, allegedly
beating many of the inhabitants.
The food riots highlighted the desperate living conditions of Slovakia's
320,000-strong Roma minority, the poorest and one of the largest gypsy
populations in the expanded European Union. For Western Europe, the target of
Roma migration in the past, Slovakia's EU accession last May now raised fears of
a new wave of migrants.
Half the Slovak Roma live in 150 settlements, where typically there are no
tarmac roads, no running water, and one third of the homes are shacks. In
Trebisov, where 4,000 of the town's 23,000 population are Roma, the settlement
consists of a few rotting blocks of council flats, some rows of squat bungalows
built by wealthier Roma during the Communist era, and a scattering of illegal
wooden shacks. Each dwelling has been sub-divided so that every son's or
daughter's family occupies a single room, with 15 people or more crowded into a
In the settlement, electricity is intermittent, water is drawn from street
pumps, and excrement is thrown out of the window on to frozen mounds of rubbish.
The February riots were provoked by the rightwing government's closely watched
experiment to encourage the long-term unemployed to search for work by slashing
their benefits in half. The reform refuses to treat the Roma, who make up 80 per
cent of the long-term unemployed, as a special case. Yet in the settlements
there is 100 per cent unemployment and the whole community is dependent on
The cuts took effect just at the end of winter, when seasonal odd jobs, such as
collecting scrap metal, had not yet begun. Moreover, public works schemes to
soften the impact of the cuts were not yet up and running.
Now 120,000 unemployed are working typically twice a week for five hours. The
payment of Sk1,500 (€39, $51, £27) per month can bring a typical large Roma
family's benefits back up to two-thirds of the previous level. In Trebisov 400
unemployed, mostly Roma, are picking up and sorting rubbish, for example, and
helping pensioners in their homes. In fact there is more demand than places
available, because the town does not have enough co-ordinators or equipment.
"We can't employ all those who want to work," said Jan Krivy, mayor of
the nearby village of Trhoviste, where Roma also rioted. "They've done a
lot of good work and the village is as clean as it has ever been."
The schemes have given the Roma - many of whom have not worked since the
compulsory employment of the Communist era - some of the basic disciplines
needed to hold down a job. "They're just starting to learn how to
work," said Mr Krivy. "At the beginning they had problems waking up
early and with work itself, as they are used to doing nothing and sleeping
through the whole day."
But the schemes have given Roma few worthwhile skills, nor have they opened up
any real employment possibilities in a region of high unemployment and endemic
racism. In Trebisov, where there is 18 per cent unemployment, just three Roma -
all work scheme co-ordinators - have gone on to secure manual jobs as rubbish
collectors and security guards.
"Even the whites don't have jobs, so how can we?" said Jozef Copak, a
disabled father of seven. "Anyway, when an employer sees it's a Roma he
Moreover the benefit cuts, together with rises in value-added tax and excise
taxes, have impoverished the Roma further and created more social problems.
Mayor Dusan Polacky says many Roma have stopped paying council rents and
community charges, while local residents are improving fences and buying dogs to
stop thefts from allotments and Roma searching through their bins. "We're
the ones who are left to deal with this bad situation," he said.
Yet despite initial fears in other countries, few Slovak Roma have responded to
the benefit cuts by migrating. Most are too poor to travel and those that have
sought work abroad often return disappointed because they lack relevant skills
Slovak attendance at the Sofia conference on the Roma problem
The Slovaks sent a delegation to the conference opening in Bulgaria in early
February concerning the European-wide problem of the Roma. Leaders from Central
and Eastern Europe launched in Sofia on February 2nd the Decade of Roma
Inclusion - an international initiative to improve the status of Roma, Europe's
most vulnerable minority.
While most of the countries involved were represented by their premiers,
Slovakia only was by its deputy premier, Pal Czaky. Dzurinda has something on
Carmaking industry puts a dent in foreign trade
Slovakia's foreign trade in December, which showed a deficit of 9.3bn Slovak
crowns (244.22m Euro), was worse than expected by analysts, TASR reported
"A higher deficit has been last seen in December 2002. This development is
a result of the plunge in exports after 2.5 years. This most likely reflects a
hiatus in the output of the carmaking industry because of the need to prepare
production lines for a new model," Maria Fegerova, an analyst with local
bank Slovenska Sporitelna (SLSP), said.
According to Silvia Cechovicova from the Czech bank CSOB, the decline in car
exports was also reflected in the lower imports of auto components. The
cumulative trade balance for the whole of 2004 showed a deficit at 45.523bn
crowns, nearly double that of 2003.
"This development was caused mainly by the fast-growing volume of imports
accelerating towards the end of last year and, not least, weak exports,"
said Miroslav Smal, an analyst at Postova banka. He sees the worse total exports
mainly as a result of lower car exports.
"This confirms a significant dependence of the economy on a single sector,
namely one car-maker (Volkswagen). Once other carmakers bring their production
on stream this shouldn't be as prevalent a factor," he said.
Analysts expects 2005 foreign trade gap to rise to 60bn crowns mainly due to
higher investment-related imports and growing household consumption
Slovnaft reports bigger profit
Slovakia's major oil refinery Slovnaft reported a net profit of almost 10.1bn
Slovak crowns (265.4m Euro) for 2004, Slovnaft Director General, Vratko Kassovic,
was quoted as saying by TASR recently.
Slovnaft's operating profit totalled 12.5bn crowns and consolidated profit
before interest, taxation, depreciation and amortisation (EBITDA) rose to 16.4bn
crowns in 2004. Export revenue made up about 78 per cent of the total profit.
Kassovic attributed 2004's excellent returns to previous and current
investments, which allowed Slovnaft to become one of Europe's most modern
refineries. Product sales revenue in 2004 rose by almost 29 per cent
year-on-year, thanks to increased exports of motor fuels and petrochemical
products, the company said. Revenues from these products in foreign markets rose
35 per cent year-on-year in financial terms and 10 per cent in volume terms.
Last year's sales within Slovakia fell 3.5 per cent year-on-year.
Bratislava and Riga mull stronger EU unity
During his official visit to the Slovak Republic recenlty Latvia's Minister of
Foreign Affairs Artis Pabriks met with the senior officials of the country,
At his meeting with the President of Slovakia, Ivan Gasaparovic, several issues
were discussed, including also the visit of the President of Slovakia to Latvia
on March 2nd to 4th.
Gasaparovic informed Pabriks on the expected ratification of the treaty
establishing a constitution for Europe by the parliament of Slovakia and pointed
towards the significance of the treaty in the strengthening of European Union
unity in future. Both officials also discussed the prospective relations between
the EU and Russia.
Pabriks familiarised the president of Slovakia on Latvia's position regarding
the decision of the President of Latvia, Vaira Vike Freiberga, to participate in
the festive events on May 9th in Moscow and other current issues of the
Latvian-Russian agenda. During the visit the minister met with the Minister of
Foreign Affairs of Slovakia, Eduard Kukan. Both officials agreed that there is
close cooperation between Latvia and Slovakia; however, it is possible to
strengthen it, especially in economy.
The ministers discussed the experience of both countries in the international
organisations paying special attention to EU enlargement and the new EU
neighbourhood policy. Relations between the EU and Russia were also discussed at
the meeting. Pabriks also met with the Deputy Prime Minister and Minister of
Finance, Ivan Mikloa, and exchanged opinions about the EU financial perspective
where both countries have common interests. Pabriks spoke with the Chairman of
the Foreign Affairs Committee of the Slovakian Parliament, Pavol Paska, and
discussed issues of cooperation between the countries, process of ratification
of the treaty establishing a constitution for Europe, and EU-Russia dialogue.
During the visit, an Agreement on mutual protection of classified information
Putin: Slovakia forging stronger contacts with Russia
Slovakia has chosen to become a member of the European Union and NATO but it is
eager for closer contacts with Russia, RIA Novosti reported recently.
President Vladimir Putin is commending the developments between the two
countries. According to news reports, the Russian president's comments came
after a meeting with his Slovak counterpart, Ivan Gasparovic.
"President Gasparovic and I had a detailed discussion of European and
global developments. He informed me about certain problems of the emergent new
Europe," the Kremlin leader said. "We value Slovakia's balanced
stances on key world and European issues," he added. "Russia and
Slovakia are both working to buttress the United Nations' central role in
maintaining global stability and security," the Russian leader explained.
When questioned as to whether Slovakia is paying less attention to Russia now
that it has joined the European Union and NATO and what Russia thinks of that
development and what can be done, Putin said: "Slovakia has one thing to
compensate for it - that is the Slovak people's attitude to Russia. The Slovak
nation is pragmatic in its stance on Russia. We are aware of it, and we hope
this pragmatism will survive."
For his part, Gasparovic said that Slovakia will seek for new legal ways of
partnership with Russia. The two state leaders also spoke about Russia-EU
relations. Exports to the European Union roughly account for a half of the
Russian trade turnover, the Slovak president was quoted as saying.
Orange Slovensko boosts EBITDA
Orange Slovensko, one of the two mobile operators in Slovakia, reported earnings
before interest, tax, depreciation and amortisation (EBITDA) worth 8.651bn
Slovak crowns (227.3m Euro) for 2004, up 25 per cent, TSAR reported recently.
Overall 2004 revenues from services of the company amounted to 38.9bn crowns.
Orange enjoys a 38.5 per cent share on the telecom market in Slovakia for 2004,
up 7 per cent year-on-year. The operator provides communication network
solutions through its voice and data services. Its signal covers 99 per cent of
Slovakia, and is used by 2,360,572 people, according to the 2004 report. The
company has been operating in Slovakia since 1997. It was originally called
Globtel but in 2002 changed its name to Orange. It is a member of the Orange
global telecom group, and operates as the largest GSM network in Slovakia.
Orange Slovensko is 64 per cent owned by Orange SSA, majority-controlled by
France Telecom, and the remaining stakes are held by private financial investors
and the European Bank for Reconstruction and Development.
SACR launches tourism campaign
The Slovak Agency for Tourism (SACR) promoted Slovakia as a great country for
tourists to visit at an exposition held to coincide with the Bush-Putin summit,
TSAR News Agency reported.
The exhibition was visited by journalists from the United States, Japan, Russia
and Ukraine and other countries arriving in Slovakia to cover the summit.
Reporters were issued with publicity material in English and Russian about the
Tatra mountains, spas and historical monuments in Slovakia. They were most
intersected in the national parks and tourist resorts with recreational
facilities especially skiing.