Books on Slovakia
% of GDP
Update No: 105 - (30/01/06)
D-Day in September
The next parliamentary election in the Slovak Republic is tentatively scheduled
for September 2006. It is one place where 'Third Way' politics still count;
another is the Czech Republic, from which Slovakia seceded in 1993.
The opposition Party, Direction - Third Way (Smer), remains the dominant
political organization, according to a poll by UVVM. 32.5 per cent of
respondents would vote for Smer in the next parliamentary election, which the
governing coalition must dread.
The Party of the Hungarian Coalition (SMK) is now second with 12.2 per cent,
followed by the Movement for a Democratic Slovakia (HZDS) with 11.8 per cent,
and the Christian Democratic Movement (KDH) with 10.8 per cent.
Support is lower for the dominant party in the governing coalition, the Slovak
Democratic and Christian Union (SKDU). Meanwhile the Slovak National Party (SNS),
the Slovak Communist Party (KSS), the Free Forum (SF), the Movement for
Democracy (HZD) and the New Civic Alliance (ANO) are also ailing in the wings.
Dzurinda outlasts his popular welcome?
Since October 1998, the SKDU's Mikulas Dzurinda has led a coalition government
that included the KDH, the SMK and ANO. Dzurinda won a second term as prime
minister in September 2002.
Last year, Dzurinda survived a no-confidence motion after only 60 members of the
National Council voted in favour of the SMER-sponsored proposal-short of the 76
required to actually topple the government.
Dzurinda is the darling of Brussels and other Western allies; but he is disliked
at home. He introduced the flat tax that is socially divisive, even if beloved
of economic liberals abroad.
In December, Smer signed an agreement with the Slovak Trade Unions Confederation
(KOZ). Fico declared, "We are looking for allies to beat the current ruling
politics. Everyone is welcome."
The end of another global cynosure
Dzurinda has become a major figure on the world stage. He is basking in the
glory of his reform programme, widely seen in the US and the EU as a model of
He started it immediately after assuming the premiership in 1998 and was
re-elected, admittedly as head of a coalition of parties, in 2003, a rare feat
in the post-communist world.
His achievements have helped to facilitate a dynamic economy, which is also
greatly assisted by Slovakia's central position in Central Europe, attractive to
foreign investors, such as French and German motor manufacturers, and low wage
and other costs.
The Slovak economy is experiencing its greatest rate of growth in the past
decade. The Slovak Statistics Bureau has confirmed its forecasts and announced
that in the third quarter of 2005 the gross domestic product (GDP) grew by 6.2
per cent year-on-year. Slovakia thus ranks as the fastest growing economy in the
region, the SME daily wrote.
Economic growth is being driven by exports and increased household consumption.
Economists have warned, however, that this GDP growth structure carries the risk
of economic overheating. In particular, rising domestic consumption could result
in growing prices. According to VÚB bank analyst Mária Valachyová, the Slovak
central bank could try to tame local consumption by increasing key interest
The growth of the economy has had a positive impact on the creation of new jobs.
In the third quarter of the year, 2.24 million people in Slovakia had jobs, a
rise of 36,000 year-on-year. The unemployment rate decreased 1.9 per cent
year-on-year to 15.6 per cent.
The average wage in the national economy increased by 7.6 per cent in real terms
to Sk16,816 (441.7 Euro) a month, still very low by Western European standards.
Kia motors face fresh impediment
Kia Motors' plan to construct a plant in Slovakia faces a fresh impediment after
the Slovakian government said it would not give additional aid to Kia's nine
auto parts suppliers, New Europe reported.
Former Economy Minister, Pavol Rusko, had promised to pay the suppliers 663
million Slovensk koruna (US$319 million) as an incentive. Incumbent Economy
Minister, Jirko Malcharek, said recently that it is impossible to provide state
aid under revised state rules, according to local media. Malcharek said that
former Economy Minister, Pavol Rusko, promised the money to these companies
without the Cabinet's prior approval. According to the Slovakian media,
Malcharek said the former minister overstepped his powers.
Vienna airport group wins control of Slovak airfields
The Slovak government recently picked an investment group led by Vienna's
airport operator to buy the fast-growing airports in Bratislava and Kosice, New
The winning bid of 21.2 billion Slovak crowns (US$687 million) in cash and
future investments from the TwoOne consortium beat a competing offer from a
group led by Spain's Albertis Infrastructures. TwoOne includes Flughafen Wien,
Slovak investors and Austria's Raiffeisen bank. Albertis' group included Slovak
investors and TBI, which operates the Belfast and London Luton airports. The
groups were finalists in a privatisation sweepstakes launched in September for
the government's 66 per cent stake in Slovakia's largest airports.
TwoOne won the initial round, beating three other bidders including Albertis.
But a second round was ordered in January by Prime Minister, Mikulas Dzurinda,
after government opposition leaders cried foul and threatened to block the deal.
Opponents said TwoOne would give preferential treatment to the Vienna airport at
the expense of Bratislava. The two airports, 50 kilometres apart, are currently
competitors. Irish budget carrier Ryanair, which serves Bratislava, also opposed
a TwoOne takeover.
Yet TwoOne promised to invest billions of crowns to upgrade the Slovak airports
and build a rail link between the Vienna and Bratislava facilities. "We are
prepared to take prompt measures ... as early as this year," said Flughafen
Wien, board spokesman, Herbert Kaufman. "Bratislava airport will be
enlarged, modernised and made more comfortable."
TwoOne's winning bid included 11.4 billion crowns in cash and 9.8 billion crowns
worth of investments for both airports by 2010.
Thanks mainly to budget airline expansions, Bratislava's MR Stefanik Airport
handled 13.2 million passengers last year, nearly twice as many as in 2004.
Kosice's airfield is also growing rapidly. TwoOne estimates Bratislava's annual
passenger load would rise to 30 million by 2015.
VIP terminal opens at Bratislava airport
A new separate terminal, available for VIP passengers, had been opened at
Bratislava's M.R. Stefanik Airport, with the airport's Executive Director, Milan
Kajan, presiding over the ribbon-cutting ceremony, New Europe reported.
This terminal, a standard service of international airports worldwide, was
planned to serve customers taking business and private flights. "The aim is
to cut the time that our VIP customers wait for their flights, and provide them
with exclusive services," operations manager of the airport, Juraj Vitka,
said at a news conference. Passengers going through the new terminal would have
a business lounge at their disposal with access to the internet, for example,
added Vitka. The airport invested 16 million Slovak crowns (427,000 Euro) in the
new facility. "Of course, the return on investment is slower than in the
case of a common terminal," Vitka said. "The terminal's capacity is 20
people for now, but it is very likely that it will later have to be
expanded," he added.
CME completes acquisition of TV Markiza
Central European Media Enterprises Ltd. (CME) on January 23rd completed its
acquisition of a controlling stake in Slovakia's most watched TV station, the
private channel Markiza, New Europe reported.
CME increased its stake in Markiza's broadcaster to 80 per cent in the
transaction. The company said the purchase price was US$24.4 million (20.6
million Euro). A deferred US$5.1 million (4.3 million Euro) instalment of the
purchase price was due for May 31st 2006.
CME embossed the acquisition as part of its long-term plan. "We expect
better results from the acquisition of control over the operation of Markiza,"
said CME President, Michael Garin, in a statement. The station was repeatedly
criticised for biased reporting under the influence of its founder, Pavol Rusko,
who used its news programmes to promote his ANO party and to attack political
CME's takeover, which followed a buy-out of Rusko's stake, was widely expected
to return balance to Markiza's programming, and aid problem-free approval of its
application for license renewal. Jan Kovacik and Milan Filo continue to hold
minority stakes in Markiza.
Large telecom operators fined
The three largest telecommunication firms in Slovakia - Slovak Telecom, Orange
Slovensko, and T-Mobile - were on the verge of facing fines for failing to
enable customers wanting to change operators to keep their telephone numbers,
the daily Pravda reported.
Telephone numbers can be transferred, according to the law. The operators should
have enabled the transferability of numbers by May 2004, when Slovakia joined
the EU. The operators argued, however, that they required more time to prepare
for the changes. According to Orange Slovensko and T-Mobile, until July of this
year, such updating would be impossible. On the other hand, Slovak Telecom said
it was ready for the change, but was waiting for the rest of the market. Apart
from the three biggest telecom players, six smaller telecom operators also were
facing the threat of the fine, which, according to observers, could reach up to
three million Slovak crowns (80,000 Euro).