Archive of articles - January 1997

VÚB nabs Merril Lynch bond issue

Three scenarios to elect a new president

If Slovakia wants to avoid a messy deadlock after President Michal Kováč's term ends in March 1998, a significant change is vital. The question is now which of three options that currently seem available will be chosen. Most politicians and political observers agree that the most disastrous scenario would be if there is no president after Kováč's term ends.If that happened, some of the presidential powers would be passed onto the government, which decides whether to pass them on to the prime minister. But there would be no one to sign into law bills passed by parliament, nor to swear in a new government that would come out of the fall, 1998 elections.

The Spotlight

Globtel first out of the starting blocks in GSM race

Globtel struck first in the battle to win an estimated 600,000 customers who will be using the long-anticipated mobile phone network GSM. Globtel, composed of France Telecom and six Slovak firms, opened its services for commercial use in Slovakia on January 15. The other company operating the GSM network, EuroTel, made up of the American consortium Atlantic West and Slovak Telecommunications, will offer its services for commercial use February 20."It was a riot scene at our store," said a giddy Bruno Duthoit, Globtel's general director. In the first week alone, mobs of people lined up in front of Globtel's newly-opened store located in the center of Bratislava. "We offered our services first to give us a jump on our competition," Duthoit said. "People are wrapped up in the marvel of new technology."

Find fine dining, expensive prices at Maria Terézia

How should Slovakia elect its president in 1998?

After the New Year festivities, Slovakia awoke to a new political atmosphere. The opposition (minus the Party of the Democratic Left - SDĽ) has moved from passive reaction to government policy towards counter-attack. The theme of the offensive is the direct election of the president. To make this change clearer to the foreign reader, I will pose some rhetorical questions. I think they will cover the questions someone who wants to understand this current political battle would ask. Why has the opposition chosen the direct election of the president as the thrust of its offensive?The Slovak Constitution has several flaws. One of them is that it does not adequately deal with the situation that would arise if the parliamentary parties failed to reach agreement about a successor when the term of office of the current president expires, leaving this constitutional office unoccupied.

Brezno: Rich folk tradition flows along the Hron

Icy breath fogged up faces as people stood all around with their hands jammed in coat pockets and with scarves wrapped tightly up to their ears. The soft crunch of snow under foot could be heard as people took that sort of half step to keep moving, to keep warm. Every day people gather at the Brezno bus stop located at the north end of a long rectangular medieval square. Buses come cruising through on the main road that cuts through the heart of this city located virtually at the epicenter of the country as they make their way to towns north, south, east, or west.Tucked between the heavily wooded mountains of the Low Tatras and the extensive mountainous ridges of the Slovak Rudohorie, Brezno nestles itself peacefully on the Hron River. From the first moment on the square, its size gives the false impression of a large town. The river can be heard as it rushes through these mountains.

New world-class hospital to treat number one killer

Slovakia's first world-class hospital has been established to treat heart disease, currently the cause of just over half of all deaths in the country. Last year an estimated 3,500 cardiac surgeries were needed in Slovakia, of which about 800 were performed.Starting in March, The Slovak Institute of Heart Disease (Slovenský ústav Srdcových Chorôb - SUSCH) will provide diagnostic care, treatment and surgery for up to 230 Slovaks with heart disease, while providing a center for cardiac research and medical training.The new hospital, located in Bratislava's Kramáre district, was designed by the Belgian architectural firm Tractabel, which negotiated a loan from the Belgian General Bank in Brussels for $67 million to finance the hospital's construction, built by the Slovak construction firm Hydrostav.

Slovnaft,VSŽ hot shares on relatively quiet market

The Bratislava Stock Exchange (BCPB) experienced a predominantly quiet two weeks, with VSŽ and Slovnaft seeing its shares traded the heaviest. VSŽ firmed moderately to 647 SK and Slovnaft jumped 19% to 832 Sk. Conversely, Považské Strojárne saw its price decline 16% to 266 Sk.This decline was caused mainly by negative publicity concerning personnel changes in the company and following the decision by ING Baring Securities in Slovakia not to proceed with a planned 600m Sk bond issue.Investors now prefer to deposit their money directly in Slovak banks, which currently pay short-term interest of up to 20%. The risk of the Slovak crown's devaluation is quite low because of a strong inflow of foreign currency which is pushing the crown into the upper part of the 7% fluctuation band and due to the NBS's policy of maintaining a stable exchange rate. We believe that this trend will be maintained during the next few weeks.

Tatra Banka gives loan to Slovak-Kazakh oil venture

Bratislava Bars & Clubs

Around Slovakia

143 refugees found in barn think they are in GermanyLost medieval castle is foundAccident claims two lives at VSŽ

Doctors union, Ministry of Health squabble

Doctors and officials at the Ministry of Health are at odds about a timetable for doctors' pay increases. During negotiations with the doctors trade union (LOZ) representatives, Ľubomír Javorský, the Minister of Health, said he never promised to increase doctors' wages in January, 1997. "This year's planned increase of 30-35% definitely will not take place in the first quarter of 1997," Javorský said. However for LOZ, even the proposed 35-percent increase is not sufficient enough, and any deadline other than January or February is unacceptable as well.In another area of contention, the Ministry of Health and LOZ don't see eye to eye on the state budget for health care or how many doctors there should be in the country.

Improve efficiency at home or submit to foreign capital

Slovakia's impressive macroeconomic performance in 1996 was maintained at the expense of the trade balance sinking into depths that appeared abysmal. Premier Vladimír Mečiar's most complicated economic puzzle for 1997 therefore will be to decide whether to adopt systematic measures to improve efficiency at home or leave the country at the mercy of foreign capital inflow."Despite GDP growth being the same as a year ago, its structure has changed," said Juraj Renčko from the Forecasting Department at the Slovak Academy of Sciences. "On the one hand, both production of gross fixed capital and public consumption have increased. On the other hand, our net exports have collapsed. The result was that GDP growth was carried by domestic demand instead of foreign one. Simply put, the liquidity exported abroad through imports had to be brought back via loans."

Community Grapevine

'97 to bring rebuilt offices, new residences

A private realtor and a city spokesman look at the year ahead. If Bratislava's supply of top-standard office space does not catch up to demand by 1998, it should by 1999, according to Marek Porubovič of the agency Reas. This, he predicted, will happen in the short-term through the reconstruction of existing buildings, rather than the construction of new ones. Investors looking to erect new office facilities are just beginning to enter Bratislava's market, and competition in this sphere is going to take a couple of years before it really takes off. Good office space is in pitifully short supply, but high standard housing remains even more scarce, and Porubovič believes development companies will soon start filling the residential market niche. With the market so starved that Petržalka flats are renting for 6,000 Sk a month, new five-room apartments are selling for 5 million Sk, and family houses are selling for 10 million Sk, investments can be earned back quickly.

EKG conference in jeopardy because of lack of money

Proud as she is to chair this year's International Congress on Electrocardiology (ICE) in Bratislava, Ljuba Bachárová doesn't know if she can raise enough money for the conference to meet in June.That's because Slovak state funding for EKG research has ebbed to a trickle compared to the support which EKG specialists received from Slovakia's former communist regime, when Czechoslovak EKG researchers gained a worldwide reputation for their contributions to the medical technology.Today the Slovak Academy of Sciences (SAV), where Bachárová works as a senior research specialist, receives too small a cut from the state budget for significant EKG research, while potential Western donors since the end of the Cold War have focused more on exploring the former East Bloc for commercial clients than to locate partners in clinical research.

Interbank rates on a rollercoaster

Dealers in Slovakia's commercial banking market are waiting to see at what level interbank interest rates will settle as they fluctuates wildly in the aftermath of the National Bank of Slovakia's (NBS) January 7 cancellation of the securities repurchase and reverse repurchase rates.The floating BRIBOR rates are like a pendulum that has yet to find its bearing , with market analysts only able to estimate how much and for how long the rates will swing before they find a groove."I see the interest rates moving up to the 20 percent level for the first 10 days of February and then dropping back down to around 14-16 percent after the first half of February as money flows out of the commercial banking sector to the NBS," said Daniel Bytčanek, the chief dealer at Poľnobanka, referring to NBS regulations that banks must meet 9 percent minimum reserve requirements at the middle and end of each month.

Tatra Air sets passenger record in '96