Archive of articles - May 1998, page 4

Presidential elections fail again

Slovakia's fractious parliament failed in its sixth attempt to elect a new president on April 30, ensuring that a two-month-old constitutional crisis would continue for at least another month. The widely predicted failure means that Prime Minister Vladimir Meciar continues to wield the many presidential powers he inherited from his bitter rival President Michal Kovac on March 2, when Kovac stepped down leaving no successor.Parliamentary speaker Ivan Gasparovic set the next round of voting for May 29. But earlier this week Meciar said he had no idea when Slovakia would eventually have a head of state. Slovakia's parliament, which is responsible for electing a president, is too bitterly divided to agree on a candidate and there is no limit to the possible number of rounds of voting.

Slovakofarma affected by forex fluctuations

Slovak insurance brokers suffer from legislation gap

"Quality is not as high as required. Slovak firms first of all look at the commission they can get, and only after that do they care about other services connected with their work."Vladimír Rančík, Secretary General of the Slovak Association of Insurance CompaniesBeing an insurance broker sounds easy, right? All you have to do is sell a 1 million Sk insurance package to an old friend in a top job, say for example at Slovnaft, and presto, 10% comes your way - 100,000 Sk without even breaking a sweat.In a country where who you know matters just as much as what you offer, the insurance brokerage industry has been especially susceptible to deals between 'old comrades', a trend which has undermined the ability of foreign brokerage firm to do business in Slovakia. The solution, according to brokerage experts, is to create a law that would regulate the insurance brokerage industry, thus weeding out illegitimate and unprofessional firms.

Finance Ministry accepts long money for 28.9% interest

Over the past two business weeks, deposits with short-term maturities on the interbank money market have held relatively stable, with one-day funds moving between 10 and 16%. Longer-term deposit have been even steadier, as one-month money traded mostly between 18 and 19%, three-month deposits between 21 and 22% and six-month funds between 22 and 23%.High accepted yields at auctions of state bonds are still the main driving force keeping longer-term deposit rates above 20%. The NBS said it considered the interest tide too high, but the Finance Ministry responded by accepting record high yields in the latest auctions of state bonds. The average yield at the April 21 auction of one-year state bonds hit 26.5%, while the maximum accepted yield was 27.95%. The ministry satisfied the entire volume of bids totalling 1.35 billion Sk.

NBS sees one-month money cheaper soon

The National Bank of Slovakia (NBS) said on April 23 that it envisaged one-month interest rates, the main rate it follows on the interbank money market, falling below 20 percent in the near future."The central bank is now mainly following one-month interbank interest rates, and we think keeping this rate under 20 percent is an achievable goal," said Peter Andresič, head of the central bank's open market operation department.On April 23, one-month money opened at 18/18.3 percent, bid/offer, but dropped further to 17.7/18.2 percent in early afternoon trading due to an inflow of funds to the interbank market.

SIT profits snuffed, cigarette smugglers on a roll

The government's New Year's resolution to hike the consumer tax on tobacco has cut a swathe through the profits of Slovak International Tabak (SIT), Slovakia's sole tobacco producer. Company officials say that the tax has simply led to widespread smuggling instead of filling state budget coffers, and argue that the measure should be rescinded.SIT announced in mid-April that its sales in the first quarter of 1998 fell to 1,456 million cigarettes, a 19% drop compared to the 1,795 million cigarettes sold in the first three months of 1997. "This is clearly a result of the tax increase, which made our products more expensive than those smuggled," said SIT's Public Relations Director, Jozef Banáš.

VW raises car production to 8,686 in March

State bonds to harvest a shady market yield

Premier Vladimír Mečiar's flair for the controversial was once again in evidence on April 17 in the town of Ovčiarsko near Žilina. Discussing the Finance Ministry's decision to allow private citizens to buy state bonds, Mečiar declared that "these state bonds could be bought by anyone, even people who have hidden 'black money' and do not pay taxes on it. This is our way of giving them a chance."Mečiar's statement was immediately attacked by opposition politicians as an open invitation to money laundering by organized crime. The accusations were repeatedly denied by government figures, who said the Prime Minister had only been appealing to citizens that were leery of banks to buy government bonds and thereby put their money to work for the state.

NBS says banking sector positive in 1997

Bishops' gospel branded as heresy by angry government

An April 23 open letter signed by nine out of 13 Slovak bishops addressed the moral climate in Slovakia and criticized the government's handling of public issues. The bishops claimed that they had only wanted to express the concerns of the communities they served, but Premier Vladimír Mečiar dismissed the appeal as one-sided interference in the state's affairs."We ask and expect [that the government] respect the Constitutional Court's decisions without reservations, that it hold democratic elections...[and] let people elect their president," the letter stated. The bishops blamed the government and parliament for Slovakia's corrupt privatization process, artificially nurtured ethnic hatreds, manipulative election law amendment, dubious amnesties, and held all sides responsible for not addressing Slovakia's general social decline.

TRENCÍN: Rich history explodes at vivid castle

Though the path is steep, anyone journeying up the Trenčín castle hill surely won't regret the effort. The bird's eye view from the top shows the old town surrounded by sturdy, ancient walls, old houses clinging to one another behind fancy modern buildings, and a stream of cars heading toward the center. The glistening blue of the Vah river separates the old town from its dreary industrial districts.It is not difficult to imagine ancient peoples like the Celts, Germans and Slavs surveying the landscape from the very same hill. The renowned Greek historian and astronomer Ptholemaios, in the 2nd century AD drew a map of the then-known world which depicted a settlement named Leukaristos (Greek for the Latin name Laugaritio) where Trenč'n lies today.

Legislative flaws

Auto insurance is the last insurance product remaining where the state-run insurance company, Slovenská Poisťovňa (SP), still holds a monopoly. Despite the fact that auto insurance is mandatory for all car owners, and that prices have increased 100% in 1998 compared to 1997, SP hasn't been able to fully compensate all its legitimate claims. Economic experts say that insufficient legislation to ensure that compensation is provided is behind the mess. The Economy and Finance Ministries, they say, have no legal authority to monitor the activities of any insurance company."Any chance to change the situation depends on a new government after September's parliamentary elections," said Rudolf Hečko, Insurance Supervision Department Head at the Slovak Finance Ministry.

Mochovce plant preparation ignites protests

As commemorations go, the twelfth anniversary of the world's biggest nuclear catastrophe in Chernobyl, Ukraine, was an awkward occasion in Slovakia. Slovenské elektrárne (SE), a state-run electricity producer, chose the now-infamous 27th of April to begin loading the first two reactors of its controversial Mochovce nuclear power plant, located 100 kilometers east of the Austrian border, with Russian-made nuclear fuel rods. Environmentalists and the international community launched a fierce protest, citing safety concerns.On the first day of loading, fifteen protesting Greenpeace activists chained themselves to the plant's entrance gate, delaying SE's plans for about an hour, but were swiftly cut free and detained by the police. 11 of the protesters, who hailed from Austria and Germany, were later banned from entering Slovakia for a year.

Slovak Eurobond ready for launch

Slovakia's long-awaited $1 billion multi-tranche Eurobond issue in dollars, marks and yen will finally be launched during the week ending May 8. The news was announced by Nomura International, the lead manager of the transaction, in an April 27 statement.Slovakia will hold a series of investor presentations before the launch, Nomura International said. They will take place in Boston and Hartford on May 4, New York on May 5, Zürich on May 6, Frankfurt on May 7 and London on May 8.Nomura International will act as global co-ordinator and lead manager, but Chase Manhattan will act as joint lead manager for the dollar tranche and Commerzbank AG will step up as joint lead manager for the mark tranche.

Rehearsing for elections, SDĽ sounds first true note

The Party of the Democratic Left (SDĽ) is an alliance of reformed communists which has often been accused of flirting with Vladimír Mečiar's ruling HZDS party, but which in fact remains the only Slovak party in the current Parliament that has never formed a government with Mečiar. At their April 25-26 congress, SDĽ deputies decided they wanted to keep it that way.In a resolution adopted at the end of the congress, held in the central Slovak town of Zvolen, the party stated it would not become the "savior" of the current governing coalition."The SDĽ has made it very clear that when election results are announced, it will not forget the wrongdoings of the current government," commented MP Peter Weiss, SDĽ Vice Chairman.

Slovak forex market turnover doubles in 1997

Cries of a constitutional crisis unfounded

The Government of the Slovak Republic, according to Article 105, Section 1 of the Constitution of the Slovak Republic, is performing the function of the President of the Slovak Republic, and claims that the decision of the President of the Slovak Republic on Feb. 20, 1998 on the announcement of the time for the referendum to be carried out [April 21, 1998] cannot be published in the Law Digest of the Slovak Republic because of the following reasons:The decision of the President as of Feb. 20, 1998 is not a decision on the referendum declaration but is decision on the announcement of the time when it should be carried out.

Small multi-purpose complex mired in financial bog

Ružinov is one of Bratislava's most lively suburbs when it comes to construction of new apartments and small multi-purpose complexes. One such project, that has been in the works since 1991, will finally be finished by Bratislava-based Renos construction company this year. But the seven year story of this promising construction has so far been a story of failure.The complex is located on the corner of Kaštieľska and Mierová, about 200 meters from the Economy Ministry and within Mierová street's public housing project, a site which boosts the complex's attractions to both business and private users.

Brezová pod Bradlom: Experience eternity in seconds with one of Slovakia's finest

The Small Carpathian mountains extend north of Bratislava, ending just within sight of the Czech border near the textile town Myjava. Tiny timeless villages are nestled in these densly forested mountains, connected by hilly, curvy roads. Brezova pod Bradlom is one such town, nondescript for the most part except for a daunting stone memorial that sits perched on a high hill way above the town.A drive or hike up to the white stone monument is a breathless experience. Only one car can fit on the loose gravel road which cuts back and forth in order to scale the steep face of the hill. Once you get to the top, a short walk takes you to a wide staircase up a structure with four pillars at the corners and a large sarcophagus that forms a peak in the direct center.