Archive of articles - June 1998, page 2

Jobless rate remains stubbornly high

Vladimír Mečiar and his cabinet promised Slovak voters back in 1994 that they would wrestle the unemployment rate, then 13.7%, down below 10% during their four year reign. But with three months remaining in the current Mečiar administration's term in office, the jobless rate is still way over 13%. Moreover, analysts claim that if the government was not cooking its books, the actual figure would be higher than it was in 1994.In many ways, the high unemployment figures are an anomaly in a country with otherwise strong macroeceonomic results. But analysts say that corporate profits are not being ploughed back into the ailing labour market, while government policy remains focused more on soothing the effects of unemployment rather than on addressing the causes.

Education law bill attacks minorities

As September's national elections heave in sight on the Slovak political horizon, the far right Slovak National Party (SNS) has proposed an amendment to the education law that threatens to ignite nationalistic emotions. The SNS hopes to push the law through during the July Parliamentary session, but tepid support from its ruling coalition partners has put the future of the bill in doubt.The amendment proposes to reduce the use of Hungarian as a language of classroom instruction by requiring that some subjects currently taught in a minority language, like geography and history, be taught in Slovak.Ivan Šimko, a senior member of Slovakia's largest opposition bloc, the SDK, said that the law proposal was a pre-election ploy by the SNS rather than a serious attempt to introduce educatioonal reform.

Cumulative FDI up to 41.2bn Sk in '97

The SDK's clouded political vision; Bribery scandal hits opposition party where it hurts

Somewhere in the Bible there is a stern warning about the dangers of trying to remove a speck of dust in someone else's eye when you have a log obstructing your own vision. As an admonition against hypocrisy, this old chestnut has much to offer Slovakia's opposition politicians today, politics being, as they say, mostly a Vision Thing.The SDK, the country's biggest opposition party, stands accused of trying to bribe journalists to write nice things about its leaders and policies. When the scandal first broke in late May, the party did its best to deny, defuse and dismiss the issue for several weeks, until leader Mikulaš Dzurinda finally dismissed his campaign director, Jozef Paczelt. Dzurinda also belatedly took responsibility for the scandal, but would not say what consequences, if any, would follow.

Government squeezes domestic bond yields

For nearly a year, the cash-hungry Slovak government has been forced to pay exorbitant interest rates on the domestic market to feed the ever-increasing state debt. But with a $750 million windfall from a recent Eurobond issue safely under its belt, the government has turned the tables: the Finance Ministry can now afford to ignore Slovak banks that are not willing to purchase government securities at yields of less than 20% interest.However, bank dealers and analysts say that the cash surplus produced by the foreign funds will not last long, and argue that once the money runs out, the government will have to return, hat in hand, either to foreign creditors or to domestic markets and their high rates.

What's Happening in Bratislava

Hefty fines proposed for mutinous town councils

Premier Vladimír Mečiar's administration has taken less than two months to retaliate against a referendum staged by the rebellious town councils of Štúrovo and Svätý Jur. A proposed new law forbids municipal governments to call referenda on matters beyond their competence, and imposes a 3 million Sk fine for infractions of this rule.On April 19, Štúrovo and Svätý Jur staged a referendum on NATO accession and direct Presidential election. The plebiscite had originally been called for that day by former President Michal Kováč, but had been cancelled by the Mečiar government on March 3.The previous Law on Municipal Administration, drafted in 1990, had allowed municipal councils to call a referendum on certain specific issues relating exclusively to the town or village itself, or on unspecified "other important matters" (Chapter 2, Article 11a, Paragraph 6). Under the new proposal, "municipal residents are not permitted to vote on other matters," and if municipal councils break this rule, "the court can assess a fine of up to 3 million Sk."

Trade deficit grew 8.8bn Sk in April

Around Slovakia

Blackout at Roosevelt HospitalCzech soccer champs forced to play in HZDS jerseysFastest halušky makers and eaters awarded

VSŽ posts better 1998 profits, raises dividends

Slovakia's largest steel mill, VSŽ Holding, said on May 28 it expected a significant profit increase in 1998, adding that it had posted a net profit of 262.7 million Sk ($7.63 million) for the first four months of the year.

SDK accused of bribing independent journalists

Four months before national elections, the strongest opposition party, the Slovak Democratic Coalition (SDK), has been accused of trying to bribe nineteen independent journalists to provide positive coverage of SDK activities.Jozef Paczelt, head of the SDK's campaign staff, resigned on June 5, more than a week after the scandal became public. "Under normal circumstances I would have quit the day after this scandal broke," said Paczelt in an interview for the Slovak daily SME. When asked why he hadn't quit, Paczelt replied "because the SDK [leadership] confirmed me in the position," but added that he felt responsible for the crisis. "The connection between what happened and political responsibility for it is clear," he said.

Crown holds firm despite international market turmoil

The Slovak crown market remained relatively unaffected by international turmoil during the first days of June. The crown traded mostly within the narrow range of 1.4 - 1.8% on the weak side of its plus/minus 7% exchange rate band, fuelled mainly by local corporate demand for hard currency.However, from June 9th the Slovak Crown gradually weakened from levels around 1.25-1.4 to 2.5% on the weak side of the band. The weakening came on the heels of a fall in the Czech crown against the mark. The move was also fuelled by higher local corporate demand for hard currencies.Further declines in longer-term deposit rates and weak demand, except in auctions of state securities, gave no support to the crown. The National Bank (NBS) continued to follow market trends in its fixing policy.

SCP paper mill posts higher profits due to exports

Slovakia's largest pulp and paper producer, SCP Ružomberok a.s., said on May 22 that its 1997 pre-tax profit had increased to 322.8 million Sk ($9.49 million) from 309.5 million in the previous year.SCP's overall revenues rose to 6.66 billion Sk in 1997 from 6.09 billion a year before, the company said in a statement, adding it plans to increase its revenues to 7.2 billion Sk in 1998. That would put estimated net profit at 500 million Sk."The company posted these favorable results despite a decrease in the price of pulp and graphic paper on the European market in the first half of 1997," the statement said.

The Spotlight

Blues brothers 2000The Wedding SingerU.S. MarshalsWild thingsThe Replacement KillersFallen

Around Slovakia

Pavarotti brings heavenly singingEntrepreneur shot and burned

Government withdraws NBS law draft until after elections

Parliament withdrew from its agenda a highly controversial draft amendment which would have strengthened the government's power over the central bank, Slovak Finance Minister Miroslav Maxon announced on May 18."I informed [OECD Secretary General] Donald Johnston last week that the central bank amendment had been withdrawn from the parliament," Maxon told a news conference. The Organisation for Economic Cooperation and Development (OECD) has been monitoring the progress of the amendmentMaxon added that his ministry and the National Bank of Slovakia (NBS) had been working on a new proposal to amend the law, but explained that the new legislation will be discussed by a new parliament formed after September's general elections.

European retail investors shore up Slovak Eurobond

LONDON - European retail investors once again proved to be the mainstay of emerging bond markets on May 14, as Slovakia braved poor sentiment to issue a three-tranche multi-currency Eurobond, the first such issue by an emerging market since renewed tensions in Asia.Split into dollar, yen and mark tranches, the $750 million deal witnessed mixed sales sentiments, according to bond underwriters who reported good demand for the mark denominated bonds, but poor interest in the dollar issue.

Company Profile: Chemosvit heads East

Two years ago, eastern Slovakia chemical maker Chemosvit established a branch operation with the Ukrainian company Luckplastmas to obviate difficulties with imports to the former Soviet region. Although doing business in Ukraine has proven a struggle at times, Chemosvit still claims it was worth taking the risk.In the last several years, the number of Slovak companies interested in the Ukrainian market has been constantly growing. In 1994, the trade turnover between Slovakia and Ukraine reached 7.5 billion Sk ($220 million), while in 1997 it amounted to 17.3 billion Sk ($509 million).According to Ukraine's Ambassador to Slovakia, Vasil Fiťkal, Slovakia is one of Ukraine's most important European economic partners. "Slovakia is the only country with which we have annual government talks on business," said Fiťkal. "Thanks to these meetings many mutual problems have already been resolved."

Marketing courses match EU standards

For the first time in Slovakia, a series of internationally-based courses in marketing are being held in Bratislava. The accredited courses are fully compatible with European Union (EU) criteria on economic education.The courses are organized by Dom Techniky (Technology House) in Bratislava in cooperation with the Netherlands Institute of Marketing (NIMA) and the Czech Institute of Marketing (CIMA) under a common name - the NIMA-CIMA Project. Well-known in western Europe, the courses are divided into three levels. Successful alumni become members of the European Marketing Confederation, which has its headquarters in Brussels.