Archive of articles - October 1998, page 5

Letter to the Editor: Claudia helped in the end

Slovakia heading for massive fiscal deficit, provisional budget in 1999

The new Slovak government, likely to be formed by the parties of the former opposition in the next few weeks, will begin its term in office with more economic troubles that it may have anticipated.The 1998 state budget will probably show a fiscal deficit of up to 20 billion crowns ($540 million), more than twice as much as the orginally planned shortfall of 8.0 billion crowns ($216 million). Furthermore, as Brigita Schmögnerová of the Party of the Democratic Left (SDĽ) said on October 7, it is very likely that the new cabinet will only be able to start the next year with a provisional state budget.Schmögnerová led a team of economic experts of the four opposition parties in a meeting with top Finance Ministry officials, including minister Miroslav Maxon, on October 7. "The expected risks in this year's budget have fully materialised.

Slovak SAX continues falling

Slovakia's official SAX index eased 0.63 points to close at 97.42 in a quiet session on the Bratislava Stock Exchange (BSE) on October 7. The index was pulled down by losses to the issue of drug maker Slovakofarma, which has been in constant decline for several months. The issue closed down 173 crowns at 1,800 and its average price eased by 8.7%."There is not much to say about Slovakofarma now," a trader said. "Slovakofarma's GDR's abroad are still traded at a lower price than its domestic issue and that is probably the reason for the share's fall."Brokers said foreign investors were currently uninterested in trading on the Slovak market and were waiting for the formation of a new government after September 25-26 national elections, which could bring more political stability to the country.

Male Pattern Politics

Strike alert called in Krupina and Brezno

The catastrophic situation in the Slovak machinery industry has been reflected in strike alerts called by workers at two factories - Hontianske strojárne in Krupina and Mostáreň Brezno. Both protests concern salaries that have not been paid for several months."The situation has slipped out of the control of the factories, which means that from now on the government should solve it," said Peter Janíček, vice chairman of the KOVO metalworkers' federation.More than 400 workers from Hontianske strojárne (machinery works) in Krupina (south Slovakia) announced a strike alert on September 29 after not receiving their full June salaries. "They [management] promised to pay the rest of the June and August salaries by September 25 and they didn't," explained Jozef Labuda, a union leader at the company.

Letter to the Editor: French get Slovak history wrong

Fitch IBCA downgrades forex rating

State electricity producer demands increase

"I'm afraid the situation won't change if these decisions remain in political rather than professional hands,"Ondrej Studenec, an official from the Ministry of Economy's Energy Policy DepartmentOver the last four years, Slovenské Elektrárne (SE), the country's monopoly electricity provider, has suffered a serious decline in profits due to the energy price policy of the outgoing government of Premier Vladimír Mečiar. Both the company and market analysts now say that SE may collapse unless Slovakia's next government either increases electricity prices or deregulates them entirely.Since 1994, SE has repeatedly failed to push through significant increases in tariffs for electric energy, and has been faced down by a government determined to keep energy prices at a politically acceptable low level.

Slovak trade mission to Kazakhstan

Volkswagen takes new legal status

Unity of opposition parties shaken SDĽ party favours government without Hungarians

Signs of division and disagreement are already beginning to show among the four former opposition parties which took almost 60% of the vote in September's elections. The most serious tensions have been created by the reformed communist Party of the Democratic Left, which has said it does not want the Hungarian party to be a part of the new government.Robert Fico, a deputy with the Democratic Left (SDĽ) party, said on October 5 that "the SDĽ is interested in creating a strong government for four years, but the coalition of four parties including the Hungarian contains more problems than advantages." Fico's words echoed the statement of SDĽ leader Jozef Migaš on October 2, in which he said that "the optimal solution would be the creation of a government of three political parties."

What's Happening in Bratislava

Machinery industry hits wall

At the end of September, three important Slovak machinery companies called strike alerts. The reasons were the same - unpaid salaries and threats that hundreds of workers would be fired.Slovak industry indicators released for the first half of 1998 by Economy Minister Milan Cagala, show an overall uptrend. Industrial revenues climbed to 81 billion Sk ($2.3 billion), Cagala said, which is a 38% increase year on year. Meanwhile, losses decreased by 26% to 5.4 billion Sk ($150 million). Exports increased by 41% to 42 billion Sk($1.2 billion).But according to machinery labour unions, however, these indicators do not reflect the situation in the machinery sector, which accounts for 22.7% of all industrial production. "The insolvency of the Slovak machinery industry has reached 360 billion Sk ($10 billion) this year, which is a 570% increase on last year!" said Emil Machyna, President of the KOVO metalworkers' federation, adding that the sector's bank receivables sit at 175 billion Sk ($4.9 billion).

Crown fall seen positive for trade

A sharp depreciation of the Slovak crown, followed by an anticipated tightening of the monetary policy of the National Bank of Slovakia (NBS), can help the country to cut its ballooning foreign trade deficit, said macroeconomic analysts in the wake of the crown's October 1 flotation. On the other hand, they said, the weaker crown will also probably lead to higher consumer price inflation and may also halt Slovakia's impressive economic growth.Analysts said that the crown's decline against major currencies after it was floated freely at the beginning of October could help to curb growing imports, mainly on the consumption side. On the other hand, a significant improvement on the export side is not expected given the high import burden on Slovakia's exports.

Industrial wages rise

Bankruptcy law resuscitated

Since its introduction in 1991, the Slovak bankruptcy law has not been frequently enforced.The main obstacle in the past, besides the actions of the government to prevent its application, was the so-called "revitalization procedure". After filing for bankruptcy, this mandatory procedure must commence in each case. The aim is to enable bankrupts to run their businesses in cooperation with creditors to settle their claims. However, in most cases this leads to substantial delays for the whole bankruptcy procedure.At the beginning of the year the government proposed to abolish the revitalization procedure. Instead, the bankrupt may propose a settlement procedure which should become more attractive for creditors in the future.

NBS governor in US with special task

Schools in cash crisis

Slovak university rectors say their schools and student dormitories will be forced to close before Christmas while teachers will stop receiving salaries by the end of the year if the Finance Ministry doesn't release blocked funds for the university sector."I accuse the current government of committing a crime against the universities, and thus against the future of our nation," said Juraj Stern, rector of Bratislava's Economic University. "We will not be able to pay our invoices, scholarships to post-graduate students or even the full salaries of our teachers."

The best cafés in town

U Anjelov- Trendy café with intellectual clientele and great selection of wine. Great special mixed drinks. Laurinská 19, Tel.: 07-533-2724, open Mo-Sa 9:00-24:00, Su 17:00-24:00.Gremium Café- French style café located just off Opera House with live piano music and best "Vienna coffee" in town . Gorkého 12, Tel.: 07-536-1312, open Mo-Fr 10:00-22:00, Sa-Su 15:00-22:00.Atrium café- Modern décor with mostly business clientele during weekdays. Good selection of sweet desserts. Service is outstanding. Gorkého 3, Tel.: 07-434-3348, open Mo-Sa 9:00-22:00, Su 10:00-22:00.