OVER THE PAST three years, Slovakia has made strong progress in improving business conditions, according to a report by the European Bank for Reconstruction and Development (EBRD).
The EBRD compared 26 states on their way to fully functional market economies, including eight new EU member states from Central Europe and the Baltics, seven Balkan countries, and 11 former members of the Soviet Union. The results were tabled in the EBRD's Transition Report 2005.
The report generally praised Slovakia, although it also warned of several risks to Slovakia's economy, such as the delayed liberalization of the telecom sector, where the state has tolerated the dominance of Slovak Telecom for many years.
The report warned that Slovakia should diversify its foreign investments to avoid becoming too dependent on the automotive industry. The newly adopted rules for investment incentives were a positive step in this regard, according to the EBRD.
The report also warned that the arrival of a new government following 2006 general elections could present a risk for public finances.