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MONTH IN REVIEW

Business news roundup

July 3 - Crude oil refinery and petrochemical giant Slovnaft spins off its petrochemical activities into a 100-percent subsidiary called Slovnaft Petrochemicals. The new subsidiary will concentrate on the production and sale of olefin petrochemistry, mainly polyethylene and polypropylene.

July 3 - Slovakia's midyear budget deficit was Sk10.2 billion according to the Finance Ministry. Budget revenues reached Sk138 billion and were 50.6 percent of the annual plan. Expenditures stood at Sk148.3 billion (44.9 percent of the annual plan).

July 3 - Serial production has already been launched in the newly built car assembly plant of PSA Peugeot Citroen in Trnava, in western Slovakia. The plant manufactured 1,000 cars in June. When at full capacity in 2008 the plant is expected to put out 300,000 cars annually.

July 4 - The population of the Slovak Republic is growing older and the trend in 2005 was fewer marriages and more divorces, says the Slovak Statistics Office in its latest publication on the development of the Slovak population in 2005.

As of December 31 of last year, 5,389,180 people maintain permanent residence in Slovakia. The male population makes up 48.5 percent of the total. The population of Slovakia increased by 4,400 persons last year as a consequence of natural movements and immigration. Out of this number 3,400 people moved to Slovakia from abroad.

July 6 - New Health Minister Ivan Valentovič intends to change the legal status of the two largest state owned health insurers, Všeobecná zdravotná poisťovňa and Spoločná zdravotná poisťovňa, from joint stock companies back to public institutions. Valentovič is the former head of Spoločná. He refuses to talk about potential changes in the health insurance system, however.

July 7 - New Economy Minister Ľubomír Jahnátek says that he favours the alternative of buying back the 49 percent stake in the Slovak oil transportation company Transpetrol currently owned by the Russian firm Yukos.

July 10 - "I guarantee that there will be two VAT rates in Slovakia as of January 1, 2007," says Smer leader Robert Fico, adding that the new government will also increase income tax on banks and monopolies. In addition, Smer will insist on the progressive taxation of private individuals, the concrete form of which will depend on an agreement with coalition partners.

July 11 - Irish real estate company Parker Green International buys 13.4-hectares of land in Slovakia designated for multifunctional development. According to the company's plans, a 259-room hotel should be built on land located in the neighborhood of the PSA Peugeot Citroen car plant near Trnava. Furthermore, the firm also has 67,000 square meters of land for sale at its disposal. The plans also include construction of a cinema and a leisure centre.

July 12 - The National Bank of Slovakia (NBS) again directly intervenes to support the weakening Slovak currency. NBS enters the market when the crown's exchange rate falls to 38.720 SKK/EUR. After the interventions the rate remains below 38.600 SKK/EUR.

July 13 - Slovakia is among the countries with the lowest statutory minimum wage in the EU. However, it is also among those with the lowest proportion of employees working for minimum wage. Data released by Eurostat show that the statutory minimum monthly wage in Slovakia is €183, the third lowest within the EU. Only Latvia and Lithuania have a lower minimum wage, of €129 and €159 respectively.

July 14 - Slovak railway network operator ŽSR launches a project to interconnect the TEN-T network rail corridor with Bratislava airport and the railway network in Bratislava. ŽSR announces a tender to prepare project documentation and a construction supervisor. The project documentation will link three Bratislava train stations, directly connect Bratislava airport to the existing rail network and provide electrification of the rail route between Devínska Nová Ves and the Slovak-Austrian state border in Marchegg.

July 20 - The Slovak cabinet plans to modify priorities for drawing on the €11 billion Slovakia should receive from the EU in the next programming period between 2007 and 2013. After initial unofficial consultations, Brussels sends its remarks to the Slovak Ministry of Construction.

July 21 - Former Finance Minister Ivan Mikloš is recalled from his positions on the Board of Governors of the World Bank Group as well as on the European Bank for Reconstruction and Development and in the European Investment Bank. Current Finance Minister Ján Počiatek is replacing him in these positions.

July 24 - The National Bank of Slovakia used €1.7 billion ($2.2 billion) for direct interventions on the FOREX market last week. The figure is in line with economists' previous expectations. As of July 19, the central bank's FOREX reserves decreased by more than $2.4 billion in one week. Approximately 80 percent of the reserves are in euros and they are recalculated weekly according to the current exchange rate of the US dollar.

July 26 - The central bank NBS increases the two-week sterilization repo rate by 50 basis points and the one-day refinancing repo rate by 100 basis points. The key lending interest rate thus goes up to 4.5 percent in Slovakia.

The NBS later says that it will probably have to continue tightening its monetary policy in the upcoming months and that a further increase in key interest rates by the end of this year cannot be ruled out.

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