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OECD accession a major foreign policy success story

The current government's largest foreign policy success to date, entry to the Organisation for Economic Cooperation and Development (OECD), was a milestone for Slovakia, not just in pursuing FDI but in helping it along the road to membership of even more important alliances such as NATO and the EU. Having fallen behind regional neighbours in joining western organisations because of the economic and political policies pursued by former Prime Minister Vladimír Mečiar, the government had been pushing for membership of the grouping.

The current government's largest foreign policy success to date, entry to the Organisation for Economic Cooperation and Development (OECD), was a milestone for Slovakia, not just in pursuing FDI but in helping it along the road to membership of even more important alliances such as NATO and the EU. Having fallen behind regional neighbours in joining western organisations because of the economic and political policies pursued by former Prime Minister Vladimír Mečiar, the government had been pushing for membership of the grouping.

But the admission to the 'club of the rich' - which gives Slovakia a chance to borrow at lower interest rates and sends a positive signal to investors - came perilously close to being put off another year as first the US wavered on its support for Slovak membership and then a dispute opened over audio-visual services just days before the government was expecting to receive an invitation to join the club.

Having been praised by the OECD's Trade Committee in February at a meeting in Paris, Slovakia seemed on course to join the organisation in September. Eric Burgeat, director of the Paris-based Centre for Cooperation with OECD Non-Members, said just after the meeting: "We have seen a strong commitment by the new government to meet the stated requirements and an open intention to do what is needed over the last 15 months. We can say that the process of Slovakia's entry into the OECD is now proceeding at a normal pace."

However, the mood of unbridled optimism changed overnight when in mid-May the US suddenly announced that it was concerned over progress of some structural economic reforms. The US objections flew in the face of overwhelming support for Slovakia from European Union member states within the OECD, and initial reactions from Slovak politicians were to question the economic concerns mooted by the US.

Finance Minister Brigita Schmögnerová said that the wavering in endorsement of Slovakia's OECD admission was probably due to 'non-economic' reasons, citing what at that time had been the opposition Movement for a Democratic Slovakia (HZDS)'s call for a referendum on early elections, and the April decision of the leader of the ruling coalition Democratic Left Party (SDĽ), Jozef Migaš, to vote against Prime Minister Mikuláš Dzurinda in a non-confidence vote.

Deputy Prime Minister for the Economy Ivan Mikloš flew directly to the US to plead the case. The US announced that support for Slovak admission was back on the day after US Steel clinched support for its acquisition of the Košice steel manufacturer VSŽ. The US and government officials denied there was any link between the two events.

However, having overcome that hurdle, government officials were left frustrated June 23 when their acceptance into the grouping was delayed on a technicality, the OECD citing a clash between France and the United States on audio-visual services as the reason. EU regulations state that a certain percentage of films shown on member country screens must be produced in the EU, a policy which the US called discriminatory. Slovakia, officials explained, had to wait to see which audio-visual rules it would abide by.

The admission came down to the wire as the OECD's final session of the summer, ending July 27, was heading for a conclusion without the question of Slovak membership resolved. But after late-night phone calls from Mikloš himself to OECD chiefs, and a specially extended session, the group announced July 28 that Slovakia had been invited to join.

The invitation brought to an end nearly two years of negotiations and, analysts believe, should promote a healthy inflow of FDI into Slovakia and speed the country on its way to NATO and the EU. Cabinet described it as a reward for its own hard-hitting economic reforms.

"The developed world now has trust in our reforms," said Prime Minister Mikuláš Dzurinda.

OECD Secretary Genereal Donald Johnston welcomed Slovakia into the group, praising Dzurinda's government for a "brave set of economic reforms."

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