Spectator on facebook

Spectator on facebook

OECD entry delayed over technical dispute

With anticipation running high that Slovakia would at long last receive an official invitation to join the Organisation of Economic Co-operation and Development (OECD) on June 23, government officials came away disappointed after acceptance was delayed on a technicality.
The official reason cited for Slovakia's failure to receive the necessary unanimous support of all OECD members was a clash between France and the United States on audio-visual services. European Union regulations state that a certain percentage of films shown on member country screens must be produced in the EU, a policy which the US calls discriminatory since it feels the market should dictate which films are shown where. Slovakia, officials explained, had been caught in between, and must now wait to see which audio-visual rules it must abide by.

With anticipation running high that Slovakia would at long last receive an official invitation to join the Organisation of Economic Co-operation and Development (OECD) on June 23, government officials came away disappointed after acceptance was delayed on a technicality.

The official reason cited for Slovakia's failure to receive the necessary unanimous support of all OECD members was a clash between France and the United States on audio-visual services. European Union regulations state that a certain percentage of films shown on member country screens must be produced in the EU, a policy which the US calls discriminatory since it feels the market should dictate which films are shown where. Slovakia, officials explained, had been caught in between, and must now wait to see which audio-visual rules it must abide by.

Slovak Finance Minister Brigita Schmögnerová, who predicted it would take at least two weeks before the matter was settled, flew to Paris June 28 to speak with OECD officials about the delay, as did Slovakia's OECD negotiator Ján Jursa. Deputy Prime Minister for the Economy Ivan Mikloš also attempted to visit the June 26-27 OECD annual meeting to argue Slovakia's case, but an air strike in France grounded him in Austria. Despite the concerted pressure on Paris, however, no official deadline was available at press time for when Slovakia might expect an invitation.

Eric Burgeat, director for the OECD centre for cooperation with non members, said he was more than confident that the problem would be worked out soon. "I wouldn't say this is a setback. The OECD member countries and the secretariat know that entry is a technical process and needs to be completed according to regulations," he said. "An important element to recognise is that there is a strong political and diplomatic support to have Slovakia be admitted to the OECD. It's just a question of technicalities now, which in fact, is how it works with many international organisations."

Speaking on the condition of anonymity, an OECD Council insider in France agreed that the delay was a minor obstacle, but that its implications could be more severe. "It's just a shame that the timing has been pushed back a little bit because people interpret this to mean that there may be some serious disagreements," the source said. "But nobody that is involved sees it as anything fundamental - it's a technical snag and it's a bit of a shame because it's gets misinterpreted by different markets. I think everyone is a little disappointed."

Indeed, immediately following the announcement on June 23, questions arose in the Slovak media as to whether the glitch represented a deeper conflict between Slovakia and the United States. In the June 26 issue of the Národná obroda daily, anonymous sources were cited as saying that Slovakia's delayed acceptance was a pressure tactic by the US to coerce the would-be OECD member into taking a standby loan from the International Monetary Fund (IMF). At present, Slovakia has agreed to an IMF staff monitor programme to assist in the country's economic development, but has refused an IMF loan as unnecessary and harmful to the country's image.

Matthew Vogel, senior economist for emerging markets and fixed income research at Merrill Lynch, agreed that the audio-visual dispute was likely an indicator of something deeper, but couldn't say whether the deeper issue was related to the IMF.

"If there are questions about the Slovak government's commitment to the IMF and the World Bank, then a scenario of the US wanting to delay this [OECD membership] until they have more assurances may be possible, but I don't know if that is what is going on or not," Vogel said. "But I do agree that it is more than this audio-visual nonsense that they are talking about."

However, Mikloš advisor Vladimír Tvaroška said it was the Národná obroda article which was "nonsense", and said that while the IMF situation may have been important several weeks ago, it bore no relation to the current audio-visual dispute.

"Right now, the IMF is not the problem," Tvaroška said.

Ján Tóth, head analyst at the Dutch investment bank ING Barings, also said he was unconvinced that the problem was anything other than what had been openly discussed at the OECD. "I would trust the government when it says that OECD membership was delayed because of a bureaucratic problem between France and the US on audio-visual services," he said.

Tóth also downplayed the influence the stalled invitation might have on market perceptions of Slovakia. "I wouldn't exaggerate the impact of Slovakia not being accepted at this point because the markets expect Slovakia to be a member within the next four weeks. I think the markets in general are not disappointed and did not lose faith in Slovakia becoming an OECD member," Tóth said.

At the moment, he added, a more pressing problem might be the health of President Rudolf Schuster, who is hospitalised with a life-threatening condition.

"Right now, the situation could change a bit due to the uncertainties surrounding the President's health. The OECD or other institutions might be a bit nervous about the fact that there could soon be presidential elections, and since we have direct elections, the candidate would have to face [former Prime Minister Vladimír] Mečiar, and that could create extra political uncertainty," Tóth said.

Top stories

EU roaming fees to end on June 15 – in theory

Slovak customers still waiting to find out how mobile operators will implement change.

Archaeologist pieces together early history of what is now western Slovakia Photo

For an archaeologist, the most important thing is his most recent rare discovery, says Július Vavák.

Students visited Svätý Jur as part of their European Wanderer project

How to sell Slovak books to English readers

Slovak literature makes it to the big bookstores of London, but it is unlikely to become a bestseller yet.

On Wednesday, Slovak literature will be presented in one of the biggest bookstores in London. Among the new books translated into English is also the anthology of current Slovak prose selected and translated by Magdalena Mullek and Júlia Sherwood.

General Prosecutor filed a motion for the dissolution of ĽSNS

The Slovak Supreme Court received a motion to dissolve the extreme right ĽSNS party founded and led by Marian Kotleba.

Jaromír Čižnár