Finance Ministry rejects IMF loan connection
Slovakia will not ask for a structural loan (EFSAL) from the World Bank, if the provisions stipulate a parallel stand-by loan provided by the International Monetary Fund (IMF), Finance Minister Brigita Schmögnerová told journalists on March 21.
"If the World Bank does not change its mind, thinking it's necessary to have a respective agreement with IMF, we will not accept the loan," said Schmögnerová, adding that the Finance Ministry would continue its discussions with the World Bank concerning the possible provision of an EFSAL loan without the requirement of a stand-by loan.
According to Schmögnerová, it is unnecessary for Slovakia to start the IMF programme because the Slovak government stabilised the domestic economy without the programme last year. The minister felt the acceptance of a stand-by loan from the IMF to be a "certain degradation of Slovakia" and, moreover, counterproductive in Slovakia's efforts to join the OECD.
Bankruptcy laws sent to parliament by cabinet
Cabinet on March 22 finally discussed and approved a package of 19 related laws known loosely as the 'Bankruptcy Law', passing them on to parliament for debate. The main goal of the reforms is to improve the position of creditors in the bankruptcy process, and to increase the protection of banks against credit risk. The government considers the package on of the most important legal changes to be made this year.
Finance Minister against sale of SPP-Transit
Finance Minister Brigita Schmögnerová said on March 21 that she would fight against the state's relinquishing any of its stake in the SPP-Transit gas company.
An Economy Ministry proposal for restructuring state-owned gas utility SPP includes creating joint stock companies from SPP-Distribution, SPP-Trade, Nafta Gbely and SPP-Transit.
"The state must keep this layer of golden eggs," Schmögnerová said at a meeting of Economic University students in Bratislava on March 21. She pointed out that SPP-Transit would be the most lucrative of all the four companies, since its revenues accounted for more than 50% (around 25 billion crowns, or $595 million) of SPP's annual revenues.
The Economy Ministry's proposal for the restructuring of the energy sector - expected to be submitted to the cabinet by the end of March - also includes dissolving state-owned energy utility Slovenské Elektrárne (SE) into 12 new joint stock companies, and splitting the country's three regional electricity distributors into nine joint ventures.
Standard and Poor's gives Slovakia positive outlook
The international ratings agency Standard and Poor's (S&P) announced on March 20 a BBB+ rating for Slovakia's long-term debts in Slovak currency, a BB+ rating for long-term debts in foreign currency, A2 for short-term debts in Slovak crowns, and a B rating for short-term debts in foreign currency. Government eurobonds were rated at BB+.
S&P stated that Slovakia's economic situation was typical for a country at the beginning of a transformation period, and should show signs of renewal shortly due to structural reforms. Improved development, the agency said, should result in sustainable economic growth with better investment opportunities and higher export potential.
S&P also noted the government's effort to consolidate public finances and decrease its debts, which allows more latitude regarding the revitalisation of the bank sector.
However, S&P negatively evaluated Slovakia's weak foreign currency position. This was due to the country's reserve assets in foreign currency covering only 55% of external financial needs, and a recent increase in foreign debt. The banking sector was also given low marks, despite government investment of 18.9 million crowns ($450,000) in bank restructuring and its assuming guarantees for classified loans.
Slovak Railways cruising smoothly, but still cash poor
The volume of goods transported by Slovak Railways (ŽSR) increased by one million tons in January and February 2000, representing a jump of 18% compared with the same period of last year. Daily revenues of ŽSR totalled approximately 40 million crowns, a ŽSR spokesman announced on March 21 in Bratislava.
Due to the positive developments, sales increased by 341 million crowns ($8.1 million) in the same period the year, representing a growth of 25%.
Revenues from passenger transport represented 14.6% of total revenues, up 41 million crowns compared with the same period in 1999. The increase for international transport was 1.4 million crowns.
Despite the positive results, the functioning of the railway was recently threatened by a worker's strike and remained in trouble due to a shortage of operating capital. ŽSR currently collects 672 million crowns per month, 187 million crowns less than needed to cover its expenses. Monthly personnel expenses constitute about 600 million crowns, which explained ŽSR management's unwillingness to agree to the dramatic pay rise demanded by workers.
Siemens branch hits building revenue heights
Landis and Staefa, a division of Siemens Construction Technologies Slovakia, Ltd., posted revenues of 22 million crowns ($523,000) last year, an increase of 84 million on the year, company General Director Ruslan Rajcev said on March 21.
Rajcev described the result as remarkable, considering the construction sector's deep recession and low investments, which have affected companies providing measuring and regulatory assistance.
One of the most technically demanding projects was the headquarters of the state-owned VÚB bank in Bratislava, which has been called 'the first intelligent building in Slovakia'. The company was also involved in the building of the St Cyril and Methodius hospital in Petržalka, all the Tesco hypermarkets and new hotels, including the current reconstruction of the Carton Hotel.
Compiled by Keith Miller
27. Mar 2000 at 0:00