The revised Law on Strategic Companies, passed by parliament on November 20, effectively cancelled a much-criticised law allowing the debts of large firms to be forgiven by the government. Known as the Revitalization Law, the measure had originally been passed by the government of former Premier Vladimír Mečiar in 1997.
The cancellation of the Revitalisation Law, however, did not solve the problem of how to deal with projects already approved by the Central Revitalisation Commission, a body composed of government and senior bank figures which had been responsible for deciding which companies would receive leniency from the state.
At its session on September 30, four days after the electoral victory of the parties of the former opposition, the Central Revitalization Commission gave the go-ahead to 34 revitalisation projects, all of them concerning companies involved in the agriculture sector. The 34 companies had a combined debt of 850 million Sk ($23.6 million), of which state banks were to forgive 405 million Sk ($11.3 million) and delay installment payments on the remaining 445 million Sk. Most of the approved projects were submitted by agricultural cooperative farms, and their debts were held by the state-owned VÚB bank and Konsolidačná Banka.
The banks in question did not immediately repudiate the decisions of the Commission. "In individual cases, VÚB will consider offering some relief [to its agricultural sector debtors], such as prolongation or delay in payment of installments," said Norbert Lazar, VÚB spokesman. He underlined that debt relief is dependent on each client's submission of a solid plan for revitalising their firms, as well as on eventual repayment of the debts.
In October, independent of decisions taken by the Commission, VÚB agreed to almost half of the revitalisation projects submitted by agricultural companies.