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Guard changed at FNM

In yet another sweeping dismissal of civil servants installed by the previous government, the newly formed Slovak parliament replaced all top officials of the National Property Fund (FNM) privatisation agency on November 6. A new FNM presidium took over the function of the previous executive committee, and immediately declared its intention to review dubious sales of state property during the reign of former Premier Vladimír Mečiar.
"It is our political duty to re-assess privatization decisions under the former FNM management," said Vladimír Drozda, state secretary at the Ministry of Privatization. "We will be held accountable for our deeds by the people who supported us in the elections and who wanted the [privatization] mechanisms to change."

In yet another sweeping dismissal of civil servants installed by the previous government, the newly formed Slovak parliament replaced all top officials of the National Property Fund (FNM) privatisation agency on November 6. A new FNM presidium took over the function of the previous executive committee, and immediately declared its intention to review dubious sales of state property during the reign of former Premier Vladimír Mečiar.

"It is our political duty to re-assess privatization decisions under the former FNM management," said Vladimír Drozda, state secretary at the Ministry of Privatization. "We will be held accountable for our deeds by the people who supported us in the elections and who wanted the [privatization] mechanisms to change."

Parliament dismissed FNM president Štefan Gavorník and all members of the FNM presidium, and replaced the FNM supervisory board as well. Some FNM officials, such as Milan Rehák and Pavol Kačic, had already resigned their posts to take seats in parliament for Mečiar's HZDS party.

The main reason behind the dismissals of FNM officials was the conviction of many government members that the fund had presided over a clientist system of distributing state property at rock-bottom prices to people loyal to the Mečiar cabinet. Ivan Mikloš, the vice-premier for economy, was a vociferous critic of privatisation under 4 years of Mečiar government.

The new cabinet was also critical of the FNM's failure to obtain enough compensation from sales of state property to pay off the privatisation bonds issued by the Mečiar cabinet in 1994.

"In 1996, the Constitutional Court issued a verdict in which two of the three methods of privatization used by the FNM were declared unconstitutional," said Drozda, adding that the Privatization Ministry in cooperation with new FNM management would investigate the implications of the court's decision for sales made before and after 1996. "The table has to be cleaned first, and then we can start implementing a transparent privatization policy," Drozda added.

New FNM president Ľudovít Kanik confirmed that the FNM would initially focus on correcting past privatisation misdeeds. "The FNM bodies will have to create conditions for reviewing the entire privatization process to date," Kaník said. He added, though, that reviewing old contracts would not mean that "the FNM will turn into an inquisition body. I believe that there are enough proficient institutions that would perform this role."

Drozda explained that both the Ministry and the FNM planned first to review individual contracts and, if necessary, have them declared null and void. "If it is proved that the law was violated in a sale, the case will be taken to court," Drozda said, adding that if the court ruled the sale illegal, the property in question would be returned to the FNM and offered for sale again.

Drozda was not as optimistic regarding the hundreds of sales of state property which had been conducted legally, but which had left factories or companies in the hands of people bent on 'tunnelling' them - selling off the most valuable fixed capital and letting the firm collapse. "In cases where everything was done in accordance with legislative norms, it will be difficult to take away someone's private property," Drozda said.

At a November 10 press conference, Privatization Minister Mária Machová said that from 1991 to 1996, 1,218 state companies with a book value of 427 billion Sk ($11.9 billion) were sold. She did not reveal how much the FNM had actually received in payment for the state firms.

Machová criticised a 1994 decision by the Mečiar cabinet to transfer executive power on privatization from the government to the FNM. "On the basis of this transfer of powers, the FNM was able to decide on direct sales and change privatization decisions already issued by the cabinet," Machová remarked.

The new Privatization Ministry, Machová reported, was now focusing on privatization projects of medical facilities, and was preparing 109 privatization projects worth 2.7 billion Sk ($75 million). Also up for grabs are waterworks and sewage companies: 730 towns and villages, Machová said, had requested to purchase these utilities by the end of August 1998. State-owned transport companies were also mentioned, as 56 such firms worth 4.2 billion Sk ($117 million) have already been selected for privatization.

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