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Cabinet asks for softer EU criteria

The Slovak cabinet on June 10 approved a resolution asking the European Union's (EU) Association Council to extend the five year approximation period for another five years.
Submitted by vice-premier and Finance Minister Sergej Kozlík, the document was discoverd in the press two weeks after it was approved somewhat obscurely in a thick book detailing the cabinet's session. The cabinet's wish to off-handedly report such an important action sends two signals.
One, asking for an extension from the EU to keep secondary status for five more years thus ensuring economic protection contradicts the cabinet's rosy statements to the public that Slovakia is at the top of the economic list of the former socialist countries heading into the EU. But secondly, the cabinet realistically appraised the situation in requesting further economic favors from the EU recognizing that all is not well.

The Slovak cabinet on June 10 approved a resolution asking the European Union's (EU) Association Council to extend the five year approximation period for another five years.

Submitted by vice-premier and Finance Minister Sergej Kozlík, the document was discoverd in the press two weeks after it was approved somewhat obscurely in a thick book detailing the cabinet's session. The cabinet's wish to off-handedly report such an important action sends two signals.

One, asking for an extension from the EU to keep secondary status for five more years thus ensuring economic protection contradicts the cabinet's rosy statements to the public that Slovakia is at the top of the economic list of the former socialist countries heading into the EU. But secondly, the cabinet realistically appraised the situation in requesting further economic favors from the EU recognizing that all is not well.

The resolution relates to EU criteria that makes sure that state subsidies in particular EU member states don't prevent, limit or distort competition in the common EU market. Article 64 of the Association Agreement between Slovakia and the EU views Slovakia as equal to those "EU regions with extraordinarily low living standard or high unemployment," and therefore less strict criteria apply for evaluating Slovakia's state subsidies among EU member states.

The five-year period during which Slovakia had been considered such a region, expired on January 1, 1997, as the EU Association agreement with the former Czechoslovakia was concluded in December 1991. From now on, the much stricter EU criteria on judging state subsidies in Slovakia would apply, unless Slovak government asked for extending the period.

Evaluating Slovakia's economy in the resolution, the cabinet for the first time since 1993 took off rose-colored glasses and took a closer look in a mirror. "The structural changes have not reached the level that would ensure sustainable long-term economic growth," the resolution reasoned the move. "Also in other spheres of economy, there are processes which don't promise radical improvement - it is especially lingering high insolvency of both entrepreneurial and fiscal spheres, lingering relatively high unemployment, and deepening the current account deficit due to the trade balance deficit."

Just five days before approving the resolution in the cabinet, Mečiar at his party's monthly regular rally reiterated to his supporters his theory of Slovakia as economic leader of all post-communist countries, criticizing developments in the Czech Republic.

"For the first time in a while the Slovak economy is stronger than the Czech, and the Slovak crown is sturdier than the Czech," Mečiar roared. "Where are all those who used to doomsay 'three Slovak crowns for one Czech'," he asked. "Had we been a part of Czechoslovakia now, we would have suffered from everything that is going on there."

Mečiar's supporters don't seem to view his words and his cabinet's move as a glaring contradiction. "If the cabinet asks [the EU] for something like that, it has undoubtedly contemplated it for a long time and I'm convinced that it was a right decision," said Karol Konárik, an entrepreneur and deputy for Mečiar's Movement for Democratic Slovakia.

Konárik believes that as long as the EU allows us to stay in pampered market economy, we should enjoy it. "We are not very poor country, but we are not rich enough to be compared with top EU states, either," Konárik said. "And if Hungary has already asked for the same thing, why shouldn't we," he asked, referring to the fact that Hungary asked the EU for the same extension earlier this year.

On the other hand, opposition leaders such as Brigita Schmögnerová, a deputy for the Party of Democratic Left, consider the move a display of conflict between Mečiar cabinet's words and reality. "[The resolution] is in sharp contrast to the arguments about [our country's] good macroeconomic results that this government still dares to present to the public," Schmögnerová said. "They simply had to confess the color beause they had no other choice. All these talks that Slovakia will be on Switzerland's level by 2010, are merely fairy tales for common folk," she added, referring to another Mečiar's statement from earlier this year.

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