The day is drawing closer when Slovak citizens will know if they are to be accepted into the European Union (EU). Fifty kilometers away from the Slovak capital of Bratislava, Austrian citizens are also watching the progress of Europe's youngest nation toward EU integration. While politicians lay the groundwork, over $900 million in trade has passed between the two nations in 1996, a new high.
With that trade boom, it's no wonder that Austrian officials are saying that Austria's economy will lose out if Slovakia fails to win early integration into the EU. Austrian Commercial Counselor Philipp Marboe said up to 1,500 firms from his country had established themselves across the border in Slovakia, which has become a major target for Austrian eastward expansion. Tariffs between EU and non-EU nations would put these firms at a competitive disadvantage in Europe, Marboe added.
The massive investment from Austrian firms makes Austria the largest foreign investor in Slovakia. Of the 850 million dollars pumped into Slovak coffers from foreign firms some 22 per cent is from Austria, amounting to some 1.9 billion shillings ($171 million).
Austrians often speak of the close geographic proximity of the two country's and the many business opportunities that exist for both. They do not want to see Slovakia fall behind the other Visegrad countries, the Czech Republic, Poland, and Hungary, because they would lose these business opportunities and an unstable entity would border their country. Slovakia has found an important friend to help push its economic case full of potential to the EU.
"The Slovak Republic recognizes that Austria supports Slovakia in EU integration," said Ivan Kačok, spokesman for the Minister of Slovak Foreign Affairs Jozef Hamžík. "Austria is one of the most important members concerning EU expansion since it borders non-EU countries. We rely on their political support for our cause."
Austria's new ambassador to Slovakia Gabriele Matzner-Holzer said that Austria supports Slovakia's integration into European structures since it is in Austria's interest that the iron curtain not be drawn again. Ambassador Matzner-Holzer has offered Austria's experience in joining the EU, which it did in 1994, to the Slovak government according to Kačok.
"If the wide gap in the political spheres could be brought closer together ensuring democracy, Slovakia could get on the fast track to the EU," said Richard Teichmann, president of the Austrian based firm Sibamac. "There is tons of potential to do business in Slovakia," he added.
Marboe also warned Slovakia to act over its international reputation with regard to democratic principals, which had meant that at present it was not regarded as one of the front runners for membership.
But he believes that the importance of Slovakia to Austrian firms means that the government in Vienna should use its influence with the EU to bring Slovakia back into the fold.
"It is very impressive the way Slovakia has adapted to the new economic conditions," said Marboe, pointing out that Slovakia and Poland had the highest economic growth of all the former eastern block countries, with a stable currency.
If questions of democracy persist, the Austrian investment already made, one third in the banking and service sectors, another third in the trade and transport and the rest in production, would suffer.
Although Austrian inward investment in Slovakia rose quickly with the fall of the iron curtain, it soon levelled out with the introduction of the coupon privatization program, with sales to native Slovaks heavily promoted by the government.
According to Marboe it is vital for Austria that Slovakia be in the first group of eastern European nations to join the EU. He said EU membership for Slovakia would allow Austria to counter the negative impact on Austrian investors of the coupon privatization scheme.
Marboe warned that there are dangers with regard to the trade and balance of payment deficits, but hoped for a considerable improvement in this area as 1997 progressed. To support this he highlighted the fact that Slovakia had launched an export offensive with a major export-import bank and also aimed to join the OECD.
On the trade front alone Austria is making large inroads into Slovakia, and in the first ten months of last year exports grew by 13.6 per cent compared with the same period the year before, reaching to just over $360 million. The total for the year is expected to be as high as $450 million for exports and $468 million for imports.
Top of the list for exports from Austria is goods with a 36 per cent market share, followed by partially finished products and then chemical products. Imports into Austria on the other hand consist mainly of finished products, followed by machinery and then fuel, including petrol and electricity.
Special reporting by Daniel J. Stoll
Author: Sue Tapply
