In recent years the executive has focused its attention on the development of the business environment and has adopted various measures to improve its legal structures and support investment.
The minister indicates that the euro could be introduced in Slovakia in 2008.
– Following the successful implementation of economic reforms over the past decade, what is the political and economic situation of your country within the European context?
After ten years of macroeconomic reforms in Central and Eastern Europe, the most advanced economies, primarily those of the Visegrad Group, are now considered fully functioning market economies. Although the early 90s brought reforms that proved difficult for the population, living standards have since risen.
Over the past five years, Slovakia has implemented two sets of structural reforms. The first, following the 1998 elections, led to an increase in foreign direct investment and systematic restructuring. Furthermore, labor productivity improved significantly and employment increased during this period, particularly among low-skilled workers, while wages remained below those of OECD countries, giving Slovakia a significant advantage: low labor costs.
Following the subsequent elections in 2002, the previous governing coalition was restructured, and complex political reforms aimed at developing the national business sector were initiated. These reforms had two aspects: firstly, they focused on labor legislation, healthcare, and productive employment; and secondly, they aimed to create a fiscal and regulatory framework to support the establishment of new businesses and the overall development of the commercial sector.
The Slovak Government is currently developing, and to a greater or lesser extent will continue to develop, reforms in the business sector, the financial market, public administration, rural development and agriculture, the judicial field, healthcare, social security, transport, telecommunications and postal services, education, the information society, the environment and regional policies.
– What are the main economic challenges facing the current government in relation to national and international markets?
We are taking the necessary steps to ensure we can meet all the obligations required of candidates for EU membership and, after joining, participate in building the EU. This primarily concerns the common trade policy, the harmonization of international economic treaties and agreements signed by Slovakia with EU treaties, preparations for the single internal market, export support, investment incentives, and consumer protection.
– How is privatization progressing? Which economic sectors are being privatized, and which are priorities for your Ministry?
The priority in this area is to finalize the privatization of state-owned or National Property Fund assets in strategically important energy sector companies. We intend to complete the privatization of thermal power plants and energy distribution companies—Západoslovenská energetika, Stredoslovenská energetika, and V&Mac253;chodoslovenská energetika.
Regarding healthcare, the Government is privatizing healthcare facilities, or parts of them, which will then be under the control of the Ministry of Health.
In transport, the current priority is to finalize the privatization of four co-owned companies specializing in road passenger transport (SAD Bratislava, SAD Trenèín, SAD Luèenec and SAD Banská Bystrica), created with the assets of the formerly state-owned SAD companies.
– Regarding foreign investment, in which industrial sectors is Slovakia more competitive than other candidate countries for EU membership?
From the perspective of foreign investors, Slovakia's main competitive advantage is the high skill level of its workforce, as well as its low labor costs compared to other OECD countries. Other advantages include its strategic location, its integration into the global economy, the satisfaction of existing investors, a favorable tax system, and a robust investment incentive program.
Increasing competitiveness in all sectors of the Slovak economy remains one of the main criteria for economic and social development.
In the long term, the decisive factors are increased productivity (real increase in value generated per worker), increased pay directly related to productivity development, technological modernization, improved quality and product diversification (based on innovation and restructuring) combined with available factors of natural and intangible growth.
One of the main ways to support competitiveness is through the development of the business environment. The Slovak government has focused its attention on this issue and will continue to do so in the future. Furthermore, the government has adopted various measures to improve the legal, institutional, and regulatory structures for business activities and their administration, as well as compliance with the law. It has also adopted measures to support investment.
What is Slovakia's stance on the single currency? When will the Slovak krona be replaced by the euro?
The prerequisite for joining the EMU is the country's readiness to adopt the single currency and its capacity to meet the obligations arising from the Stability and Growth Pact. If the government achieves the objectives defined in its political program, if the Slovak National Bank's forecasts regarding the country's ability to meet the membership criteria prove correct, and if the necessary reforms continue to be implemented effectively, the earliest possible date for membership could be 2008. The Slovak National Bank has stated on several occasions that it supports joining the EMU as soon as possible.
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