Truck drivers briefly blocked a main road leading into Bratislava on the morning of Thursday, January 7, in protest at the newelectronic road-toll system introduced at the beginning of the year. Further protests are planned. Photo: Sme - Pavol Funtál

Slovak policefoul-up leadsto Irish alert

A BIZZARE story has emerged involving abungled airport security operation at the in-ternational airport in Poprad, north-easternSlovakia, which resulted in high explosive be-ing inadvertently smuggled into Ireland onboard a flight to Dublin over the New Yearperiod. It came only days after the failure ofan alleged terrorist plot to detonate a device onan international flight from Amsterdam to De-troit, which was supposed to have led to in-creased vigilance at airports worldwide.

Amid heated discussion about the renewedterrorist threat and the need for stricter air-port controls and body scanners, the story of aman unwittingly transporting highly danger-ous explosive, which had been planted in hisluggage by Slovak police, by plane from Slov-akia to Ireland immediately hit the headlinesaround the world. As The Slovak Spectatorwent to print the affair had already resulted inthe resignation of a senior police officer.

According to Slovak police, during aroutine training exercise involving police dogsat Poprad Airport on January 2, an officer fromthe Slovak Border and Foreigners’ Police puttwo pieces of a high explosive, hexogen (RDX),which experts say is more powerful than TNT,among the luggage of passengers travelling ona Danube Wings airline flight from Poprad toDublin, Ireland.

See RDX pg 2

Border police mistakenlyplant explosive on plane

BY MICHAELA STANKOVÁSpectator staff

One year with euro passes troublefree

IN ONE SENSE, 2009 was the year ofthe economic downturn in Slovakiaand “economic crisis” was one of themost frequently used expressions inmedia reports last year. However, itwasn’t just a year of crisis; it was alsoSlovakia’s first year using the com-mon European currency, the euro.

Back in 2008, many people wereconcerned about potential price hikesas one of the side-effects of the newcurrency, which replaced the Slovakcrown used for the previous 15 years.

But the impact of euro adoptionon prices turned out to be negligible.

A year after the switch, it seems thatSlovaks have made their adjustmentsto the euro without major problemsand that the majority of the popula-tion feels positively about the euro.

State officials, economists and ob-servers agree that the country hashandled the transition to the euro ex-ceptionally well.

“Slovakia has adopted the eurowith admirable ease and withoutproblems. No systemic problems orcomplications have emerged,” theformer government plenipotentiaryfor adoption of the euro, Igor Barát,told The Slovak Spectator.

He added that surveys show evenpublic perceptions of the switch tothe euro are significantly positive,making Slovakia an exception amongadopting countries.

“Slovakia will enter economicstextbooks as a showcase example ofhow and why adoption of the com-mon currency can benefit a small,open – i.e. export-driven – economy,especially when over one half of itsexports are destined for customersin the eurozone,” Volksbank chiefanalyst Vladimír Vaňo told The Slov-ak Spectator.

Three quarters of Slovaks regardthe switch from the Slovak crown tothe euro positively, with youngerpeople tending to have the mostpositive attitude towards the euro,according to a survey conducted inOctober 2009 by the Institute of Pub-lic Affairs (IVO) and polling agencyFocus.

See €pg 12

Vol. 16, No. 1 Monday, January 11, 2010 - Sunday, January 17, 2010

FOCUSof this issue

On sale nowOn sale now FOCUSof this issue

MAJOR CHANGES IN LEGISLATION from page 6

NEWS

A year of electionsThe economic crisis and elec-tions will most significantlyshape the behaviour of themain actors on the Slovakpolitical scene in 2010. Polit-ical analysts make their pre-dictions for the year ahead.

pg 3

New Year's 'lament'Observers agree that therewas little point in PresidentIvan Gašparovič delivering aNew Year's address of the kindhe gave to the nation at thestart of this year.

pg 2

OPINION

Origin-of-assets sagaWhat prompts two politiciansfrom opposing political campsto submit very similar legisla-tion at almost exactly thesame time, less than half ayear before the national vote?

pg 5

BUSINESS

Prospects for businessThe Slovak Spectator spoke toJuraj Karpiš, an analyst withthe Institute of Economic andSocial Studies (INESS) thinktank about his views onSlovakia’s economic pro-spects, state spending and ad-option of the euro.

pg 3

BUSINESS FOCUS

Bills adopted in 2009The global economic down-turn was the main factors af-fecting Slovakia last year. Inorder to mitigate its impactsand boost the country’s eco-nomy, the Slovak governmentadopted a series of anti-crisispackages, including new le-gislation.

pg 6

CULTURE

Bridging barriersAven Romale was an outdoorphotographic exhibition onthe New Bridge , which dur-ing December displayed theworks of young Roma artistsfrom Košice.

pg 15

SSELECT FOREX RATES€ benchmark as of January 7

CANADA CAD 1.48 CZECH REP. CZK 26.37RUSSIA (1000:1) RUB 42.62GREAT BRITAIN GBP 0.90

HUNGARY HUF 270.30JAPAN JPY 133.50POLAND PLN 4.12USA USD 1.43

Highway toll systemexperiences shaky start

SLOVAKIA’S electronic highway tollcollection mega-project has beenbumpy from its very inception. Never-theless, the system – with a price tagof over €850 million – began opera-tions on January 1, 2010. While its op-erator calls the launch of e-toll collec-tion successful and problem-free,transporters and truck drivers liningup in 10-hour queues at border cross-ings are frustrated and are calling thelaunch a chaotic failure.

Operators of vehicles heavier than3.5 tonnes, buses and other vehiclesholding more than nine people includ-ing the driver, are now charged by thekilometre for driving on a total of 2,032

kilometres of Slovak highways andfirst-class roads. Highway transport-ers have been calling on the state tosuspend the system’s operation for sixmonths, saying it has not been suffi-ciently prepared.

The Union of Road Carriers (UNAS)launched a petition on January 4 de-manding that the state cut its excisetax on fuels as well as its road tax as aform of compensation for what they

call far too expensive highway tolls.The union is also demanding that thestate clearly marks the toll-road sec-tions and has called on Slovakia’s par-liament to meet promptly in a specialsession to discuss their demands.

If the union finds a deaf ear withthe government, the transporters saythey are ready to beef up their protestactivities around Slovakia.

The road carriers had originallythreatened to gather at petrol stationsand discuss their demands at thesesites, but no major public protestswere reported.

See QUEUE pg 4

BY BEATA BALOGOVÁSpectator staff

Budget deficittriples fromoriginal plan

LAST year’s economic downturn has taken ahefty toll on state coffers. While the actualstate budget deficit at the end of 2009 wasslightly less than the government’s Octoberbudget revision had planned, the final amountof red ink is almost three times more than theoriginal 2009 budget deficit planned by thegovernment of Prime Minister Robert Fico.

The state deficit amounted to €2.791 billionas of December 31, 2009 while the Octoberbudget revision had projected a deficit of€3.154 billion. The original budget for the statefor 2009 assumed a deficit of only €1.009 bil-lion, according to Slovakia’s Finance Ministry.

“The deficit was better than the projec-tions of the revised budget, which can be at-tributed to savings in current capitalexpenditures,” Finance Ministry spokesmanMiroslav Šmál told the SITA newswire.

See STATE pg 12

BY BEATA BALOGOVÁSpectator staff

BY BEATA BALOGOVÁSpectator staff

RDX: Border Police chief resignsContinued from pg 1

The dogs succeeded in finding bothpieces, but the policeman accidentally leftone of them, a package containing 10 - 90g ofthe substance, among the luggage. When herealised his mistake, he notified the airportadministration but not his superiors, whomhe informed only on Monday January 4, theSITA newswire reported.

The explosive, attached to a backpack,was then unwittingly carried by a Slovak cit-izen back to his home in Dublin. The mediareported that the passenger, who did not no-tice the package, is a 49-year-old electricianworking in Dublin who was returning fromhis Christmas holidays in Slovakia.

The Slovak police admitted their mistake,but said Dublin airport had been informedabout the presence of the explosive on theflight from Poprad and failed to find it amongthe passengers’ luggage upon its arrival inDublin. However, the Breaking News portalquoted a spokesperson for Dublin airport say-ing that they had not received any notifica-tion until Tuesday morning.

The director of Poprad Airport, IvanaHerkeľová, told The Slovak Spectator that theairport had informed its Irish counterpartabout the explosive after the departure of theplane.

“The plane departed at 12:07 and the telexmessage from SITA [a communication net-work used by airlines and airports] was sent at12:32,” Herkeľová said. “Apart from that, wecontacted the captain of the aircraft after helanded in Dublin and told him that we hadsent the message [to Dublin]. Dublin Airportwas notified also by the crew and the secondpilot of the plane was even present at the un-loading of the luggage. However, the explos-ive sample wasn’t found.”

However, Danube Wings issued a state-ment saying that the cabin crew had not beennotified about the presence of high explosiveon board the plane.

“The crew of the aeroplane was informedafter departure from Poprad-Tatry Airportfrom the control tower that a harmlesssample for dog training remained in one pieceof checked-in luggage on the plane,” thestatement of Danube Wings reads. “This in-formation wasn’t in conflict with the securityrules and didn’t prevent the continuation ofthe flight, otherwise the pilots would not

have continued flying, according to the secur-ity rules of Czech Airlines [which operatesDanube Wings flights].”

The head of the Slovak Border and For-eigners’ Police, Tibor Mako, told a press con-ference at Poprad Airport on January 6 thatthe lives of the passengers on the plane hadnot been at risk because the explosive is nothazardous on its own, and would require ad-ditional componentsto function as a bomb.

The main Irish and world media reportedon the incident on January 5 after the Irish po-lice, notified by their Slovak counterparts,closed two streets in Dublin around the housewhere the man who unwittingly carried theexplosive resides and sent experts to disposeof the explosive.

According to the news website of Ireland’spublic broadcaster, RTÉ, which was the firstnews source to report on the incident, adjoin-ing homes and businesses were evacuatedduring the operation as the Irish Army Ex-plosive Ordnance Disposal Unit removed theexplosive for further analysis. The Slovak cit-izen was arrested at the scene, but was laterreleased without being charged once Irish po-lice were satisfied that he was innocent.

Mako said, as quoted by SITA, that hefound the actions of the Irish police surpris-ing, as his officers had informed their Irishcounterparts about the location of the explos-ive and the circumstances of how it got toDublin.

The Irish Department of Foreign Affairssaid the Slovak Minister for the Interior hadconveyed his government's profound regretfor the incident to Irish Justice MinisterDermot Ahern. Ahern said he was very con-cerned about the fact that the Irish policewere not alerted for three days and has askedfor a full report, RTÉ reported.

A spokesperson for the Slovak InteriorMinistry, Erik Tomáš, confirmed on January6 that Interior Minister Robert Kaliňák hadspoken with Ahern by telephone the day be-fore and had also called the Slovak citizen inwhose luggage the explosive was planted inorder to apologise to him.

“We regard the whole incident to be anindividual professional failure of a police of-ficer for which he will most likely face a dis-ciplinary proceeding,” Tomáš wrote in astatement to the media. He also wrote thatthe minister would not hold the superiors ofthe police officer responsible, as they were

notified about the problem after a delay of twodays, after which they contributed to resolv-ing the problem.

Tomáš said that Kaliňák regarded theChief of the Border Police Mako, who hadoffered to resign, as an experienced expertwho had proven his worth a number oftimes. However, after criticism of the policeand the minister mounted on Thursday,January 7, Kaliňák abruptly changed hismind and accepted Mako’s resignation.

The ministry said it had suspended thekind of explosive detection training used inPoprad following the incident.

Slovak opposition parties reacted imme-diately to the scandal with strong criticism.The biggest opposition party, the SlovakDemocratic and Christian Union (SDKÚ), an-nounced it would try to initiate a session ofthe parliamentary committee on defence andsecurity, so that deputies could hear the ex-planation of the interior minister.

The Christian Democratic Movement(KDH) chairman Ján Figeľ called on the in-terior minister to take steps to stabilise thesituation and then resign from his post.

“The scandal reflects severe failures con-nected with the violation of the law, it has aninternational dimension and significantlyharms Slovakia abroad,” Figeľ said, as quotedby the TASR newswire.

Meanwhile, the world media includingthe BBC, CNN, the Guardian newspaper, andall the leading Irish media, reported on thestory. All of them at first mistakenly identi-fied the Slovak airport involved to be in Bratis-lava instead of Poprad.

The foreign media interest was boosted bythe fact that it came only days after manycountries had stepped up airport security fol-lowing an alleged attempt by a passenger on aChristmas-Day flight from Amsterdam, inthe Netherlands, to the US city of Detroit todetonate explosives attached to his body.

However, Herkeľová told The Slovak Spec-tator that the training exercise which led tothe incident was not related to the events inthe USA, and that it was a routine procedureby the border police.

The European Commission has requestedinformation about the incident from theSlovak authorities and will get involved ifflaws are found in the actions of the Slovak po-lice, Fabio Pirotta, spokesperson for theEuropean transport commissioner, said.

President broadcastsNew Year ‘lament’

THE PRESIDENT’S address tothe nation on New Year’s Dayhas a long tradition in Slovakia,dating back to the firstCzechoslovak Republic. Despitethat heritage, observers agreethat there was little point inPresident Ivan Gašparovič de-livering a speech of the kind hegave to the nation at the start ofthis year; viewing figures sug-gested that, in fact, few Slovaksseemed keen to hear what hehad to say anyway.

The president started his ad-dress with an account of thegood news that he said the pastyear had brought to the country.

“We have successfully man-aged the currency switchoverfrom the Slovak crown to thecommon European currency,the euro,” he said. “We managedto adopt the Lisbon Treaty. Wehave also moved ahead with

construction of new roads, en-ergy self-sufficiency, and get-ting local self-governmentcloser to the citizens. However,we have not managed to get offthe ground and give a properemphasis and tempo to lifelongeducation, development of re-search and culture – the spiritualworld of our society.”

He briefly mentioned the20th anniversary of the VelvetRevolution that Slovaks com-memorated in November andthus concluded his attempt tobalance 2009.

He then went on to say thatthere is much work ahead of Slov-akia in 2010, and referred to theSlovak bishops who in their letter

to believers encouraged people tostrive for greater solidarity.

“We have to help eachother,” Gašparovič said. “Thestate to the citizens, and the cit-izens to the state. Everybodywins with solidarity. Those whogive help, and those who receiveit. Outreach is particularly im-portant now, in this period ofeconomic crisis.”

Politics was nearly absentfrom the president’s address. Hemade only brief remarks relatedto the political life of the coun-try, saying that the political sys-tem in Slovakia is more favour-able to political parties than tocitizens. Ahead of a year that willbe marked by national elections,he noted how important elec-tions are for a democracy.

“Elections are an opportun-ity to freely express an opinionabout society, its politics, andabout the needs of the people.We should not underestimatethem,” said Gašparovič.

See TV pg 13

Origin of assets bill on agenda again

THE UPCOMING parliamentsession will deal with twodrafts pertaining to individualsproving the origin of theirproperty. One of the drafts wassubmitted by Prime MinisterRobert Fico and the second byDaniel Lipšic from the Christi-an Democratic Movement(KDH). They both want to makea so-called small amendment tothe Slovak Constitution, whichwould require a super-majorityof three-fifths of the parlia-mentary deputies and thusvotes from deputies of coalitionand opposition parties, theSITA newswire reported.

Previous attempts to adoptsuch a bill were not successful;the last attempt from 2005 wasruled unconstitutional by the

Constitutional Court. In re-sponse to the court’s decision,both Fico and Lipšic propose toincorporate an article on prop-erty rights into the Slovak Con-stitution.

Lipšic opposes Fico’s ideathat the law should apply onlyto personal assets acquiredafter 1990 but he has not ruledout agreement with Fico’s Smerparty on this aspect of the law.

If the cabinet approves theprime minster’s draft at its firstsession on January 13, it couldbe placed on the parliamentaryagenda in February, SITA repor-ted. Fico expects his coalitionpartners to back the proposalbecause such a bill is in thegovernment’s programmestatement.

NEWS in short

2 January 11 – 17, 2010 NEWS

President Ivan Gašparovič addresses the nation. Photo: SITA

OSCE okays language law guidelinesAFTER the guidelines toSlovakia’s controversial StateLanguage Act became effectiveon January 1, Knut Vollebaek,the High Commissioner on Na-tional Minorities for the Organ-isation for Security and Co-op-eration in Europe (OSCE),whose office was involved indrafting the guidelines, issueda statement in which he ex-pressed his approval of them.

“The text of the Principlesunderwent a number ofchanges in the process ofadoption,” Vollebaek wrote in astatement dated January 4.“However, I welcome the adop-tion of the Principles, sincethey provide the needed guid-ance for applying the provi-sions of the amended StateLanguage Law and for oversee-ing the implementation of theobligations it establishes.”

The Government Principlesfor the Implementation of theState Language Law provide forrespect for non-discriminationand proportionality and shouldthus safeguard the right of per-sons belonging to nationalminorities to use their mothertongue in the private and pub-

lic sphere, Vollebaek wrote.Vollebaek expects the Slov-

ak authorities to closely monit-or and evaluate the imple-mentation of the State Lan-guage Law, particularly withregard to the imposition offines in order to avoid unduelimitations on the use of minor-ity languages, and he said heintends to remain engaged onthis matter “until the balancebetween strengthening theState language and protectingminority rights is achieved”.

The Slovak ministers of for-eign affairs and culture wel-comed the statement as con-firmation of the state’s asser-tion that the language law isjustified while simultaneouslyrespecting standards for theuse of minority languages,SITA reported.

The Hungarian CoalitionParty (SMK), which has con-sistently opposed the revisedlaw, by contrast said that thestatement by Vollebaek de-mands that the Slovak gov-ernment adopt an improvedlaw on the use of minority lan-guages and passes a complexact on minorities, SITA wrote.

Čaplovič wants more boarding schoolsSLOVAKIA’S Deputy PrimeMinister for a Knowledge-Based Society, European Af-fairs, Human Rights andMinorities, Dušan Čaplovič,plans to open three or four ad-ditional boarding schools forRoma children in cooperationwith the Education Ministry bythe end of this election term inJune 2010, the SITA newswirereported.

Čaplovič believes that thetalents of many Roma childrenare not sufficiently developedin their domestic environmentand thinks that primary andsecondary boarding schoolswould give the children achance for a better life.

Presently there is oneeight-year secondary grammarboarding school in Slovakia.Čaplovič, who is proud of thisfirst project, considers it to be asuccess that this school re-mained open after it was relo-cated first from Zvolen, then toLučenec, and now to Kremnica.

The NGO Amnesty Interna-tional Slovakia disagrees withČaplovič and says the conceptof boarding schools for Romachildren does not represent anideal solution to the educa-tional problems facing Romacitizens, as boarding schoolswould be available to a negli-gible number of Roma childrenand would further deepen se-gregation of Roma children.

“We believe that the viceprime minister’s priority untilthe end of the election termshould be to admit there is se-gregation in the Slovak educa-tion system and to ensure pre-cise monitoring of the ban onsegregation at Slovak schools,rather than pursuing the ideaof boarding schools,” BranislavTichý, the director of AmnestyInternational Slovakia, toldSITA.

Compiled by Spectator staff

from press reports

BY MICHAELA STANKOVÁSpectator staff

The prospects forbusiness in 2010

THE ELECTION year will lessenthe willingness of politiciansto adopt unpopular measuressuch as reducing public spend-ing or increasing taxes, saysJuraj Karpiš, an analyst withthe Institute of Economic andSocial Studies (INESS) think-tank. The Slovak Spectatorspoke to Karpiš about hisviews on Slovakia’s economicprospects, state spending andadoption of the euro.

The Slovak Spectator (TSS):What factors or expectedchanges will have the mostsignificant impact on eco-nomic developments in2010?

Juraj Karpiš (JK): Of keysignificance for Slovakia’s eco-nomy in 2010 will be whetherforeign demand, whichdropped considerably duringthe downturn, will revive. If itturns out that the revival of theeconomies of western Europe isreal and not just an illusion in-duced by fiscal stimuli, then itwill be good news for Slovakia’seconomy.

TSS: Which areas of the eco-nomy will continue to bemost seriously affected bythe crisis and which sectorscan expect faster recovery?

JK: The most affected havebeen the financial sector,mostly abroad, and cyclicalbranches of the economy, forexample the automotive in-dustry and construction. Con-sidering the prevailing prob-lems which resulted in thedownturn, I expect that thesebranches will also suffer in2010, perhaps with the excep-tion of some constructionfirms working on public high-way construction projects.

TSS: In its December analysisINESS asserts that the gov-ernment has been wastingtaxpayers’ money. How didyour think tank arrive at thisconclusion?

JK: Our analytical projectcalled “Wasting by the State” isan effort to at least approxim-ately quantify the wasting ofpublic funds and cronyism inpublic procurement. Withinthis project we monitor Slovakprint media and from revealedand published cases of money-wasting and cronyism we puttogether a database throughwhich we can estimate theamount of wasted public fin-ances for a certain time period.

The numbers for the firstthree quarters of 2009 showthat there is a huge opportun-ity to improve the effective-ness of the state administra-tion and public procurement.The project has recorded casesin the money-wasting categorytotalling €333 million.

During the first threequarters of 2009, serious sus-picion of cronyism withinprocurement by the stateamounted to €145 million.Thanks to investigative work

by journalists and the sub-sequent media pressure, po-tential cronyism in the stateadministration worth €160million has been prevented.

TSS: Do you expect anychange in these trends for2010?

JK: Considering the factthat under the current gov-ernment cases pertaining tocronyism and wasting of publicfunds have been emergingquite frequently without ad-equate response in the pro-curement legislation or byholding people responsible, wedo not expect that any signific-ant change will emerge untilthere are in-depth changes inthe management of ministries.

TSS: How do you evaluateSlovakia’s first year with theeuro?

JK: No significant problemsemerged during the process ofthe adoption itself. However, itis too early to evaluate thewhole process of euro adoption.For some groups in society theeuro has been a good step whileit has been negative for others.While those who had their sav-ings in Slovak crowns can besatisfied, exporters are not thatenthusiastic.

TSS: What are the greatestadvantages and disadvant-ages that Slovakia currentlyexperiences as part of theeurozone?

JK: In regards to the eco-nomic crisis, the euro hasbrought both positives andnegatives. On one hand, it waspossible to protect the purchas-ing power of Slovaks’ savingssince these did not weaken asthey did in neighbouring coun-tries because of currency de-valuation.

Membership in the euro-zone also resulted in lower ex-penses for financing Slovakia’sstate debt. The other side of thecoin is that the strong euromade our products and labourmore expensive and less com-petitive in international com-parison. Another negative isthat through our membershipin the eurozone we are parti-cipating in the risks flowingfrom the unhealthy Europeanbanks and there is a possibilitythat through a loss in value ofthe euro we will share part ofthe cost for their recovery.

The crisis has also revealeda question facing the euro – acontradiction between politi-cians in individual countriesand the unified monetarypolicy. The crisis has only in-tensified this tension. Manycountries of the eurozone haveignored the rules of the Growthand Stability Pact and it is ques-tionable whether and how theeventual costs of saving coun-tries with irresponsible fiscalpolicies will be distributedamong the other members ofthe eurozone.

It is possible that this issuewill emerge soon consideringthe large problems of Greece. Ifthe European Central Bankhelps this or any other country,then it means that Slovaks willshare these costs.

3January 11 – 17, 2010NEWS / BUSINESS

National elections setto dominate 2010

ANOTHER year of crisis and elec-tions. This is how political ana-lysts characterise the new yearof 2010, saying that the amelior-ating the global economic crisisand the forthcoming nationalelections will most significantlyshape the decision-making andbehaviour of the main actors onthe Slovak political scene.

Political developments inSlovakia will be framed by twomajor elections. The June na-tional parliamentary electionscome first and are expected tocause some turmoil, thoughthey are not expected to bringany significant changes to thecountry’s basic political ori-entation. Then in late autumn,Slovaks will go to the pollsonce more to elect mayors andlocal parliaments for theirmunicipalities.

Grigorij Mesežnikov, thepresident of the Institute forPublic Affairs (IVO), said the par-liamentary elections will cer-tainly play the dominant role inthe first half of the year.

“Topics will be selected withregard to their potential to in-terest the electorate,” he toldThe Slovak Spectator.

The beginning of the secondhalf of the year will be domin-ated by the results of that elec-tion and the formation of a newstate-level governing coalitionand only after that will the mu-nicipal elections become a topicof public discussion.

“The municipal elections arenot that significant in drawingmedia interest, but they are veryimportant for the functioning ofthe state administration so thepolitical parties will definitelybe interested in them,”Mesežnikov said.

The global economic crisiswill continue resonating amongSlovak society as well and it willshape the political life of thecountry much as it did in 2009.

Coalition expected to be stable

Mesežnikov does not expectthe current ruling coalitionpartners, Smer, the Slovak Na-tional Party (SNS) and theMovement for a DemocraticSlovakia (HZDS), to change theirbehaviour much because of theapproaching elections, eventhough the existing coalitiontreaty will no longer be bindingon the partners.

“The question is not theformal force of the coalitiontreaty, but the firmness of thebonds between the coalitionpartners – and they are veryfirm,” Mesežnikov said, addingthat the members of the presentruling coalition have a lot incommon – not only in terms oftheir political and material in-terests, but also a shared politic-

al culture and a common way ofdividing up public finances viacronyism and nationalism.

“What’s relevant is that theywant to remain in power as longas they can, at least to the end ofthis election term, and to use allthe advantages that it brings andcreate conditions for further co-operation after the elections,”Mesežnikov said.

Political analyst MiroslavKusý also does not believe thatdiffering opinions inside the rul-ing coalition will sharpen verymuch.

“The prime minister is giv-ing hope to every party [includ-ing the opposition parties] thatthey can be a part of the futurecoalition, so they will not go des-troying their chances,” Kusý toldThe Slovak Spectator. “This is histactic. He gives hope to everyone of them and keeps them un-certain. He says that everythingwill show after the elections andthat he will decide only then, sonow everyone wants to appearacceptable in his eyes.”

Juraj Marušiak, a senior re-search fellow from the Instituteof Political Sciences of the SlovakAcademy of Sciences, said, incontrast, that relations betweenthe coalition parties havealready changed which has beenshown especially by Prime Min-ister Fico’s sharp criticism andopen attacks on SNS.

“It’s hard to talk about anyforce of the coalition treaty afterthe SNS was stripped of the En-vironment Ministry [due to theemissions quotas sale and othercorruption scandals],” Marušiaktold The Slovak Spectator.“However, I don’t expect theHZDS and SNS to have a real in-terest in confrontation withSmer that would make their co-operation after the electionsimpossible.”

Smer to remain powerful

Mesežnikov says there arethree possible outcomes of theelection. Most probably, he said,the political orientation of thecountry will not change at all,since he believes that if Smer,HZDS and SNS get enough votes toform a government again, none ofthem will hesitate to do so.

“Smer will not hesitate forsure,” Mesežnikov said. “After

all, it gained full membership inthe Party of European Socialists(PES) despite being a part of thisruling coalition [with the na-tionalist SNS and internation-ally-unacceptable VladimírMečiar from the HZDS], and alsothe corruption scandals [mostlyamong its coalition partners] didnot lower Smer’s support amongthe voters very much,” he said.

A second possibility whichwould come into play especiallyif SNS or HZDS do not garner the5-percent voter support re-quired to enter parliament, isthat Smer would form a coali-tion with one or several of thecurrent opposition parties. Inthis event, all the analysts in-terviewed by The Slovak Spec-tator agreed that the potentialpartners could be either one ofthe two ethnic Hungarianparties or the Christian Demo-cratic Movement (KDH).

The least probable of thethree possibilities, according toMesežnikov, is that a new gov-ernment would be formedwithout Smer – either of all thecentre-right parties that crossthe threshold to enter parlia-ment, or an alliance of the cur-rent opposition parties withthe HZDS.

According to Marušiak,Smer is and will remain thedominant party until the elec-tions, as it has stable politicalsupport, and is therefore mostlikely to be the leading party informing the new government.

“At the moment Smer iskeeping its hands free to chooseits coalition partner(s) untilafter the elections, but the factis that they will hardly findmore loyal partners than HZDSand SNS,” Marušiak said. “Allthe other possible partners havea significantly higher coalitionpotential, but that would meanthat they would be much moreindependent from Smer and thegovernment would be muchmore vulnerable.”

Kusý does not give muchchance to the current opposi-tion in the 2010 elections be-cause he says they have notdone anything to improve theirchances.

“All of them, and especiallythe Slovak Democratic andChristian Union (SDKÚ) main-tain a passive approach, as if

they were showing that theydon’t have a chance to winanyway, so why even try andget bound by some allianceagreements,” Kusý said.

He expects that the centre-right opposition parties willeach go into the national elec-tions on their own which hesays means that they are layingdown their weapons before thefight even starts.

Hungarian card expected again

Experts also agree that thenational elections in Hungary,planned for the spring of 2010,will have an impact on Slovakpolitics as well and may causetensions in Slovak-Hungarianrelations to escalate again.

“At the moment I have afeeling that the tension hascalmed down, but we know thatthe Hungarian card is alwaysused in Slovak elections,”Mesežnikov said, adding that heexpects especially Smer and theSNS, but also other parties, toseek to use Hungarian issuesduring the election campaign.

“It’s now clear that Fideszwill win the elections in Hun-gary as it is very orgainsed andhas, de facto, no competitors,”Mesežnikov said. “And it willwin also thanks to strong na-tionalist rhetoric about defend-ing ethnic Hungarians livingoutside Hungary. This willthen be used, in my opinion, bySlovak politicians such as Ficoand Slota who will point toHungary and talk about risingnationalism there.”

Marušiak also remainspessimistic about relationsbetween the two countries. Hesays real change in the bilateralrelations can only happen afterthe elections. But the problemis that the political elites ofboth countries welcome thetension as it allows them tomobilise a considerable part oftheir electorates.

“I think a change could besustained by a combination ofpressure from civil societygroups in both countries and in-ternational structures, particu-larly the EU, which should res-olutely call on both parties tobehave as members of theEuropean Union are expectedto,” Marušiak said.

Political analystslay out theirexpectations

BY MICHAELA STANKOVÁSpectator staff

Observers predict Prime Minister Robert Fico will emerge victorious in the 2010 elections. Photo: SITA

BY BEATA BALOGOVÁSpectator staff

4 January 11 – 17, 2010 BUSINESS

Demand for newlywed loans predicted

SOFT consumer loans for new-lyweds will likely attract muchattention but bankers do notexpect them to significantlyaccelerate the overall growth ofconsumer loans.

“We do not assume that thelaunch of consumer loans de-signed for newlywed coupleswill radically speed up expec-ted growth of all consumerloans,” said Robert Prega, asenior analyst at Tatra Banka.

VÚB Banka spokespersonAlena Walterová said thatyoung families will likely usethese reduced interest loans tofurnish their homes. She saidthat she expected the productto be a success, similar to mort-gages designed for youngpeople.

“Nonetheless, it cannot beexpected that their portion ofall consumer loans could reacha similar volume as in the caseof soft mortgages to youngpeople, which make up 38 per-cent of all newly-providedmortgages at present,” shesaid, as quoted by SITA.

UniCredit Bank analystDávid Dereník believes thatnewlyweds will make use ofthese loans during the econom-ic crisis, while lower prices ofreal estate will also motivatethem. In his view bonuses likethis should be some kind of mo-tivation, taking into accountpeople’s life cycle.

Newlyweds will be able toapply for soft loans from April2010. The reduced interest rateon the loans will be 4.5 percentless than the commercial rate.The state will cover 3 percent ofthe interest and commercialbanks will be obliged to reducethe interest rate by an addi-tional 1.5 percent when theloan is provided.

The law sets relativelystrict income criteria for ap-plicants to qualify for theseloans. The combined gross in-come of a couple may not ex-ceed 2.6 times the average nom-inal wage reported by the Slov-ak Statistics Office and thecouple must be younger than 35to qualify.

Cosmetics firms fined

THE ANTITRUST Office hasordered the FM Group Worldcompany and its exclusive dis-tributor in Slovakia, FM GroupSI, to pay a fine of €13,400. Theantitrust office concluded thatthe firms violated the law onprotection of economic com-petition by concluding a fran-chise contract on distributionof FM cosmetics that containeda provision directly setting theprice of further sale by its dis-tributor, the SITA newswire re-ported.

According to the regulator,agreements of this kind are il-legal because their substancerestricts economic competi-tion. The authority consideredseveral factors in setting theamount of the fine, includingthe character of the agreement,the level of competitionbetween brands and the impactof the behaviour of FM GroupWorld and FM Group SI on thecompetition. The companiesacknowledged that theybreached the law.

BUSINESS in short

Minimum wage up by 4.1 percentTHE MINIMUM wage for em-ployees working in Slovakia in-creased by 4.1 percent to€307.70 per month on January1, in line with a governmentdecision made last October, theTASR newswire reported.

The Labour Ministry ori-ginally planned to increase lastyear’s minimum wage of€295.50 per month by 8.1 per-cent, as proposed by the tradeunions. The tripartite partnersmet several times to negotiatethe issue, beginning last Au-gust, but were unable to reachan agreement and the govern-ment then decided to mandatethe increase at 4.1 percent.

“I insist that this [increase]shouldn’t have the sort of im-pact that could cause aproblem,” said Labour MinisterViera Tomanová, adding thatthe government is protectingthe most vulnerable group ofcitizens that work for the min-imum wage.

The original proposal for an8.1 percent increase was di-vided to cover a two-year peri-od, 2010-2011. “If the level of theminimum wage isn’t agreed onby the social partners, the in-crease in 2011 will reach anoth-er 4 percent above the level ofthe minimum wage that will bein place,” Tomanová told TASR.

Interminable Transpetrol dispute revivesONE of the most discussed ownership stakesin the history of privatisation in Slovakia isback in the news. It now seems likely thatlong-disputed shareholdings in the majorcrude-oil pipeline operator Transpetrol willcontinue to cause headaches for the Slovakgovernment.

In late December 2009, US investmentfund Cappa Fund III announced that it hadacquired a 34-percent stake in Transpetrolfrom a Czech company, Quick Power Plant,the Sme daily reported. It reported that theCzech firm had bought its shares from Slovakbusinessman Ignác Ilčišin and others.

According to Sme, Steve Richardson, themanaging director of American Cappa FundIII, announced the purchase in a press re-lease sent to American media outlets. Cappahas not disclosed the amount it paid for theshares. Richards described the acquisition asa strategic investment decision and sugges-ted that it signalled further investments inthe region. However ownership of the shareswhich Cappa claims to have bought is dis-puted. The Slovak government believes itself

to be the sole shareholder in Transpetrol, fol-lowing its purchase of a 49-percent stakefrom Yukos International last year.

A spokesman for the Slovak EconomyMinistry, Vahram Chuguryan, told Sme thatno foreign company had contacted the min-istry. The ministry has repudiated the legalprocess by which Ilčišin, and subsequentlybusinessmen close to him, claim to have ac-quired 647 shares in Transpetrol, Sme wrote.

However, Cappa claims to have examinedthe history of the shares and believes thatQuick Power Plant was indeed the actual own-er of the shares it bought. In the press release,Richardson says that Cappa is looking forwardto working with the Slovak government.

Lawyers acting for the ministry are re-ported to be analysing the situation in pre-paration for an eventual claim from the UScompany. Ministry lawyer Martin Kriváktold Sme that it would take action only afterthe American company officially contactsthe ministry.

“If they submit documents proving theirownership, we will certainly take a respons-

ible approach towards them,” Krivák said, asquoted by Sme.

The website of Cappa Fund III suggeststhat it focuses on energy projects in develop-ing markets. The owner of the fund is Cappa –Capitol Project Partners, Sme wrote.

The dispute between the Slovak state anda group of businesspeople close to Ilčišin star-ted in 1995. It began with a claim on Trans-petrol shares by the Humenné-based ILaScompany. The claim originated after the taxauthority wrongly blocked the company’srights to real estate in 1995. The companyclaimed damages based on a letter of intentsigned on August 18, 1995, to sell it a produc-tion hall. The company originally calculateddamages at Sk43.3 million. Based on a con-tested court action, ILaS eventually acquired34 percent of Transpetrol shares, then worthover Sk2 billion, from the Finance Ministry indistraint proceedings, but the transfer waslater annulled, the SITA newswire wrote.

Compiled by Spectator staff

from Sme reports

QUEUE: Transport firmscomplain about 'failures'Continued from pg 1

“We are giving the state sev-en days to negotiate with us,”Jaroslav Polaček, a spokesmanfor the carriers union, told me-dia at a press conference onJanuary 6 – adding that the uni-on will also address theEuropean Commission.

Rudolf Páleš of UNAS saidthat the e-toll collection is faironly if it works properly, addingthat since the most expensivebidder won the tender for the e-toll collection project the carri-ers expected that the systemwould work as it does in neigh-bouring countries.

“Unfortunately, this is notthe case,” said Páleš.

According to Páleš, thetransporters actually do notknow when they are travellingon charged highway sectionssince these are not marked withsigns. The carriers also claimthat they are unable to pay withfuel cards although, according toPáleš, these had been listed asone of the optional forms ofpayment.

UNAS insists that there arealso problems with the supply ofonboard units (OBUs), thevehicle-mounted device which isnecessary for the actual calcula-tion of the vehicle’s toll. Thetransporters also say the OBUsare miscalculating the toll forcertain road sections.

SkyToll, the builder and theoperator of the system, said thateverything is working just fine.

“I am glad that I can an-nounce successful operation ofthe e-toll system and a problem-free launch of all the processes,”said Matej Okáli, general directorof SkyToll, on January 3 in an of-ficial release sent to media.“Along with the collection oftolls, the registration of trans-porters continues smoothly too.”

SkyToll spokeswoman LenkaLendacká said that there are 13distribution spots at border cross-ings where foreign hauliers canbuy the onboard units. Foreigncarriers can access information atwww.emyto.sk in six languages.

Okáli admitted that thecompany received 28 complaintsin the first three days of opera-tion, most pertaining to un-delivered OBUs. He said thatSkyToll is reviewing each com-plaint and would respond with-in the period set by the law.

The e-toll collection systemis based on GPS-GSM satellitetechnology. The system includessix highway gates and 40 controlgates on parallel first-class roads.

SkyToll registered more than330,000 transactions and collec-ted €138,398 in tolls in the firstthree days, with 8,600 vehiclescarrying out at least one trans-action. The vehicles used a totalof 1 million kilometres ofcharged road sections, the SITAnewswire wrote.

Unhappy customers

Czech transporters do notshare the opinion that thelaunch was smooth. Two daysafter the e-toll system went intooperation, the Czech associationof transporters said that Slov-akia had failed to organise itproperly.

“Several-kilometre long andmore than ten-hour queues atborder crossings with Slovakiaare neither demonstrations norreminders of past years, but aresult of an organisational fail-ure linked with the launch ofelectronic toll collection,” Mar-tin Felix, of the Czech transport-ers' association Česmad Bohemiatold SITA.

Česmad Bohemia is com-prised of more than 2,000 busi-ness entities with more than20,000 vehicles. The associationcomplained that even thosetransporters who had orderedand paid for the OBUs monthsago could have not avoided thecomplications because they stillhave not received them. Nowthey have to wait in queues tocomply with the law and to“contribute not small amounts”to Slovakia for using its high-ways, said Felix.

The Sme daily wrote thatSlovak Transport MinisterĽubomír Vážny and the head ofthe National Highway Company(NDS), Igor Choma, were takingvacations during the launch ofthe system. Sme also reported

that Vážny’s Czech counterpartGustáv Slamečka has already in-quired about the long queues atborder crossings.

A three-kilometre traffic jamof trucks developed on January 4in northern Moravia in theCzech Republic at the bordercrossing near the village ofMosty u Jablunkova, a sitewhere there are not even toiletsavailable for drivers, Sme wrote.

The troubled project

The mega-project receivedextensive negative publicitywhen the contract to construct anationwide satellite-based sys-tem was awarded to the sole re-maining bidder, SkyToll – thesuccessor company to a consor-tium which had made the mostexpensive bid. The EuropeanCommission subsequently askedfor more information as to whythree bidders had been elimin-ated from the final round of thehigh-value tender.

The NDS, as the state admin-istrator of the e-toll system, hasforecast revenues from e-tolls of€165 million in 2010, with in-creases to €181.5 million in 2011and €199.65 million in 2012.

Slovakia’s Association ofRoad Transport Operators(Česmad) signed a contract withSkyToll to operate contactcentres in Slovakia’s eight re-gions as well as 13 distributioncentres, more than 90 distribu-tion centres in all, where truckand bus operators could acquirethe required onboard unitswhich connect their vehicleswith the satellite system.

The Union of Road Carriers(UNAS) has alleged that Česmadis supportive of the toll systembecause the association cancharge €112, not including VAT,for the installation of OBUsbased on its contract withSkyToll.

SkyToll reported on January5 that 66,453 vehicles had beenregistered in its system up tothat date and that vehicles haddriven 1,457,741 kilometres ontoll-road sections.

Onboard units have become an essential component for trucks andbuses using Slovak highways since January 1. Photo: Sme - Ján Krošlák

About 800 bankruptcies expectedSLOVAKIA should see a declinein the number of firms enteringbankruptcy in 2010. Accordingto estimates published by EulerHermes, a multinational insur-ance group, the number ofbankruptcies could fall byslightly more than 11 percent,meaning that the total numberof companies becoming insolv-ent will be around 800 over thenext 12 months, 100 fewer thanhad been expected previously,the TASR newswire reported.

The key factor in 2010 willbe governmental support fordomestic demand and how

much the Slovak cabinet stimu-lates the labour market, saidHelena Múdra, the CEO of EulerHermes Servis Slovakia.

“What needs to be taken in-to account, besides the situ-ation in Slovakia’s main exportmarkets, are measures that thegovernment might take in viewof the coming generalelection,” said Múdra, referringto the firm’s latest prognosiscovering Slovakia as well asworldwide developments.

Compiled by Spectator staff

from press reports

5January 11 – 17, 2010OPINION

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Origin-of-wealth saga resumesTHE IDEA of a legal whip to dis-cipline those in society whohave obtained their property inrather “interesting” ways re-emerges from time to timewhenever politicians are takenby a sudden populist urge toprove their devotion to trans-parency, the fight againstmoney laundering, cronyism ororganised crime.

There are certainly manyother ways to deal with peoplewho amassed fortunesovernight and manage to avoidgiving answers to inquiriesabout their lavish villas or lux-ury cars which could hardly beafforded from salaries as publicofficials, but none of thosemethods are as politically spec-tacular as getting a new lawpassed just a couple of monthsbefore upcoming elections.

After an almost four-yeartug-of-war over whether thereis any need at all for such legis-lation, which would requirepeople to prove the origin of“suspiciously” lavish property,now the country is suddenlyblessed with two such propos-als: one submitted by PrimeMinister Robert Fico and oneoffered by former justice minis-ter Daniel Lipšic. What promptstwo politicians from opposingpolitical camps to submit verysimilar legislation at the sametime, less than half a year beforethe national vote? Political gain.

Fico recorded a video-com-mentary for his blog where heexplains why Slovakia urgentlyneeds such a law. The primeminister is not a novice in sub-mitting such legislation. Hetook the initiative before, backin 2005, but the law that ger-minated from his efforts wasshort-lived: the ConstitutionalCourt ruled it to be at odds withthe country’s constitution.

One of the court’s objectionsto the 2005 law was that itswitched the burden of prooffrom the state to the chargedcitizen. The other failing of the2005 law, in the opinion of thecourt, was its retroactivity.Now, neither Fico nor Lipšic isoffering a remedy for these de-fects as both drafts again sufferfrom the same problems. Fico issuggesting that the way out of

this complicated legal dilemmais to modify the constitutionand then to re-introduce almostthe same law from 2005.

The prime minister wasquick to explain that his draft istuned for “extreme situations”and regular people need not fearits effects. Yet, this specious ar-gument sounds far too familiar

and emerges any time the stateoffers legislation which mightsomehow be at odds with con-stitutional rights. Fico also ar-gues that since the law pertainsonly to property which exceeds€300,000 or €450,000 it createscertain guarantees that it wouldapply only in exceptional situ-ations. Fico’s draft also specifiesthat the law would cover onlyproperty acquired after 1990.Legal experts, however, suggestthat this does not stop the legis-lation from being considered tobe retroactive.

Lipšic tuned his proposal ina way that it applies only toproperty exceeding 500-timesthe minimum monthly wageand his legislation gives no timelimit for acquired property towhich the law would apply.

If a decade ago, when therewas already plenty of criticismof fast-tracked wealth accruingto certain individuals, parlia-

ment had then produced a lawrequiring people to prove howand from what sources they hadacquired suspiciously lavishwealth, probably some well-known politicians would nowbe lingering in places other thanthe parliament building.

The piquant aspect of thiswhole prove-the-origin-of-your-wealth saga is thatVladimír Mečiar, boss of theMovement for a DemocraticSlovakia, along with Ján Slota,Mečiar’s counterpart in theSlovak National Party, Fico’s al-lies since 2006, have beenadamantly against any such billbecoming law. But it is almostimpossible to believe that thesetwo politicians are driven byreasons such as worry about apossible clash with importantpillars of Slovakia’s constitu-tion.

Mečiar is the owner of the(in)famous Elektra villa, whichhas become one of the mostwell-known symbols of thequickly-acquired wealth ofSlovak politicians and is evenmore illustrative of the kinds ofpreposterous stories that havebeen told to explain ‘how’ it wasmanaged. Years after Mečiarwas forced from government,journalists keep inquiring aboutwhose pockets paid for thisTrenčianske Teplice edifice.Their thirst for credible inform-ation still remains unquenched.Yet Mečiar now co-rules withFico. As for Slota, there are me-dia reports too numerous tomention detailing the luxuriousgrownup toys that the SNS bosshas at his disposal.

Well, after all, if Fico in theend fails to enact this legislationdue to a lack of support from histwo coalition partners he couldstill appear as the honest politi-cian trying to fulfil his promisesto go after those who improp-erly stuffed their own pockets.At the same time he might eventry to appeal to those voters whohave objected to the presence ofMečiar and Slota in his govern-ment. The problem is, however,that Fico is toying withsomething quite important –the constitution – just to makethe hearts of potential votersbeat faster.

BY BEATA BALOGOVÁSpectator staff

QUOTE OF THE WEEK:

Trapasy

RARELY has Slovakia experi-enced so much embarrassmentas in the first few days of this NewYear. Two “trapasy” have gainedthe country immediate interna-tional notoriety. First, the pack-age of explosives planted by po-lice in the luggage of an unsus-pecting traveller headed for Dub-lin, where local authoritieslaunched what appear to havebeen small-scale military man-oeuvres to secure the substanceand its innocent courier. Andsecond, the new electronic road-toll system, which collapsedright at its launch, causing havocat the country’s borders.

Not that 2009 had been ex-ceptionally good for Slovakia’simage. The state’s sale of emis-sions quotas for half the marketprice to an unknown US firm ap-parently set up by people close tothe ruling coalition baffled thecarbon-trading community. Thecabinet’s decision to declareHungary’s President Sólyom per-sona non grata also raised acouple of eyebrows. And it wasnot just human rights organisa-tions that were appalled by theabuse of Roma boys at a Košicepolice station.

But the early feats of 2010raise the concern that there mayactually be something to a recentdisaster film suggesting that 2012will see the end of the world. Justconsider the unbelievable num-ber of blunders the Slovak au-thorities made in the Dublin af-fair: 1) explosives are being usedto test sniffer dogs, although nolaw allows it; 2) the dog actuallyfound the explosive, but the po-lice handler forgot to retrieve it;3) no one stopped the plane, al-though the officers knew explos-ives were on board; 4) the policedecided to warn the Irish by fax;5) the fax was not sent to the po-

lice or to airport authorities, butto the baggage-handling com-pany; 6) in the fax, the companywas asked to find the explosive –and send it back on anotherflight; 7) it took three days for thepoliceman’s superior to find outthat the explosive was missing;8) only then were the Irish policefinally notified that the explosivewas on their territory; 9) Slovakpolicemen asked their colleaguesnot to make the affair public; 10)despite points 1) through 9) In-terior Minister Robert Kaliňákclaimed that this was only an in-stance of individual failure, and

two days after the incident wasstill saying he did not plan to fireanyone; 11) Kaliňák then refusedto hold a press conference or an-swer questions until January 7, atwhich point the Border Policechief resigned. If this were ascript for a crazy Hollywoodcomedy about clumsy policemenfrom eastern Europe it’d mostlikely be turned down for beingtoo absurd. Can the planet sur-vive all this insanity?

The toll system for trucks isless sexy, but perhaps even moreexplosive. The project is beinghandled by a firm which offeredthe most expensive proposal byfar. Luckily for them, the Trans-port Ministry excluded all thelower-cost bids from the tender,a fact the European Commissionis still looking into. And miles-long queues at borders show thatall the extra money still may nothave been enough. The queueswill disappear eventually. Whatwill last is a feeling that the statecompletely mismanaged theproject – and that it was some-what strange that TransportMinister Vážny left for a vacationjust as the toll system was beinglaunched.

The beginning of 2010 wastough. But given the amount oftalent in the Slovak government,these will certainly not be thelast trapasy of the year.

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Maybe safer not to check your bag: Poprad-Tatry Airport. Photo: TASR

"The only one that did not make a mistake was the dog."

Tibor Mako, head of the Border and Foreigners' Police, at a press conference on January 6.He later resigned over explosive mistakenly placed on a plane by police, despite its detection by a sniffer dog.

6 January 11 – 17, 2010

Many bills adopted in2009 targeted the crisis

AS IN other countries, the globaleconomic downturn was themain factor affecting Slovakialast year. In order to mitigate itsimpacts and boost the country’seconomy, the Slovak govern-ment adopted a series of anti-crisis packages, including newlegislation. Other laws were ad-opted which are expected to havesignificant effects, positive aswell as negative, on the whole ofsociety. For instance, the lawwhich launched the SpecialisedCourt is regarded by observers aspositive, while the law on stra-tegic companies is perceived asthe most problematic.

“The impact of some bills ad-opted last year will be more long-term, even though no constitu-tional bills were adopted sincethe ruling coalition does nothave a constitutional majority inthe Slovak Parliament,” GrigorijMesežnikov, a political analystand president of the Institute ofPublic Affairs (IVO), told TheSlovak Spectator.

Among the new legislationwhich he said would have a pos-itive influence on society,Mesežnikov listed the law estab-lishing the Specialised Court.

“Parliament responded veryquickly to the verdict of theConstitutional Court that ruledthe Special Courtunconstitutional,” Mesežnikovsaid. “I believe that it should beregarded as positive that thelaunch of the Specialised Courtwas approved very quickly.”

The Constitutional Courtruled on May 20 that the SpecialCourt – which had been set up totackle high-level state corrup-tion and organised crime – wasunconstitutional, but said thatits previous verdicts would re-main valid.

Prime Minister Robert Ficosubsequently came up with aninitiative to create a SpecialisedCriminal Court to replace theSpecial Court, a proposal whichwas approved by parliament onJune 18. The new court’s com-petences go beyond those of theSpecial Court: it will also hearcases of premeditated murder,subversion involving public pro-curement and public auctions;falsifying, changing and unau-thorised production of moneyand shares; and abuse of author-ity by public officials.

Specialists from the Slovakarm of KPMG, a global audit, tax

and advisory services company,also perceive this new legisla-tion, which also enables betterprotection of judges and special-isation on certain types of crim-inal activities, as an importantpart of the fight against crime,Viliam Kačeriak, Forensic Ser-vices Manager, KPMG in Slov-akia, told The Slovak Spectator.

Mesežnikov listed amongother new legislation that he be-lieves will have a positive impacta revision to the law on the assetsof municipalities. Even thoughthis was rather a small revision,he believes that the law, adjust-ing the way that the assets ofmunicipalities are sold and ren-ted, will contribute to transpar-ency and competition whenselling municipal assets.

“This is important because,alas, methods of corruption andcronyism are decentralising,” hesaid. “The aim of this revision isto prevent decentralisation ofthese methods.”

Parliament adopted the revi-sion to the law on the assets ofmunicipalities on June 16, effect-ive as of July 1, 2009.

Mesežnikov also listed a legalchange to the immunity of par-liamentary deputies. Now, if MPsare involved in a traffic accident,they cannot avoid a breath orblood test without penalty.

“Even though this issue is re-lated to a very small number ofSlovak citizens, this is a demon-stratively positive feature giv-ing citizens the feeling that atleast on this issue there are notdifferent rules for differentgroups of people and that thereis only one standard.”

On February 17, 2009, parlia-ment adopted a revision to the lawon offences, valid as of April 1,2009. According to it, MPs who areinvolved in car accidents are no

longer able to refuse to undergotests for alcohol or other intoxic-ating substances. If an MP refusesto be tested for alcohol following acar accident, it will be possible forhim or her to be prosecuted as anyother citizen would be.

The revision was ‘inspired’ bythe case of Miklós Duray, an op-position MP for the HungarianCoalition Party (SMK), who re-fused an alcohol test after he wasinvolved in a car accident in Oc-tober 2008.

The IVO president believesthat the immunity of parlia-mentary deputies should befurther narrowed, but does notexpect this to happen in thenear future.

Mesežnikov views the anti-smoking law extending theprotection of non-smokers as agenerally positive move.

“The anti-smoking bill is inline with the trend in Europe,” hesaid, but pointed out that as to-bacco is a legal drug, smokersshould not be discriminatedagainst.

“Certainly the opinions ofsmokers and non-smokers onthis bill differ,” said Mesežnikov.“But the trend itself is positivebecause limiting bad habits is tobe welcomed. But this is a specif-ic bad habit and thus societyshould not discriminate againstpeople suffering from it, whilelimiting them is OK.”

The law on the protection ofnon-smokers, passed by parlia-ment in February 2009, came in-to effect on September 1 and,despite facing criticism for beinginaccurate and ineffective, it hascleared the air in most Slovakrestaurants, cafés, bars and pubs.According to the amended law, ifa restaurant, pub or similar facil-ity wants to allow smoking with-in its premises, it has to have a

separate room for smokers, di-vided from the rest of the estab-lishment by a solid wall. To avoidcomplications and reconstruc-tion, many restaurant or pubowners have opted to go entirelynon-smoking.

Mesežnikov regards much ofthe legislation passed during thelast year as negative and contro-versial.

“Here I would list the revi-sion to the language law,” hesaid. “This is one quite unfortu-nate bill which, I dare to say, hasweakened the country’s interna-tional standing.”

The political analyst stressedthat the revision, drafted by theCulture Ministry, was not a re-sponse to a problem or a prob-lematic state. He regards the ar-guments used for its justificationto be misleading.

“The bill complicated rela-tions between Slovaks and Hun-garians here in Slovakia andbetween the republics of Slovakiaand Hungary,” he said. “This wasa completely needless bill.”

Parliament passed theamendment to the State Lan-guage Act on June 30. The bill in-troduced fines of up to €5,000 forthe use of incorrect Slovak fromSeptember 2009, and enabledstricter official supervision of theuse of ‘correct’ Slovak. Thegovernment's guidelines for im-plementation of the amendedState Language Act became ef-fective as of January 1, 2010. Un-til this time the Culture Ministrydid not issue fines stemmingfrom violations of the law.

Mesežnikov also listedamongst problematic laws thelaw against extremism, espe-cially the so-called anti-extrem-ist amendment to the Penal Code.

See LAW pg 10

The Specialised Criminal Court sits in the same Pezinok premises as the Special Court used to. Photo: SITA

Changes affect thecourts, strategiccompanies, taxes

and pensions

Coming into force:New and amended laws for 2010

As of January 1

Amendment to the Act on Collective BargainingThis law enables the automatic extension of higher collectiveagreements across a whole sector. As a result, agreed wages andworking conditions can be more widely enforced, even to covercompanies that did not participate in negotiations towards ahigher-level collective agreement. The Labour Ministry arguedwhen it proposed the latest revision that employers which arenot subject to any collective agreement can, by paying theiremployees lower wages, compete unfairly with companiessubject to such agreements in the same industrial sector.

Amendment to the Penal CodeThis revision makes financing of terrorism a punishable criminaloffence in Slovakia. The new legal norm stipulates that fundingof terrorism can be punished by 20 to 25 years imprisonment, oreven a life sentence in some cases.

Amendment to the Act on Supplementary Pension SavingThis amendment gradually decreases the fees charged bysupplementary pension fund management companies in theso-called voluntary third pillar, as of 2010. Over the next 10 years,the maximum administration fee in the voluntary pillar willdrop to 0.165 percent of the net value of assets in the contributionfund per month, and to 0.083 percent of the net value of assets inthe pension payout fund. The revision also introduces a fee forasset appreciation, similar to the regime that applies to thesecond pension pillar.

Act on financial intermediation and financial advisoryThis law unifies supervision across the financial sector andincreases the protection of clients. It distinguishes financialadvisers – also known as consultants – and financial mediators –also known as agents – in the insurance, capital market,supplementary old age pension saving, deposit-taking, andloan-provision sectors. A financial agent (mediator) is defined assomeone who performs mediation on the basis of a writtencontract with a financial institution. He or she cannot alsoperform financial consultancy. A financial consultant, bycontrast, provides consultancy on the basis of a written contractwith a client. A consultant cannot act as a mediator. Financialagents as well as consultants are responsible for damage theycause to their clients and their operations must therefore becovered by compulsory insurance. A mediator must also informtheir clients how much commission they will receive.

Amendment to the Civil Rules of the CourtThe amendment makes free legal aid available to a wider group ofpeople with low incomes. It is now up to the Centre for Legal Aidto assess the financial conditions of applicants. In the past, if apensioner or a mother with two children did not meet thefinancial criterion of being in material need they did not qualifyfor free legal aid. The Justice Ministry regarded this as a defect inthe system. The practice of the Legal Aid Centre showed that insome cases people were not able to get free legal aid solelybecause their income exceeded the limit by a few euros or evencents.

Amendment to the law on universitiesThe aim of this amendment is to eradicate plagiarism atuniversities. It introduces a central register of final works, whichshould prevent plagiarism in the final theses of students orteachers when these are part of state exams at universities.

As of February 1

Amendment to the law on complaintsThis amendment introduces changes in the filing, acceptanceand handling of complaints addressed to state administrative orlocal self-government bodies. The law introduces theopportunity to file a complaint by fax or electronically. Accordingto the new rules, complaints will be handled only if they are filedwithin three years of the incident subject to complaint.Anonymous complaints will not be handled, and the complaintmust be legible and clear.

As of March 1

Amendment to the Civil CodeThis amendment, drafted by the Justice Ministry, aims to boostconsumer protection. The application of an unacceptablecondition that is struck down by court proceedings will bebanned in all other cases in which the contested provision isapplied.

Source: SITA, TASR, Profit biweekly

Compiled by Spectator staff

BY JANA LIPTÁKOVÁSpectator staff

BUSINESS FOCUS

MAJOR CHANGES IN LEGISLATION SLOVAKS AND SLOVAK BRAND NAMES

Lawyers scrutinisenew legislation

Strategic company lawcomes under fire

Changes to the Labour Code

COMPANIES will be able to signtime-limited employment con-tracts with workers only fortwo years or less. After twoyears, employees must receivea permanent work contract.This stems from a revision tothe Labour Code which Presid-ent Ivan Gašparovič signed onDecember 16 that will becomeeffective on March 1, 2010.

The current law cappedtime-limited working con-tracts to three years, thePravda daily wrote.

Employers perceive thechange as problematic and

claim that it will worsen condi-tions for survival of companiesduring the economic crisis.

Also based on this same re-vision, employees who areworking in a company via apersonnel agency must receivethe same wage as comparableemployees working directly forthat employer. Agency em-ployees in some cases re-portedly received hourly wagesas much as 10 percent lowerthan regular employees of thesame company.

Compiled by Spectator staff

Lawyers scrutinisenew legislation

THE SLOVAK Parliament had arelatively quiet year in 2009 interms of legislative activity; anda significant portion of new legis-lation adopted during the pastyear was in response to the ef-fects of the financial and eco-nomic crisis on Slovakia. This in-cluded the new law on strategiccompanies, which generated alot of controversy. Another lawperceived as problematic was theamendment to the act on collect-ive bargaining.

The Slovak Spectator spoketo Ľubomír Leško, attorney atlaw of Peterka & Partners aboutthe most significant laws adop-ted in Slovakia during 2009 – andwhich of these they regard asproblematic – as well as about le-gislation which he believesneeds revision. Juraj Čorba fromlaw firm Ružička Csekesprovided opinions of the lawfirm to The Slovak Spectator.

The Slovak Spectator (TSS):Which were the most signific-ant laws adopted in the SlovakRepublic in 2009? Which ofthese laws are having or willhave the biggest impact onSlovakia’s society in futureyears?

Ľubomír Leško (ĽL): TheSlovak Parliament adopted sev-eral significant laws in 2009. Thegovernment’s steps were af-fected by the ongoing economiccrisis and the endeavour to re-duce its negative impacts on theeconomy. This endeavour waspartially reflected in minoramendments to the tax lawwhich implemented certain de-grees of relief for entrepreneurs(such as accelerating depreci-ation, shorter periods for returnof value-added tax (VAT), andsimplified bookkeeping for smallentrepreneurs). In addition, par-liament adopted several special-ised laws in an ‘anti-crisis pack-age’, such as the act on measuresto mitigate the impacts of theglobal financial crisis on thebanking sector, or the measuresaiming to increase the sale of mo-tor vehicles (such as the car-scrapping bonus for new motorvehicle buyers, VAT deductionfor all motor vehicles, etc.).

The trend of adopting‘single-purpose’ laws continuedin 2009. Several laws fall withinthis category, but the most dis-cussed enactments included theact on the submission of priceproposals by commercial com-panies, whose aim was to pre-clude the major Slovak naturalgas supplier from applying to theregulator for consent to imposenew gas prices on consumers(even though this act was adop-ted at the end of 2008 its effects

also prevailed in 2009 and,moreover, by adopting it thestate as one shareholder in aprivate company has basicallyused its legislative powers in adispute with other sharehold-ers), and the widely discussedstrategic company law, whichwas adopted as an answer to anissue regarding a single com-pany and which makes it pos-sible for the government to na-tionalise this company undercertain circumstances.

Within the area of labour le-gislation parliament amendedthe act on collective bargaining,introducing the opportunity for aparticipant (typically a union) ina higher-level collective agree-ment to request from the Min-istry of Labour, Social Affairs andFamily that the collectiveagreement also be made to applyto an employer who is not amember of the employers’ asso-ciation which entered into thehigher-level collective agree-ment. By this extension the ef-fects of higher-level collectiveagreements may be extended toemployers who did not negotiateor do not agree to them, whichmay bring them adverse eco-nomic effects.

Among other important en-actments is the amendment tothe Notaries Act, which alsoamends the act on the land re-gister and increases the in-volvement of notaries and attor-neys at law in the process oftransferring title to real estate. Inspite of the initial proposals theamendment did not introduce amonopoly of notaries and attor-neys to draft and authoriseagreements on the transfer oftitle to real estate.

Ružička Csekes law firm(RC): In general, the legislativeactivity of the Slovak Parliamentwas fairly modest in 2009.

Of particular importancewas the adoption of a temporarybank support scheme aimed atmaintaining stability in theSlovak banking sector by provid-ing capital injections and guar-antees to eligible financial insti-tutions (Act No. 276/2009). Thisaid scheme was subsequently

approved by the EuropeanCommission in December 2009.It remains to be seen to what ex-tent this temporary scheme willactually be used by the financialinstitutions.

The amendment of the CivilCode passed in December 2009is also worth mentioning (notyet published in the Collectionof Laws). By introducing untyp-ical and novel effects of judicialdecisions on (existing) con-tracts and General Terms andConditions used in commercialpractice, it aims to strengthenthe protection of consumersagainst unfair terms in con-sumer contracts.

TSS: Which of these laws doyou perceive as controversialand might end up – or alreadyhave – in the ConstitutionalCourt?

ĽL: The strategic companylaw has brought a lot of contro-versy, including serious reserva-tions from foreign investors.Numerous statements were is-sued both when it was beingdrafted and after its enactmentarguing that it unfairly inter-feres with ownership rights andthat there is a high probabilitythat certain provisions may beunconstitutional.

Another controversial en-actment is the previously men-tioned amendment to the act oncollective bargaining. Employ-ers, in particular, argue that theforced extension of collectiveagreements is an adverse stepagainst them and will affect em-ployment in Slovakia. It cannotbe ruled out that the amendmentwill be challenged before theConstitutional Court. Employersargue, for example, that theCzech Constitutional Court in asimilar case ruled that the forcedextension of collective agree-ments was unconstitutional.

RC: The Act on Certain Meas-ures Regarding Strategic Com-panies (no. 493/2009), known asthe strategic company law isprobably the most controversialpiece of legislation adopted in2009. This is so not only becauseof its very speedy adoption, but

also because of its content. Theprovisions in this act remainconfusing and possibly opencomplex questions related tostate aid control.

Transformation of the publichealth insurance sector has con-tinued in 2009. The mandatory(non-compensated) transfer ofpolicy holders from liquidatedpublic health insurance compan-ies to state-controlled publichealth insurance companies wasintroduced (Act No. 192/2009).Also, by means of legislativeamendment, a merger of twostate-controlled public health in-surance companies, VšeobecnáZdravotná Poisťovňa andSpoločná Zdravotná Poisťovňa, istaking place (Act No. 533/2009).The Slovak Anti-Monopoly Officehas refused to exercise mergercontrol in this respect. It re-mains to be seen how the publichealth insurance sector overhaulwill be treated by the Constitu-tional Court and by the EuropeanCommission.

TSS: What parts of EU legisla-tion has Slovakia not yet im-plemented into its legislation?

ĽL: We are not aware of a ma-jor implementation delay in rela-tion to Slovakia.

RC: In general, Slovakia’stransposition record is compar-able with other member states.Problems may lie in applicationof EU law by courts and admin-istrative bodies in individualcases. It seems that public au-thorities are still somewhat‘shy’ and ‘defensive’ as regardsarguments based on EU law. Inthis respect, our judicial andadministrative practice seemsto be lagging behind otherVisegrad countries.

The entry into force of theLisbon Treaty (December 1,2009) significantly increasesthe ‘EU dimension’ of criminallaw issues. It provides furtherincentives for Slovak legislatorsto tackle the issue of the crim-inal liability of legal entities(mandated by certain EU legis-lative acts).

See SURVEY pg 10

7January 11 – 17, 2010BUSINESS FOCUS

No changes in the Press Code expected

CULTURE Minister MarekMaďarič does not expect thatSlovakia’s Press Code will bemade stricter or changed con-siderably within the next sixmonths, as was suggested byPrime Minister Robert Fico inSeptember 2009, the TASRnewswire wrote on January 4.

Last year Fico suggestedshortening the time period forpublishing a reply from threedays to two days or just one. Atthe same time, Fico said thathe would welcome it if the me-dia were not only liable forpenalties only after a court rul-

ing but also specifically underthe act itself.

Parliament passed the re-vised Press Code on April 9,2008 despite a torrent of criti-cism from media experts, pub-lishers and international or-ganisations and it became ef-fective on June 1, 2008.

The Press Code currentlystates that the right to reply bya private individual or a legalentity can be exercised if newsreports contain statementsthat have injured a person’sgood reputation, dignity or pri-vacy.

FOCUS shorts

Revision to nature protection law

THE SLOVAK cabinet approveda draft revision to the law onprotection of nature onDecember 16 through whichthe Environment Ministryseeks to avoid a complaint be-ing filed against Slovakia at theCourt of Justice of theEuropean Communities, theSITA newswire wrote.

According to the ministry,Slovakia might face such acomplaint if does not adopt alegal norm reflecting objec-tions raised by the EuropeanCommission regarding incor-rect or incomplete transposi-tion of European regulations

about biotopes and birds intoSlovakia’s legislation.

According to the new legis-lation, a locality in Slovakiawith priority biotopes or prior-ity species of European import-ance should be put on the na-tional list of areas of Europeanimportance, Natura 2000, evenif such a listing is somewhatquestionable. Such a localitywould remain on the list untilany questions regarding thelisting are resolved, securingpreliminary protection of thearea.

The revision is planned tobe effective as of May 2010.

Efforts to stop mega-casino

HE CONSERVATIVE Democratsof Slovakia (KDS) will try topush forward a law inparliament’s February sessionto hinder construction of a‘mega-casino’ in a plannedmulti-purpose complex calledMetropolis on the outskirts ofBratislava, the SITA newswirewrote on December 18.

The draft bill on gamblingwas submitted to parliamentfor a second time by independ-ent deputy Pavol Minárik. Hesaid if the bill is not approvedthis time it will be a clear mes-sage from Slovak deputiesabout how they feel about themoral state of Slovak society.Minárik has proposed to dropall provisions that he says were'smuggled' into the law by Fin-ance Minister Ján Počiatek.

The Finance Ministry in-corporated a new category ofcasinos into the revision of thegambling act, namely a casino

in a recreational complex. Par-liament passed the bill in Octo-ber.

The KDS deputy wants tolimit the number of slot ma-chines in an arcade or casino to70, as is the case in Poland. Heis also calling for a ban on alco-hol consumption in arcadesthat are not part of casinos.

The draft bill on gamblingunder which slot machineswould only be allowed in ar-cades and casinos was not ap-proved last year in its secondreading in parliament at thebeginning of December.

The Metropolis complex isto be constructed by TriGranit,one of the largest developers inEurope, and envisions an enter-tainment and relaxation com-plex which will offer its visitorsnot only recreation and culturebut also gambling. It is plannedfor a 30-hectare site in Jarovce,south of Bratislava.

Trend of adopting‘single-purpose’laws continued

in 2009

BY JANA LIPTÁKOVÁSpectator staff

Collective bargaining has become a problematic issue in Slovakia. Photo: SITA

8 January 11 – 17, 2010 BUSINESS FOCUS

Strategic company law comes under fire

THE LAW on strategic companies is un-doubtedly perceived as the most prob-lematic law adopted last year. The legis-lation, originally tailored to deal withthe financially troubled chemical firmNovácke Chemické Závody (NChZ),which subsequently declared bank-ruptcy in September, has displeasedtraditional political opponents of PrimeMinister Fico’s government, busi-nesses, foreign chambers of commerceas well as some previously staunch al-lies of the government, such as tradeunions.

“I would list the law on strategiccompanies drafted by the EconomyMinistry as among the most harmfulbills of 2009,” Dušan Zachar of the eco-nomic think tank the Institute for Eco-nomic and Social Reforms (INEKO) toldThe Slovak Spectator. “Through this billthe government wants, via its pre-emptive right over a company's assets,to allegedly save jobs and production incompanies economically important forthe state which have found themselveswith existential problems. But the realeffect will be exactly the opposite.”

The law, whose full name is the Acton Certain Measures Regarding Stra-tegic Companies, which parliamentpassed on November 5, authorises thestate to buy bankrupt firms which thecabinet designates to be ‘strategic’ tothe economy. Any firm employingmore than 500 employees which isdeemed important for the security ofthe state, protection of public health orthat operates within so-called network

industries can be defined as strategic. Ifsuch an enterprise files for bankruptcythe state will have a pre-emptive rightto take control of the company and laterdecide whether to select new owners.

The cabinet said that the law is in-tended to help preserve existing jobs atcompanies severely affected by theeconomic downturn and said the lawwould be valid only until December 31,2010. The European Commission hasrequested additional information aboutthe law from the Slovak governmentand will be reviewing whether it com-plies with EU regulations.

According to Zachar, the law doesnot respect the basic principles and pil-lars of a free society and a market eco-nomy, which are, for example to guar-antee and enforce property rights, free-dom of conducting business, stability oflegal norms, legal reliability, etc.

“The law does not enable revitalisa-tion of a company in an effective and ina way normal in a market economywithin the process of bankruptcy pro-ceedings and thus secure in a sustain-able way production and jobs,” saidZachar. “If the government acted as asteamroller when implementing this

law, we can expect dubious, poorly jus-tified and incomprehensible ‘adverse’takeovers of companies, which, I hope,will not end as in February 1948.”

Zachar was referring to the periodwhen commercial and industrial com-panies in the former Czechoslovakiawere nationalised after the communisttakeover of the country.

According to Michal Marhefka andPeter Duman, lawyers from the Bratis-lava branch office of Weinhold Legal,apart from accusations of violation ofthe constitutionally guaranteed prin-ciple of equality of state and privateownership, the controversies surround-ing the act also include possible viola-tion of the European Union’s principleof free movement of capital and its ruleson state aid, the adoption of the act viaaccelerated legislative procedure andaccusations of nationalisation of theprivate business sector.

One of the problematic facets of thelaw is the conditions under which thegovernment may declare a company as‘strategic’.

The Weinhold Legal lawyers per-ceive these as stipulated very loosely:more than 500 employees, a ‘significant’supplier of energy, gas, heat, or oilproducts, or an operator of hydropowerplants, public wastewater treatmentplants, sewer systems or water supplies.Furthermore, the bill stipulates that aproposal to declare a company as stra-tegic shall be submitted by a ‘respectiveminister’ without further specification.

The government’s right to sell thecompany, after potentially resolvingthe economic difficulties, to a newowner via a public tender raises con-cerns regarding possible corruption.

The Weinhold Legal lawyers thinkthat even if no company is ‘saved’ based

on this act, its adoption may be seen in abroader sense as a demonstration of acertain policy line of the current gov-ernment – animosity towards theprivate sector, strengthening the role ofthe state, hasty adoption of laws thatare necessary in order to attain theshort-term objectives of the govern-ment, with this all happening under theguise of social benefit for the public.

An analysis by Andrej Glézl, Re-structuring Manager at KPMG in Slov-akia, points out that the bill also im-poses on a bankruptcy trustee an obliga-tion to avoid mass layoffs and continuethe business operations of the strategicenterprise.

“This shifts the main purpose of thebankruptcy proceedings of a strategicenterprise from liquidation (the maingoal of a bankruptcy process) into pre-servation of the enterprise as a goingconcern – a goal that the insolvency lawreserves predominantly for the rulesgoverning the restructuring process,”said KPMG. “This, again, may createroom for speculation and uncertainty inapplying the key principles behind theinsolvency law.”

In spite of these drawbacks, there isa potential positive that could comefrom the law on strategic companies,according to Glézl of KPMG.

“This law could inspire a policy de-bate about efficient and accurate meth-ods for determining the ongoing valueof a business and the liquidation valueof an insolvent enterprise, regardless ofwhether it is in bankruptcy orrestructuring,” Glézl said. “If con-sidered carefully, this debate mightlead to certain important changes inour insolvency law.”

See BILL pg 10

Novácke Chemické Závody has been designated a strategic company. Photo: ČTK

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9January 11 – 17, 2010ADVERTISEMENT

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SURVEY: Some lawsneed revision

Continued from pg 7

TSS: Which important laws orlegal norms does Slovakialack, and which laws need tobe revised in the future?

ĽL: There are several regu-lations which may require re-vision in the future. This ap-plies not only to legislationmentioned in the answersabove but also to previousyears. Among these laws wecan point to the 2007 amend-ment to the Act on Health In-surance Companies, underwhich private health insur-ance companies are prohibitedfrom recording a profit – andwith which there is a high riskfrom arbitration proceedingsby investors, or the act on ex-traordinary measures to betaken during the constructionof highways, adopted in 2008,which allows construction onprivate land plots before ex-propriation proceedings are

duly completed and, con-sequently, irrespective of theirresult.

RC: Complex legal regula-tion of Public-Private Partner-ships, as envisaged by a gov-ernment resolution, shouldbring clarity and certainty intothis novel area of legal regula-tion.

It is also important that rel-evant measures implementingthe Act on Financial Interme-diation and Financial Advisory(Act no. 186/2009) are dulypassed in order to complete thenew regulatory framework.

One may regret that theproposal for standardised pub-lication of judicial decisions onthe internet was dismissed bythe Slovak Parliament inDecember 2009. Adequate pub-licity and accessibility of judi-cial decisions would certainlybe beneficial not only for thelegal profession but also for thegeneral public.

10 January 11 – 17, 2010 BUSINESS FOCUS

LAW: Slovakia has to wait for effectsContinued from pg 6

“Here are some ‘rubber’ [i.e.flexible] articles, which, undercertain circumstances may beabused by the dominant politicalpowers against their politicalopponents,” said Mesežnikov,adding that for now Slovakia isnot in such a situation, but sucha possibility is already here.

Parliament adopted the revi-sion on February 28, 2009, and itbecame effective as of September1, 2009. The amendment definesextremism, an extremist group,and extremist material, as well asthe particular motive of a crimin-al deed, and changes the subjectmatter of violent criminal deedsagainst a group of people and hoo-liganism.

According to Mesežnikov,other problematic bills include arevision cancelling militarycourts, which he said also attrac-ted criticism amonglawyers.

Fighting the economic crisis

Tomáš Kuča from the Slovakbranch of Pricewaterhouse-Coopers, a global audit, tax andadvisory services company, re-gards 2009 as having been a fruit-ful year when it came to lawchanges and amendments inSlovakia.

“A number of significantnewly adopted laws were drivenby the government's best effortsto respond to the economiccrisis,” Kuča told The SlovakSpectator. ” I perceive some of theamendments and laws approvedin the first half of 2009 as positivechanges aimed at helping bothindividuals and companies.These were, for example, theApril changes to the Act on Em-ployment Services, or the re-search and development incent-ives adopted in August.”

Analysts in general regardthe law on strategic enterprisesapproved in November as beingcontroversial.

“The law on strategic com-panies has started numerous dis-cussions across the entire polit-ical spectrum as well as in thebusiness community and I be-lieve it will now be very import-ant to observe how often and inwhat circumstances it will beapplied,” said Kuča. According toMesežnikov, the bill goes againstthe principles of a free marketeconomy.

Dušan Zachar of the econom-ic think tank the Institute forEconomic and Social Reforms(INEKO) believes that the impactof the law will be the opposite tothat envisaged by the govern-ment, which says it wants to useit to save jobs and maintain pro-duction in companies which areeconomically important to thecountry and which have foundthemselvesin major difficulties.

“Overall, we have seen anumber of positive changes inSlovak legislation in 2009 and Iam positive also about the factthat the Act on Bankruptcy andRestructuring [Act No. 7/2005Coll.] was already in place beforethe economic crisis, although it isstill not used as often as it shouldbe due to the historical lack oftrust in the restructuringprocess,” he said.

Parliament also responded tothe global financial and econom-ic crisis through a number of le-gislative changes which were re-lated to taxes.

“The tax and business com-munity appreciated the increasein the input price of tangible andintangible assets, the increase inthe non-taxable part of the taxbase for the individual taxpayersand the simplification of tax re-cords for the self-employed per-sons after meeting statutoryrequirements,” Jeff Black, thepartner of the tax department atDeloitte Slovakia, told The SlovakSpectator.

The amendment of the In-come Tax Act increases the limitfor the input price for tangible as-sets to €1,700, and the limit onthe input price for intangible as-sets to €2,400. It also increasedthe non-taxable part of the taxbase of individual taxpayers for2009 and 2010. For taxpayers with2009 annual income of up to€15,387.12, the non-taxable partof the 2009 tax base is €4,025.70.To compare, in 2008 the non-tax-able part of the tax base was€3,269.47.

In the tax sphere, Kuča ofPricewaterhouseCoopers high-lighted the revision to the law onvalue added tax (VAT) that relatesto creating a VAT group for organ-isationally, financially and per-sonally linked companies meet-ing specified criteria.

KPMG specialists recordedseveral measures taken withinbanking and risk managementduring 2009. These include, forexample, the law on measures tomitigate the impact of the globalfinancial crisis on the bankingsector. However, as KPMGstressed, the Slovak banking sec-tor has been stable over the longterm and Slovakia is one of nineEU countries in which the gov-ernment has not needed to parti-cipate in propping up the bank-ing sector. According to KPMG,the Slovak Banking Association(SBA) regards this law to be pre-cautionary and it has not beenused so far.

In February 2009 the SBAsigned, along with the Slovakgovernment, a memorandum oncooperation to address the im-pacts of the financial and eco-nomic crisis. An application ofthis measure in real life is theprogramme of assistance to bankclients who find themselves un-able to repay their housing loans.Eleven banks have joined thisprogramme and KPMG special-ists believe that some bank cli-ents will use this measure as re-turnable assistance.

Effects of anti-crisismeasures questioned

INEKO’s Zachar said he viewsthe anti-crisis laws and govern-ment measures adopted, fromthe viewpoint of their impacts onthe country’s economy as well associety in general, to be moreharmful than beneficial. He wel-comed the changes by which thegovernment, but only during theperiod of the economic crisis, hasmitigated the impacts of thecrisis on the business sphere aswell as on citizens.

“These include, for example,the innovative ‘flexi-account’ in-corporated into the Labour Codefrom praxis,” Zachar told TheSlovak Spectator, adding that thishelps employers as well as em-ployees to live through bad times.Within this scheme, workersstay at home and receive wagesduring periods when a companydoes not have orders and does not

produce. After production re-sumes, workers work off thesehours from this ‘account’ in theform of overtime hours.

Other anti-crisis measurespraised by Zachar include a re-laxation in tax-administrationduties by businesses, especiallysmall ones, and a moderate re-duction in the tax and compuls-ory contribution burden for somegroups of citizens.

In the tax area, Zachar alsopraised a cut in the period for re-turn of excess VAT payments orfaster depreciation of assets.

But Zachar said he believesmost of the anti-crisis measureshave brought hardly any positiveeffects.

“Even the Slovak Academy ofSciences has stated that thegovernment’s set of measurescannot be perceived as ‘optimal,convincing, striking andtargeted’,” said Zachar. “I believethat these were often acts ofmarketing: for example, the car-scrapping bonus, which eitherhas not harmed the economy or,in the worse case, has contrib-uted to a significant deepening ofSlovakia’s debt over 2009. Par-liament even had to revise thestate budget law for 2009 to‘legalise’ a tripling in the publicfinance deficit compared to theoriginal plan.”

Zachar also pointed to whathe called legislative attacks bythe ruling coalition on theprivately managed part of theold-age pensions saving scheme,known as the second pillar.

He believes that by reducingthe charges clients pay to pen-sion fund management compan-ies for managing their pensionfunds, and by enacting a so-calledguarantee fund so that the ac-counts of pension savers do notfall below the principal sum theyhave invested, the second pillarhas become less attractive for thepension fund management com-panies as well as savers.

On March 11, parliament ad-opted a revision to the law on old-age pension saving.

Beginning on July 1, 2009, thefixed fee for administration ofsecond pillar pension funds wascut from 0.065 percent to 0.025percent of the net monthly valueof the participant’s assets in thefund.

Under the new legislation,the pension fund managementcompanies were obliged tolaunch a guarantee fund for eachof their pension investmentfunds. At six-month intervals thepension fund management com-panies must now compare the

yields in their pension fundswith a benchmark and in theevent of loses must cover themfrom the guarantee fund.

According to Zachar, the pen-sion fund management compan-ies have responded to this changeby a massive sell-off of stocks at atime when their prices had star-ted to increase and it would havebeen better to be buying them.

“In this way the pension fundmanagement companies havelost an opportunity to achievehigher profits and savers to havehigher pensions,” said Zachar.

According to Zachar, theSlovak government also adoptedbills last year that significantlyincreasing so-called moral haz-ard – i.e. by encouraging beha-viour harmful to society, and dis-incentivising people from play-ing by the rules and being honest.

“Among these, for example,are revisions enabling forgive-ness of penalties stemmingfrom due compulsory pay-ments to the social securityprovider Sociálna Poisťovňa(the general pardon) or the banof distraint proceedings againsthospitals which, however, doesnot apply to private hospitals,something that is probablyunconstitutional.”

What is missing

With regards to legislationthat Slovakia still lacks,Mesežnikov, the political ana-lyst, highlights a constitutionallaw on national minorities,which has still not been adopted.The issue is one which has beendragging on for many years.Mesežnikov sees this piece of le-gislation as important becausethe Slovak constitution countson a special law setting out therights of members of minoritiesin Slovakia.

“There are some laws onwhose bases minorities’ rightsare defined and performed,” saidMesežnikov, adding that a closeranalysis shows that the currentrelated legislation is not draftedin a way that avoids problemsarising. “The constitutional lawwould arrange the whole issue inorder that no doubts occur andprovisions are unambiguous inorder to satisfy minorities. Thisused to be a theme of previousparliamentary terms, when alas,even governments more inclinedto achieve a solution did not haveenough power to push throughsuch a law. The current cabinet,which is nationalistic, I think,completely rejects the idea ofsuch a law.”

Changes to the second pension pillar could make it less appealing tocurrent and future retirement savers. Photo: Sme - Pavol Funtál

BILL: Collectivebargaining changes

Continued from pg 8

Apart from the law on stra-tegic companies, WeinholdLegal lawyers Marhefka andDuman pointed to the revisionof the law on employment ser-vices as also being problematic.

With the aim to mitigatepossible consequences of theglobal economic crisis on em-ployment in Slovakia, the gov-ernment introduced severalchanges in labour legislation atthe beginning of 2009.

The amendment to the Acton Employment Services andthe Labour Code introduced theso-called ‘flexi account’ into theSlovak Labour Code.

Its aim was to enable em-ployers to more effectivelyhandle a surplus of employeesduring a crisis period. With theconsent of its trade unions andon the basis of material opera-tional reasons precluding theperformance of work, an em-ployer can award employeestime-off. These employees areentitled to at least the basic partof their wages. Once the mater-ial operational reasons haveceased to exist, these employ-ees then have an obligation towork the provided off-timewithout a claim for already-paid wages.

Apart from the controver-sial circumstances which sur-rounded the introduction of the‘flexi account’, there are certainambiguities in the wording ofthe bill that could question theproclaimed benefit to employ-ers. The regulation lacks anymechanism guaranteeing thatan employee will actually workthe provided off-time or com-pensate the employer in theevent that he or she terminatesthe employment relationshipprior to doing so. This could beeasily misused by employeesand add that the regulationdoes not address cases where notrade unions have been estab-lished in a company, according

to the Weinhold Legal lawyers.Ľubomír Leško, an attorney

with Peterka & Partners sees asproblematic a recent amend-ment to the Act on CollectiveBargaining. This amendmentenables an automatic extensionof higher-level collectiveagreement over all firms in asector. According to Leško, it in-troduces an opportunity for asignatory to a higher-level col-lective agreement (typically aunion) to request from the Min-istry of Labour, Social Affairsand Family that the collectiveagreement be applied also to anemployer who is not a memberof the employers’ associationwhich signed the higher-levelcollective agreement.

The Slovak Parliamentpassed the amendment onDecember 3 and Slovak Presid-ent Ivan Gašparovič signed itinto law on December 16. It be-came effective on January 1,2010.

The Trend economic weeklywrote after the amendment wasadopted that compulsory ex-tension of higher-level collect-ive agreements may push upwage increases and thus costsfor companies.

Several companies had beenobliged to comply with a col-lective agreement which theydid not negotiate before thisamendment was passed. Butthe Labour Ministry had to as-sess extensions of the agree-ment to a certain company in-dividually, Trend wrote.

When arguing for this latestamendment, the Labour Min-istry said that employers whichare not subject to any collectiveagreement can unfairly com-pete with companies covered bysuch agreements by payinglower wages. Parliamentaryopposition parties challengedthe principle of extension of col-lective agreements before theConstitutional Court in April2007, but no decision has yetbeen made, according to Trend.

11January 11 – 17, 2010ADVERTISEMENT

SP90170/1

In the modern world, information is one of the most important factors affecting the quality of people’s lives. Relationships between people in the mutual exchange of information, however, must be regulated and legally governed. Transmission of in-formation in the form of signals between the transmitter and the receiver of the sig-nal via wires, as well as facilitating such transmission, is designated as telecommu-nications (or electronic communications, according to new EU terminology).

Regulation of electronic communicati-ons focuses primarily on issues such as the establishment, operation and provision of electronic communications networks1 and services2. These shall secure exchange and transmission of information between users via electronic communications networks.

The current Slovak legal regulation of electronic communications is based on the EU regulation of electronic communications networks and services which was implemen-ted through a regulatory framework of di-rectives and regulations adopted mainly in 2002 (the so-called Regulatory Framework 2002). This package of rules governs all forms of fixed and wireless telecommunica-tions, data transmission and broadcasting. The aim of this package was to promptly respond to the quickly and dynamically-de-veloping telecoms market and to primarily improve consumer protection and create the best conditions for the development of internal market. The main expected re-sult of development of the internal market was to establish a healthy and competitive environment which would then naturally lead to an increase in the quality of services provided or, eventually, to a decrease in the prices of the provided services.

Consumers’ rights

The Regulatory Framework 2002 was also aimed at improving consumer prote-ction through - among others - the institu-tion of universal service.

The universal service consists of a mini-mum set of services (as specified within the Framework) of given quality available to all users regardless of their geographical location and, in the light of specific natio-nal conditions, at an affordable price (in-cluding inter alia the provision of access or connection to the public telephone ne-twork on the basis of a reasonable request, the provision of at least one comprehensi-ve directory available to end-users or the ability of all end-users of publicly available telephone services, including users of pu-blic pay telephones, to call the emergency services free of charge, by using the single European emergency call number, 112, and other national emergency numbers, etc.).

Such universal service shall be provided by the enterprise designated by the nati-onal regulatory authority throughout the whole territory of the country.

Since provision of the universal service requires expenditure for certain costs on the part of its provider, the EU regulation requires, where necessary, individual im-plementation of a procedure for compen-sationing these costs incurred in relation to the provision of the universal service by the designated enterprise(s).

Internal market

In Slovakia, as well as in a majority of the EU countries, the dominant players in the market (those with significant market power) are still the incumbents (former monopolies). One of the aims of the Regulatory Framework 2002 was to protect other players against any abuse by these providers’ dominant positions.

The Regulatory Framework 2002 signifi-cantly liberalised the internal market by the abrogation of the system of licensing the indivi-dual providers of telecommunications services by the Member States. Such licensing required fulfilment of a vast number of complicated conditions, which made the licensing process very lengthy and extremely administratively demanding and in some cases even effectively prevented new enterprises from entering the market.

The Framework introduced a general per-mission for electronic communications ne-twork systems and services. The right to provide electronic communications network systems or services is no longer subject to pri-or consent of the state regulatory authority. The Member State may only require notifica-tion of the intent to commence activities in the respective area, which is also the situation in Slovakia. A provider may generally commence its telecoms activities when it fulfils the gene-ral conditions.

How has Slovak law coped with the Regulatory

Framework 2002?

The majority of the Regulatory Framework 2002 was transposed into Slovak law by me-ans of the Act on Electronic Communications3

and its subsequent amendments. In general, this law and its amendments complied with the requirements of the framework package.

As the extent of the universal service is similarly set out in the Slovakia’s communi-cations act, the universal service is basically defined in the same way as in the applicable EU directive.

The universal service shall be provided by one or more enterprises designated by the Slovak Telecommunications Office in order to ensure access to public electronic communi-cations services for the whole territory of the Slovak Republic. The designated enterprise(s) shall be entitled to the compensation for the assessed net costs of providing the universal service if these exceed the earnings gained from the provision of the universal service.

The compensation of such costs shall be co-vered by contributions from other enterprises providing public networks, public services or public networks and services, with a minimum market share of 0.2%. Such contributions are deposited in a special account maintained by the Slovak Telecommunications Office, which publishes an annual report on the manage-ment of this account.

The net costs of the provision of the univer-sal service shall be calculated by the Slovak Telecommunications Office as the difference between the costs of this service on one side and the earnings and market advantages of the provider of the universal service on the other side. The market advantages comprise mainly the strengthening of the enterprise’s reputation or promotion of the enterprise by, for example, public telephones or directories.

In the Slovak Republic, a sole provider has been designated to provide the universal ser-vice for several years. The other providers of public networks and services have tended to object to this status quo. Their main argument is that they must contribute to the designated enterprise in order to facilitate the provision of the universal service which then effecti-vely strengthens the market position of the main competitor and weakens their position as competing enterprises. The argument here is based upon the fact that the concept of the universal service is an area which shall always be managed by the state as it has been imple-mented to fulfil a so-called public interest. The framework itself allows for different solutions in this area and Slovakia adopted one of the possible approaches.

Under Slovak law, the transposition of the regulation related to the internal market re-sulted into an environment where, from the legal viewpoint, any enterprise may provide networks and services on the basis of the ge-neral permission, provided it meets the con-ditions imposed therein. Within the general permission, the Slovak Telecommunications Office may impose only such conditions which are provided for by respective laws. In line with the EU regulation, such conditions shall be non-discriminatory, adequate and transpa-rent, whereby obstacles to entering the tele-communications market are eliminated and transparency is increased.

EU Regulatory Framework reform

Due to the rapid development of the tele-coms sector, new rules (“telecoms reform pa-ckage”) reforming the Regulatory Framework 2002 have entered into force only recently (in December 2009). The reform was proposed by the European Commission in 2007; the final wording was approved by the European Parli-ament and the Council of Ministers in Novem-ber 2009 following a quite complex procedure of negotiations. This reform package directly amends the original Regulatory Framework 2002 and reacts to the issues and weaknesses within the competition in the telecommunica-tions market and aims at strengthening con-sumers’ rights. Additionally, it contains more rigorous and consistent regulation, albeit with the originally declared priorities.

The telecoms reform package can be divided into three main areas governed by: (i) the Bet-ter Regulation Directive – covering and impro-ving specific telecoms regulatory matters; (ii) the Citizens’ Rights Directive – strengthening consumers’ rights and protection of privacy; and (iii) the Regulation establishing the new European Telecoms Authority called the „Body of European Regulators for Electronic Com-munications (BEREC)“.

The new changes affecting consumers are, inter alia, the following:

1. The extension of rights of consumers with regard to the protection of citizens‘ rights regarding the internet access by a new “in-ternet freedom provision” - discussed ex-tensively by the European Parliament and the Council - providing that any measures taken by the Member States in respect of the access to, or use of, services and applications through electronic commu-

nications networks by end-users shall respect the fundamental rights and free-doms of natural persons and shall be limi-ted or excluded only upon a prior fair and impartial trial;

2. Porting of phone numbers and their sub-sequent activation shall be carried out within the shortest possible time; in any case, users who have concluded an agree-ment to port a number to a new service provider shall have that number activated within one working day (in the EU, it cur-rently takes, on average, from approxima-tely 8 days up to few weeks);

3. Obligation of the providers of services to offer the possibility to subscribe to a contract with a maximum duration of 12 months (currently, the contract period is usually 24 months);

4. Improved information for consumers re-garding the subscribed communications services by setting the minimum requi-rements for the contract with operators (including for example, the minimum service quality offered, compensation, and refund arrangements which apply if the contracted service quality levels are not met, etc.);

5. Improved consumer protection against personal data breaches and spam by me-ans of imposing additional obligation on the providers, including for example, mandatory notifications of personal data breaches.

As the majority of the rules of the reform package are contained within the newly adopted directives, these will need to be transposed into the national laws of the Member States by June 2011. In the near fu-ture, we therefore can expect amendments to the applicable Slovak legislation respon-ding to the EU reform package.

Branislav Ujvári is a Senior Associate with ROWAN LEGAL s.r.o. This article is of an

informative nature only. For more information go to www.rowanlegal.com

Branislav Ujvári,Senior Associate, ROWAN LEGAL s.r.o.

Slovakia is coping with EU telecom regulation

1 generally transmission systems and, where applicable, switching or routing equipment and other resources which permit the conveyance of signals by wire, by radio, by optical or by other electromagnetic means.2 service normally provided for remuneration which consists wholly or mainly in the conveyance of signals on electronic communications networks.3 Act No. 610/2003 Coll.

12 January 11 – 17, 2010 BUSINESS

€: Still thinking in crownsContinued from pg 1

Their survey also found that90 percent of those polled be-lieved Slovakia had handled theprocess of adoption well.

“It is a compliment to theNational Bank of Slovakia and allwho participated in [theprocess],” IVO’s Oľga Gyárfášovátold the SITA newswire.

As for the most significantchallenges in the process, Barátlisted, first of all, meeting theMaastricht criteria, which re-quired keeping inflation and thepublic finance deficit low.

“It was also extremely diffi-cult technically to secure theminting and distribution ofcoins, and the bringing in anddistribution of banknotes, alongwith setting all the banking andother information systems,”Barát said.

According to Barát, the in-formation campaign itselfwasn’t an easy task either.While not as difficult as thetechnical aspects, he said it wasnecessary to challenge manymyths and beliefs stemmingfrom people’s fear of the un-known, for example of pricehikes, psychological shocks,etc., which were believed tothreaten Slovakia, but none ofwhich actually materialised.

“But we had these issues onthe table on a daily basis and hadto continuously and patientlyexplain them,” Barát said.

However, Barát said he be-lieved that some topics are beingkept alive artificially by the me-dia, for example reported prob-lems with handling small-de-nomination coins or with theend of dual display pricing ineuros and Slovak crowns.

“None of them presents areal problem in practice,” hesaid.

How consumers feel

Consumers, however, tendto perceive changes in prices re-lated to euro adoption negat-ively, with 57 percent of re-spondents believing that priceshad gone up. However, thisnumber is not so high that itovercomes the positive aspects,Gyárfášová said in early Decem-ber.

Another poll, by the MedianSK agency, suggests a similartrend. Of 5,074 respondentspolled between May and Decem-ber of 2009, 70 percent responded‘yes’ to the question “Do youthink the introduction of thenew common currency causedprice increases this year?”, ac-cording to SITA.

However, it may take a littlelonger for Slovaks to adjust fullyto the currency. For example, 56percent of respondents to aKMG International survey –conducted between December 5and 12, 2009, on a sample of1006 people – said that theywere still converting euroamounts into Slovak crowns.

“The tendency to calculate incrowns is significantly strongeramong people with elementaryeducation,” KMG told SITA.

The IVO-Focus survey’s find-ings suggested that 71 percent ofSlovaks would like to see dualdisplay pricing remain in place.

“According to another sur-vey, 99 percent of people would

like, for example, to be relievedof the obligation to pay taxes,”Barát responded with a chuckle.“The survey question itself issuggestive and the result doesnot deliver much. People wouldcertainly like to have price tagsin US dollars, Czech crowns,Hungarian forints, and Polishzloty so that it would be eveneasier to compare. Anyway, thispast Saturday in Austria I wasgiven a ski pass and the pricewas indicated in Austrianschillings – this is eight yearsafter Austria adopted the euro.While it is of course no longerobligatory, anyone can continuewith dual display for as long asthey wish.”

According to Barát, if peopleare able to do their shopping inthe Czech Republic, Poland,Hungary and elsewhere in theworld in the local currencies andare able to perform the some-times very complicated calcula-tions to work out equivalentprices then there is no reasonwhy they should not be able todo so at home.

“I am 100-percent sure thatno customer would leave a storeand go to a competitor only be-cause he does not find price tagswith dual display while thecompetitor has them,” he added.

Euro advantages

Exchange-rate stability,lower conversion costs and, afterthe unprecedented reduction ofECB interest rates, more favour-able monetary policy conditions,which have fed through intolower interest rates for new cor-porate loans, have made a no-ticeably positive contribution tomitigating the effects of theglobal recession on the Slovakeconomy, Volksbank’s Vaňo toldThe Slovak Spectator.

“In particular, thanks to theavoidance of exchange rate tur-bulence between September2008 and March 2009, Slovakiaavoided the effect of more ex-pensive imports on prices,”Vaňo said. “Inflation in Slovakiaat the turn of 2009 was hence

smooth and continuous, con-trary to other markets in the re-gion, which faced double-digitdepreciation of their currencies,which in turn boosted inflationthere because of more expens-ive imports.”

According to Vaňo, the luckytiming of the conversion – thefinal green light came in July2008, just weeks before theglobal economic turbulence be-gun – at the same time helped todispel previously optimistic as-sumptions about the advant-ages of running an independentmonetary policy in a small andopen economy.

As was the case especially inHungary and Romania, a severeincrease of global risk aversioncaused a significant weakeningof regional currencies, he added.

“Already by 2009 severalSlovak industries began to feelthe benefit of euro introduction,especially as multinational cor-porations with facilities in sev-eral of this region’s countriesexperienced the risks associatednot only with currency volatil-ity, and associated higher con-version costs, but also the high-er interest rates in localcurrencies,” Vaňo said.

If there are challenges tospeak of, Vaňo said, they con-cern more the increasing use ofcoins. However, instead of con-sumers, this issue seems to becausing headaches more formerchants, who were previouslyused to banknotes for loweramounts, he said, noting thatthe smallest koruna banknoteswere equivalent to €0.66, €1.66,and €3.32 respectively. Thesmallest euro banknote, by con-trast, has a face value of €5.Payments for correspondingamounts in euros have thus beenreplaced by coins, which tend toincur more handling costs, espe-cially for smaller merchants,Vaňo said.

“Other than this technical is-sue, the conversion was not somuch of a problem as had ori-ginally been expected,” Vaňosaid. “Much of the concerns re-garding the public perception of

the new currency were over-shadowed by deterioration in theglobal and local economy, in-cluding worsening labour mar-ket conditions, and especiallynews – which came almost daily– about the significant depreci-ation in regional currencies.”

Between September 2008 andMarch 2009, the Czech crownweakened by over 11 percentagainst the euro, the Romanianleu weakened by almost 18 per-cent, the Hungarian forint byalmost 25 percent, and the Polishzloty by almost 30 percent.

“Just a few weeks after euroslanded in the wallets of Slovaks,it turned them into “hardcurrency” visitors, a term usedbefore the fall of the Iron Cur-tain for western German visitorspaying with [Deutsche] marks,who could enjoy cheap shoppingtrips to Czechoslovakia, Hun-gary, or Poland,” Vaňo noted.“One should note that cross-border shopping has alwaysbeen a dominant phenomenonin the border regions of Slovakia– except that this time the signi-ficant currency depreciationmade zloty, koruna and forintprices notably cheaper for Slov-aks shopping with euros. At thesame time, this helped to fur-ther constrain local price devel-opments – though inflation wasalready on a downward path dueto the increase in unemploy-ment and hence softer con-sumer demand.”

Inflation

As for how inflation mighthave developed if Slovakia hadnot adopted the euro, Vaňo saidthat “a quick glimpse at the ex-change rates charts and con-sumer price indices in the regiongives an unequivocal answer:Slovakia could hardly haveavoided significant depreciationat the beginning of 2009 and acorresponding rise in inflation”.

According to Vaňo, eventhough most of the weakeninghas been unwound in sub-sequent months, its effect onprice levels lingers on: as ofNovember, Slovakia, with itszero inflation enjoys an annualpace of HICP (Harmonized Indexof Consumer Prices – the stand-ard used by European statisticsagency Eurostat) inflation sever-al percentage points lower thanHungary, with 5.2 percent, Po-land, with 3.8 percent, or Ro-mania, on 4.6 percent.

“The Czech Republic, it istrue, is faring similarly well, at0.2 percent, but this comes at theexpense of a stronger Czechcrown, which has completelyreversed its January-Februaryweakness and hence given localexporters very few reasons forjoy over the ‘textbook’ expecta-tions of a weaker currency sup-porting the recovery of export-driven industries,” the analystsaid. “Moreover, the risk appet-ite and gradual appreciation [ofthe crown] since March of 2009have foreshadowed for neigh-bouring exporters a taste of theforeseeable currency volatilityonce the uncertainty and reces-sion end, some time in the fu-ture, and regional currenciescome under renewed pressure toappreciate and thus make theirexports to the eurozone moreexpensive.”

The National Bank of Slovakia, plus euro. Photo: Jana Liptáková

STATE: Deficitballooned in 2009Continued from pg 1

“It is a positive signal thatif there is an effort to cutspending then it can work.”

The fact that the state defi-cit for 2009 swelled to almosttriple the originally-plannedbudget does not come as a bigsurprise to Eva Sadovská, ananalyst with Poštová Banka,who said that the original defi-cit had been exceeded begin-ning as early as June 2009.

“Last year’s state budgetwas significantly impacted bythe global economicdownturn,” Sadovská told TheSlovak Spectator. “For ex-ample, the loss of employmentby many Slovaks means notonly a loss of taxes by the statebut also additionalexpenditures.”

After the October revisedbudget, planned expendituresfor the entire year remainedat €14.125 billion while actualspending reached only€13.332 billion. Nevertheless,actual state expenditures for2009 increased by 10.6 percentyear-on-year, the SITA news-wire wrote. State revenues –at €10.541 billion – failed tonot only reach what wasplanned for 2009 but wereeven 7.1 percent lower thanthe previous year.

“Total revenues dipped by19.6 percent less than the ori-ginal budget plan and it wasmainly tax revenues, whichwere 18.8 percent lower, thatare behind the deficit,” saidSadovská.

But government spendingwas cut by only 5.6 percent,she added.

The state collected 80 per-cent less in income taxes fromprivate entities than the ori-ginal plan for 2009, before theOctober revision, according toSadovská.

The lower tax revenueswere influenced by weakerconsumption, thus less VATcollected, and lower revenuesand income by firms, she ex-plained.

The collection of VAT, thelargest source of taxes inSlovakia, significantly laggedbehind the original plan,posting a 17-percent dropyear-on-year to €3.846 billion,according to the year-enddata released by the FinanceMinistry. However, collec-tion of value added taxes ex-ceeded the revised Octoberbudget by 3.5 percent. Excisetaxes collected fell by 3.7 per-cent year on year to €1.835 bil-lion, SITA wrote.

In contrast, income taxespaid by legal entities increasedslightly by 0.4 percent to €2.13billion to account for 102.5 per-cent of the revised budget plan.Withholding taxes had thedeepest year-on-year decline:down 24.4 percent to €155.8million, but 2.1 percent morethan the projection in the re-vised October budget.

Sadovská said if the actualend of year deficit is com-pared with the revised statebudget, the bottom line isslightly better than what wasprojected in October.

“However, the state failedto fully fulfill the adjusted Oc-tober plan in terms of revenuessince it collected €430 millionless, which is 4 percent belowthe plan,” Sadovská said. “Onthe contrary, spending droppedonly 5.6 percent from the ori-ginal budgeted amount whichhad remained unchanged dur-ing the October revision. Onecould hardly talk about any sig-nificant tightening of the belt.”

The state spent one-tenthmore in 2009 than in 2008,Sadovská said, adding that ac-tual total 2009 revenuesdropped by more than 7 percentcompared to 2008 while reven-ues from taxes dropped bymore than 11 percent whencompared to 2008.

Sadovská said that becauseof these developments, Slov-akia cannot come close to keep-ing its public finance deficit be-low 3 percent of GDP as re-quired by the Maastricht criter-ia; she predicted that the deficitas a percent of GDP will be morethan twice that limit.

The Finance Ministry hasprojected a public finance de-ficit for 2010 of 5.5 percent ofGDP as it expects the revival ofthe economy will be ratherslow and that unemploymentwill remain relatively highand tax revenues will increaseonly gradually.

“Moreover, this will be anelection year and thus thereare certain risks that the defi-cit won’t be lower in 2010,”Sadovská said. “We see an op-portunity for savings in moretransparent public procure-ment and in re-evaluation ofsome of the core goals of thegovernment.”

After the budget deficit ex-ceeded 6 percent in 2009, theplan to reach 5.5 percent for2010 gives the impression ofconsolidation efforts, Sadovskásaid, but she suggested thatthis effort could be much morerobust and should move the de-ficit closer to 5 percent.

Finance Minister Ján Počiatek Photo: SITA

13January 11 – 17, 2010BUSINESS / NEWS

TV: President calls for areturn to 'basic values'

Continued from pg 2

Apart from this, he focusedmainly on moral failure in soci-ety, with damaged relation-ships and many lonely people.In his view, money and greedin society are the reasons forthis situation.

“At present money mainlyhumiliates us,” he said in thespeech. “It makes us servants ofthe interests of others. There isno better proof of this than thecurrent global crisis.” The worldtherefore needs to resolve itsmoral failures first, he opined.

He appealed for a return towhat he called the basic univer-sal moral values of humanity.He called for awareness that“the most precious thing thatlife gives us is life itself” – fam-ily, friends, loved ones – andurged people to dedicate moretime to them, especially to chil-dren. Finally, he wished Slov-aks a better, more secure andmore dignified year.

The traditional New Year’saddress was broadcast by thepublic-service broadcastersSlovak Television (STV) andSlovak Radio, as well as by theprivate TV news channel TA3.According to figures publishedby the Sme daily, the addresswas watched on STV by about343,000 viewers, while a par-ody broadcast by the privateTV channel JOJ at the sametime was viewed by 616,000people. An additional 56,000viewers saw the president’sspeech on TA3.

“It was the speech of a vil-lage priest,” was the judge-ment of political analystMiroslav Kusý, in comments toThe Slovak Spectator. “The

speech could have been givenby any village priest to his flockas some kind of moral messagefor the new year. There wasnothing that went beyond amoral lament.”

According to political ana-lyst Juraj Marušiak, the speechwas shallow and empty.

“The president, or his team,was not even able to handle ef-fectively the topic that wassupposed to form the core of thespeech – that is, orientation to-wards spiritual rather than ma-terial values,” he told The Slov-ak Spectator.

Marušiak also said that thespeech mirrored the position ofthe president, who is not evenusing the possibilities that he isgranted by the Slovak Constitu-tion to influence public life.

“If the ruling coalition ex-pected him to support theiragenda, they were mistaken,”he added.

According to Kusý, thepoint in the president address-ing the nation at the beginningof the New Year is to balancethe past year and to bring somevision for the near future.

“This is how the traditionwas founded in the time of [thefirst Czechoslovak presidentTomáš Garrigue] Masaryk andthis is the tradition that bothCzech and Slovak presidentscontinued,” Kusý said. Withoutthis he believes the address tobe useless.

The tradition started withthe first New Year’s addressgiven by Masaryk in 1919, afterthe first Czechoslovak Republicwas founded in October 1918.The address was originallybroadcast over the radio, and inlater years on television.

Nokia CEE chief welcomescompetition from Google

JÁN Kolimár shares the visionthat the content inside a phonewill be more important than thephone itself and he suggests thatin few years no one will make bigmoney with running a commu-nication business with voice ser-vices alone. “However, we shouldbe helping each other with theoperators,” said Nokia’s GeneralManager for Central Europe in aninterview with Sme.sk and TheSlovak Spectator.

The Slovak Spectator/Sme: Hasthe economic crisis impactedyour company?

Ján Kolimár (JK): The crisiscan also be a catalyst for changeand Nokia is undertaking some ofthese changes right now. I’m notsure whether it was due to thecrisis, but we managed to optim-ise some of our processes thanksto this catalyst. Instead of intro-ducing 50 phones a year, it will befar less in the near future. We willfocus on quality and on our iconicproducts.

We don’t live on a desert is-land, but I don’t think we will beas “interesting” in this area [ofcrisis impacts] as, for example,the automotive industry.

TSS/Sme: In Microsoft, de-velopers were first affected bythe crisis. Was it similar inNokia?

JK: We’re more focused onprograms than on cutting staffnumbers. Simply said, the prior-ity here is to develop programswith a guarantee of success.

TSS/Sme: Does it mean a slow-down in development?

JK: I wouldn’t say that it willslow development down. It willreduce the number of novelties tojust those which we believe couldsucceed.

TSS/Sme: From a global per-spective, Nokia remains a lead-er. How is the company doingin the region and in Slovakia?

JK: Besides our phones, wehave begun to concentrate onservices. Not so long ago I saw avery good campaign on our Ovi[internet services]. Ovi means“door” in Finnish and we areopening the door to new applica-tions. In addition to havingstrictly the Symbian [operatingsystem] phones, intendedprimarily for applications, wehave also moved to Linux whichis a real applications’ incubator.Then we also have our 3G Bookletmini laptop.

TSS/Sme: Ovi is a noveltywhich motivates users to con-nect their devices to the inter-net and, at the same time, thisperhaps “clashes” the mostwith Google.

JK: Two or three years ago,the introduction of a new phoneconcept by a certain companyshifted mobility and the use ofmobile phones ahead. Similar tothat, we used to claim that ourdevices would no longer onlytransmit voice and SMS mes-sages but they could be used alsoas multimedia devices. That’swhat we used to say at the be-ginning of 2000 and we do fur-ther follow this strategic direc-tion. Google and Apple are mov-ing in a very similar way.

TSS/Sme: You were second inintroduction of that kind ofservice. Google has some ap-plications similar to Ovi aswell. Is this the direction youwant to follow?

JK: Google has its own busi-ness model. Nokia Maps andGoogle Maps are very similarand no new technologies areabout to be invented. A signific-ant difference lies in the policyof Google, which is focused onadvertising and on the onlineworld. We have our own policythat is concentrated on

strengthening the telecom sec-tor, especially its mobile inter-net services.

TSS/Sme: Is the concept of anenvironment with an opensource code developed by sev-eral companies in any wayforeign to you?

JK: Nokia has been followingthis direction from the very be-ginning. Symbian is open, too.We have around four million de-velopers around the world. Atthe same time, we don’t preventthe Symbian developers fromworking for other companies.Ovi is also an open platform.

TSS/Sme: Not so long ago a vis-ion of a Google Phone waspresented. Do you regard it asmajor competition?

JK: There are lots of devicesto compete with. I’ll say it inmore general terms instead ofexpressing my opinion on justone product. I’ve been in Slov-akia for 11 years and all that timewe have had competition. Nokiafirst had mono-blocs, thensomeone came out with a fold-out phone and subsequently webecame leaders in this segment.It was similar in the case of 3Gphones and touch screen devicesthat came after that; but itdoesn’t mean that we were al-ways first. Our strength, ourbrand and the interconnectionof our users has always helpedus. Anyway, to give you an an-swer regarding Google Phone,we welcome such competitionthat moves the mobile internetforward.

TSS/Sme: Do you considerGoogle to be such a competit-or?

JK: I surely do.

TSS/Sme: Can you actuallyimagine bringing a phone to

market that would be able towork even without a mobilevoice operator?

JK: We already have applic-ations that allow us to avoid amobile operator. For example,we have Skype in our mobilephones. We’ve been providingthese services in our phones forabout four years. I guess theworld won’t collapse if such aphone appears. A new businessmodel will be invented but op-erators and all the other playerswill remain.

TSS/Sme: Is your strategy go-ing to follow the way of ex-tending phones’ VoIP (voiceover internet) features?

JK: You can see it yourself.Voice services have already be-come a commodity. In a fewyears nobody is going to makebig money with the voice itself.It has already begun to happen.

TSS/Sme: You have been work-ing for Nokia for 11 years. Howcan a Slovak get the positionof Director for Central Europeand keep it in such a globalcompany for 11 years?

JK: This is my sixth yearoutside the Slovak Republic.Nokia is an open company thatprovides space for active peopleunder one condition: some-times they have to rid them-selves of comfort and be readyto travel. I worked as Sales Dir-ector in Moscow for two years.Both the improvement of ourposition there and a sales in-crease helped me get the posi-tion of General Manager for theCzech Republic and Slovakia. Ithelped me get responsibilityalso for Poland and the othercountries came subsequently.

TSS/Sme: Is your work moreabout doing business or aboutstrategic planning?

JK: It was more relation-oriented at the beginning. Iused to make phone calls backthen and now I’m writingemails - that’s how I would de-scribe it [laughs]. I still meetclients, but now it’s beingscheduled more in advance. Yet,I couldn’t do it without a goodteam around me.

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ENGLISH LANGUAGE WORSHIPBratislava International Church

Sundays, 9:30 at historic Small Lutheran Church(Maly evanjelicky kostol) in central Bratislava(near Hodzovo namestie); on Lycejna at intersection with Panenska 26/28. Children's Sunday School provided.

Everyone Welcome.Information at 02-5443-3263 Web Site: www.bratislavainternationalchurch.org

INVESTMENT AdvisoryGUIDE 2009

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Contact our Circulation Department: tel: +421 (0)2 59 233 300, fax: +421 (0)2 59 233 319 e-mail: circulation@spectator.sk, or spectator@spectator.sk

TSS INTERVIEWBY ADAM VALČEK

& TOMÁŠ ULEJSpecial to the Spectator

Following Masaryk's example: the president speaks. Photo: SITA

14 January 11 – 17, 2010 CULTURE

Western SLOVAKIA

BratislavaDANCE: Homage to Cows – Thismusical-dance-artistic-theatric-al happening was born from co-operation between the ElledanseDance School and Theatre led byŠárka Ondrišová and Slovak cho-reographer and dancer BorisNahálka.

Starts: January 15-16, 20:00.Admission fee: €4 - €6. Elle-danse, Miletičova 17/B. Tel:02/5541-0716, www.elledanse.sk.

BratislavaCLASSICAL MUSIC: The PopularCycle – The Slovak PhilharmonicOrchestra begins its new yearwith pieces by John Williams,including music from the filmsStar Wars and ET - the Extra-Ter-restrial; and by Gustav Holst'sThe Planets.

Starts: January 14, 19:00.Admission: €7 - €9. The histor-ical building of the NationalTheatre, Hiezdoslavovo Square,tel: 02/2047-2111,www.filharm.sk.

BratislavaOPERA: Carmen – George Bizet’sCarmen is one of the most pas-sionate and famous operas anddirector Richard Eyere gives it aninnovative approach. This livebroadcast from the New YorkMetropolitan Opera in highdefinition is led by conductorYannick Nezet-Séguin.

Starts: January 16, 18:45. Admis-sion: €14. Aréna Theatre, Vieden–ská cesta 10. Tel: 02/6720-2557,www.divadloarena.sk.

Bratislava:DANCE: Belly-Dance Yesterday,Today, and... (Brušný tanecvčera, dnes a....) – Dance exhibi-tion by the Association of Ori-ental Dance, Zatun Dahabee,presents Leyla Damab, Elisha,Zuzana and their students show-ing off their newest choreo-graphies.

Starts: January 14, 19:00.Admission: €4. DK Zrkadlový HájHouse of Culture, Rovniankova3. Tel: 02/6383-6776, www.kzp.sk.

PrievidzaLIVE MUSIC: Karel Gott – DivineNew Year. The biggest star ofCzecho-Slovak pop music, whosepopularity has lasted for more

than half a century, comes backwith Boob Band and a specialguest, the vocal band Fragile.

Starts: January 11, 19:00.Admission: €29. City Aréna,Mariánska 35. Tic–kets: www.ticketportal.sk orwww.nabrehu.sk.

KomárnoLIVE MUSIC: Presser Gábor – Thislegend of Hungarian rock, whoplayed with the Omega band andwho founded the cult Locomot-ive GT band, gives a concertcalled Songs and Some Stories,which is an allusion to his CDtitled Kis történetek.

Starts: January 15, 19:00.Admission: €10. Jókai Theatre,Petöfiho 1. Tel: 035/7908-112,www.jokai.sk.

Central SLOVAKIA

Banská BystricaBALL: A Thousand and OneNights (Tisíc a jedna noc) – Thefirst charity ball on the city isnamed correctly as it will fea-ture oriental dancers, fakirs, aslave market, the dance studioAlishaba and historical culture

group Cassanova, an orientalbazaar and much more.

Starts: January 15, 20:00.Ticket: €30 and €40. PKO (formerHouse of Culture), NámestieSlobody 3. Tickets can be boughtat: IC Banská Bystrica, tel:048/4155-085; MsÚ BanskáBystrica, tel: 048/ 4330-520(-3) .

ŽilinaLIVE MUSIC: Good For Cows –Devin Hoff (contrabass) andChes Smith (percussions, XiuXiu) return to Stanica, wherethey gave a memorable concertback in 2008. Their music is onthe edge between compositionand improvisation, free-jazz,drum & bass and avant-garde.

Starts: January 12, 20:00.Admission: €2 - €3.50. The Stan-ica Žilina-Záriečie CultureCentre, Závodská Cesta 3. Tel:041/5623-564, www.stanica.sk.

Eastern SLOVAKIA

KošiceFASHION: Beata Rajská FashionShow – Rajská is an establishedSlovak fashion designer who hascreated designs for the Czechentrants at several Miss con-tests, including Miss WorldTourism. At that show, the de-signer won the award of MostBeautiful Evening gown.

Starts: January 11, 18:00;20:00. Admission: €10 - €65. StateTheatre, Hlavná 58. Tel:055/16-186, www.espacestudio.sk.

PopradEXHIBITION: Starry Messages –Ján Zoričák belongs among themost outstanding glass-workingartists; his design was selectedfor the 1967 EXPO in Montreal.He has become one of the repres-entatives of prismatic plastic art.

Open: Tue-Sun 10:00-17:00,until January 17. Admission: €1.The Electricity Plant of the TatraGallery, Hviezdoslavova 12. Tel:052/7722-617, www.tatragaleria.sk.

By Zuzana Vilikovská

Skiers welcome fresh snow

We are now having in January what is oftencalled “The Wintertime of Three Kings”. It hasbrought an appreciable temperature drop as wellas fresh snow. The snow conditions in Slovakia’smountains are still far from ideal and in most re-sorts skiing is possible only because of machine-made snow. But the positive thing is that the hillsbeyond the ski slopes are finally covered in whiteand the experience can now, at last, be called“winter skiing”. The highest altitude ski slopes inthe High and Low Tatras still need at least anothermetre of natural snow so skiers everywhere canski beyond the forest level, which is only possiblenow at Solisko and Štrbské Pleso. New cablewaysin Banská Štiavnica, Krahule, Bachledova Dolinaand Jasná have now been opened.

Winter weather with freezing temperaturesat altitudes of 1,500 metres or higher will prevail

this entire week, ranging from about -6 to -10 de-grees and if there is some additional snowfall,skiing conditions will improve considerably.With the Christmas holidays over, an idealwinter holiday can be expected with lodging fa-cilities often offering big price reductions, slopesbeing less crowded, and lifts without long queuespermitting more skiing for the cost of your liftticket.

By Roman Millan, www.lanovky.sk

The Lord of the Váh

Castle ruins are one of the mainlures for tourists in Slovakia.They attract visitors with theirpicturesqueness and monu-mental size, like the one at Beck-ov. Its attractiveness can beascribed among otherthings also to its loca-tion – sitting upon a30-metre tall, lime-stone outcrop.

Its fame camemainly from Ctibor,the owner of the castle at the turnof the 14th and 15th centuries.Polish by origin, he was a loyalservant of kings of Hungary. Itwas his loyalty and especiallygood relations with King Sigis-mund that made him an unusu-ally influential man, who con-trolled a considerable part ofpresent-day Slovakia.

His influence was reflectedin the imposing title which thisnobleman started using in 1400 –“The Lord of the Váh”. However,Ctibor was not just powerful,but also an enlightened feudal

lord. He invited builders, paint-ers, and sculptors from Veniceand the Veneto region of Italy towork on his grand reconstruc-tion of the castle. Near to theVáh River, it was one of the firstRenaissance buildings in Great-er Hungary which also pre-served older, Gothic elements.Beckov Castle was also unique

from a defensive point of view.From around the middle of the17th century, as the Ottomansplundered western Slovakia,the castle became a haven forHungarian aristocrats in the

vicinity. Raidersfailed to conquer itin spite of the factthat the flat terrainmade it possible toreach the very footof the castle rock. It

was struck a fatal blow in 1709when sparks from a fire in thenearby town set alight thewooden beams and rafters ofthe fortress and it burned to theground. The ruins of Beckov aredepicted in this postcard from1939.

By Branislav Chovan

The first snow brings joy and fun to Slovak skiersand winter-sports lovers. Photo: Roman Millan

THE STATE Opera in Banská Bystrica offers, apart from typical pieces,some less traditional performances. The dance theatre Gypsy Rootsby Goran Bregovič (music) and Dana Dinková (directing, choreo-graphy) shows the romance between a young Roma boy and a whitegirl, with Beata Gaálová and Andrej Andrejkovič as the main actors.The rare atmosphere evoked by the music of world-renowned Serbianmusician Goran Bregovič can be enjoyed on January 12 at 18:30 for €5.For more info, call 048/4154-544, or see www.stateopera.sk.

Photo: Courtesy of Štátna Opera

THE EXHIBITION of the Slovak National Museum (SNM) in Bratislavacalled With a Wire in the Head (S drôtom v hlave) is a joint show ofSNM, the Museum of Puppet Culture and Toys at Modrý Kameň andthe Anderle Family from Banská Bystrica. It shows traditional puppetsin their full glory with several accompanying events. The exhibitionruns until March 28, with opening hours at the main SNM building atVajanského nábrežie from 9:00 to 17:00. The admission fee is from €2to €3.50 . For more info, call 0 2/ 5934-9 122 or see www.snm.sk.

Photo: Author of the exhibition, Juraj Hamar; Courtesy of SNM

HISTORY TALKS

EVENTS COUNTRYWIDE

I n c o o p e r a t i o n w i t h t h e S l o v a k H y d r o m e t e o r o l o g i c a l I n s t i t u t e

Weather updates and forecasts from across Slovakiacan now be found at www.spectator.sk.

N A M E D A Y J A N U A R Y 2 0 1 0

Monday

Malvína

January 11

Tuesday

Ernest

January 12

Wednesday

Rastislav

January 13

Thursday

Radovan

January 14

Friday

Dobroslav

January 15

Saturday

Kristína

January 16

Sunday

Nata‰a

January 17

A Slovak’s name day (meniny) is as important as his or her birthday. It is traditional to present friends or co-workers with a small gift, such as chocolates or flowers, and to wish them Všetko najlepšie k meninám (Happy name day)

SKI WINDOW

Ski conditions around Slovakia (as of January 6)

CENTRE SNOW CONDITIONS SKI PASS PRICE IN € LIFTS IN OPERATION

Donovaly 40 cm good €22 5/15Jasná – Sever 20-80 cm very good €29 11/24Chopok – Juh 80 cm very good €19 3/6Martinské hole 60 cm very good €22 1/6Štrbské Pleso 80 cm very good €22 4/6Lomnické sedlo 30 cm unsuitable €27 0/1Tatranská Lomnica 50 cm very good €28 9/14Zverovka 60 cm very good €20 3/4Skipark Ružomberok 40 cm very good €22 3/8Vrátna 40 cm very good €22 3/15Veľká Rača 45 cm good €22 3/6

A bridge towardsRoma inclusion

WALKING across Bratislava’sNew Bridge instead of drivingover it by car can sometimesturn out to be much more enjoy-able. Apart from enabling you toavoid one of the frequent trafficjams, the stroll can take you to acompletely different world,which you would hardly expectto find among the bridge’s greyconcrete pillars. Such was thecase in recent weeks, when thisfuturistic construction land-mark, also known as the UFObridge, hosted an interestingphotographic exhibition.

Entitled Aven Romale, orCome On, Gypsies, the event wasthe fruit of co-operation betweenthe Royal Netherlands Embassyin Bratislava and the Košice 2013European Capital of Culture(ECOC) team.

Five months after itspremiere in the eastern metro-polis, the exhibition was movedto Bratislava on the occasion ofInternational Human RightsDay, December 10.

“When the embassy wasplanning an activity for Interna-tional Human Rights Day, wethought Aven Romale would be aperfect match for the topic,” saidYvette Daoud, the DutchEmbassy’s deputy head of mis-sion. “By the way, we chose tofocus on the position of theRoma because Slovakia holdsthis year’s presidency of the‘Decade of Roma Inclusion’ andalso since the theme for Interna-tional Human Rights Day 2009was ‘diversity’.”

On December 10, the displaywas installed above the Danube,on the New Bridge. It is not thatBratislava lacks sufficient exhib-

ition halls, but the organiserswanted to make the photo-graphs accessible to as manypeople as possible.

“It is not by accident thatAven Romale takes place at theNew Bridge,” Daphne Begsma,Dutch Ambassador to Slovakia,said at the opening. “This struc-ture connects the historicalcentre with the newer parts ofBratislava, just as our mental,symbolic bridge should connectmajority to minority or one’s ste-reotypes to the reality of others.”

The uniqueness of the dis-play, however, does not lie onlyin its unusual setting. The au-thors of a majority of the photo-graphs were 22 Roma childrenaged between 4 and 17 fromLuník IX, the infamous Romaghetto in Košice, who had takenpart in a three-week workshopled by Dutch artist Rob Houkesin summer 2009. The parti-cipants not only took the photos,but also learned how to processthe film in a darkroom.

“Our aim was to inviteyoung Roma people from LuníkIX to show us through the lensof a camera who they are, whatthey think and how they viewthe world around them,”Houkes told The Slovak Spectat-or. “Then we put together thepictures they had taken, in

black and white, and my por-traits of them, in colour, so as tobuild a faithful representationof their personalities.”

Though Houkes is a profes-sional photographer and his pu-pils were only beginners, he saidthat the workshop enriched himjust as it enriched the children.

“I must say I was totally sur-prised by the images they madeas well as by their approach,” hesaid. “It wiped away all stereo-types I probably once had. Ifound out that the people Iworked with were extremelyfriendly, open and self-confidentwhich is a miracle, given the cir-cumstances in which they haveto live. So I think everybody, in-cluding myself, found the work-shop a very special and unforget-table event.”

Houkes also added that Romapeople's thoughts and feelingsare surprisingly close to those ofthe majority population.

“In one way, their percep-tion of reality is a little different,because Roma have had to facediscrimination and exclusionfrom society for many, manyyears, not to mention the holo-caust, which is of coursesomething that changes yourview of life,” he remarked. “Onthe other hand, I have learnedthat Roma are people like you

and me. They enjoy their lives,they love their hometowns andthey have the same pleasuresand expectations like you andme. That is what the exhibitionis showing.”

Aven Romale remainedopen until last week. Thosewho missed it, however, neednot lose heart. Both the Dutchembassy and Košice 2013promise more activities likethis to follow.

“The Royal Netherlands Em-bassy has been running severalprojects in its long-term com-mitment to Roma issues andmatters of human rights,” JanaKadlecová, press and politicalassistant at the embassy told TheSlovak Spectator. “In the follow-ing months, we are planning tocontinue supporting initiativesfocused on topics such as the ju-diciary, transparency, corrup-tion and freedom of the media.”

As for the Roma childrenfrom Luník IX, Houkes statedthat Aven Romale was certainlynot the last project in theirneighbourhood.

Christian Potiron from theECOC team agreed.

“We are very satisfied withthe results of Aven Romale, butour evaluation has shown thatthere is a need for long-term in-volvement in this kind of activit-ies and in this environment,rather than one-off events,” hesaid. “We are therefore planningto realise more events in thefield of social arts and we hopethat some of them will also bejoined by other NGOs. In 2010,for example, a street dancesummer academy is expected tobe held in Luník IX.”

As Potiron told The SlovakSpectator, working with Romacitizens is only a small part oflarge-scale efforts towards betterRoma inclusion.

“We do not pretend by suchprojects to solve social or politic-al problems of this community,”he underlined. “We simply wantto give those people equal oppor-tunities for developing their cre-ative skills and tools for self-ex-pression, and offer them morepossibilities to have quality freetime just like other Slovaks.”

Photographs taken by Roma children adorned the pedestrian walkway of Bratislava's New Bridge in December. Photo: Courtesy of Euforion

BY DOMINIKA UHRÍKOVÁSpectator staff

Aven Romalemarked

InternationalHuman Rights day

in Bratislava

Film review: Avatar

AvatarDirector: James CameronStarring: Sigourney Weaver,Sam Worthington

IT'S ONLY been a couple ofweeks since the Christmas fest-ivities and you might still besteering clear of overindul-gence. If so, James Cameron’sAvatar – 10 years in the mak-ing, a running time of nearlythree hours and a $280 millionbudget splashed on bountiful,opulent computer-generatedimagery (CGI) – is probably bestavoided on health grounds.

Avatar is an outrageousassault on abstinence. Set onthe faraway moon of Pandora,a population of 10-foot tall, fe-line-featured humanoids (anda cast of other fantasticalfauna) flit through a jungle ofbright turquoise, purple andorange, where verdant moun-tains also float in the sky. Themoon is sustained by a won-drous “soul tree”, all willowytendrils and translucent ener-gies, into which the popula-tion – the Na’vi – can plugtheir bodies, both to rechargeand to connect as part of apantheistic nirvana.

This is as visually ambi-tious a film as has ever beenproduced and the only way toexperience it is to visit: we areinvited to don Aviator-styleshades through which to haveour minds boggled in 3D. Withthe going so good, it’s a drag tohave to worry about a plot, es-pecially one penned by Camer-on. But all delights come at acost, and the lustrous masteryof Avatar merely comforts usfor a sermon to follow.

The year is 2154 and weenter this world alongside aunit of environmental scient-ists, including SigourneyWeaver’s Dr. Grace Augustineand a paraplegic former marinenamed Jake Sulley (Sam Wor-thington). After a six-yearjourney, the explorers arrive tofind a thriving moon com-munity, but all is not quiteideal in the idyll.

The human species hasonce again loused up its ownplanet and is now having acrack at Pandora. Grace’s creware intent on study rather thanslaughter, but there is also anarmy led by the slitheringParker Selfridge (GiovanniRibisi) and his henchman Col-onel Miles Quaritch (StephenLang). Those two are hell bent

on extracting a “super mineral”from Pandora known as“unobtanium” (really) andworth $20 million per kilo.Force will be utilised if neces-sary.

Both factions intend also toemploy a rather neat progres-sion in computer game techno-logy. The scientists have de-veloped avatars of the Na’vi –functioning replicas “driven”by transposed human con-sciousnesses. Jake’s avatar isembedded among the Na’viwith a dual mission: to learntheir ways but also to persuadethem to ship out and yield theirnatural gifts. Unsurprisingly,the indigenes are none tookeen, and neither is Jake oncehe has fallen in love both withthe ravishing princess Neytiri(Zoe Saldana) and with the hip-pie lifestyle. His military re-solve soon dissolves, like a fu-turistic gap year student, lastseen strumming a guitar in ayouth hostel in Goa.

There’s certainly some funto be had on Pandora – ridingwinged beasts among hoveringwaterfalls seems like a blast.But otherwise Jake is signingup for a humourless life. TheNa’vi are never so content aswhen earnestly and supercili-ously bonding with nature andtheir default position whenthreatened is to strut and rantand draw back their bows tofight. This macho jostling, jeal-ousy, and grand rhetoric is notso different from their humanadversaries’. Back at base, thereis snarling avariciousness andimpatience among the hu-mans, where it is also interest-ing to note what prosaic trap-pings Cameron expects willendure 150 years into the fu-ture. Although mining will beplotted on hologramaticscreens and carried out bymighty space marines, theircommanders still putt golf ballsinto mugs along the floor oftheir offices. Smugness standsthe test of time, along withwanton aggression, and soonbattle lines are drawn with theobdurate Na’vi.

What we have after that is aremorseless and idiot-driveninvading force, stompingblindly and bloodily into hos-tile foreign territory, seeking toplunder vast natural reservesfor purely commercial benefit.Did someone say metaphor?Cameron’s CGI stretches to epicbattle scenes, which continueto dazzle, but if this is a visionof the future of cinema, then interms of character, plot andmotivation, we should expectsomething drearily similar towhat we already have.

Avatar: $280 million and ten years in the making. Photo: outnow.ch

A young Roma artist mimics his portrait. Photo: Courtesy of Euforion

CULTURE 15January 11 – 17, 2010

BY HOWARD SWAINSSpecial to the Spectator

16 January 11 – 17, 2010 FEATURE

Animals in rescue centreenjoy Christmas dinner

THE BRATISLAVA-BASED an-imal rescue centre AnimalFreedom (Sloboda zvierat)shared in the festive atmo-sphere this Christmas.

“We organised a collectionof animal food, blankets, andother necessary items that couldhelp our nurslings survive theharsh winter,” centre spokes-person Edita Gardonová said.

The rescue centre was openduring Christmas, and onSunday, December 27, it organ-ised small get-togethers for thepeople that help with the anim-als and take them for walks. ForChristmas dinner, the animalsate chicken meat with pasta.

But the holiday season alsobrings many more animals tothe rescue centres – those givenas ‘unwanted gifts’, or whichare wanted but, after the schoolholidays end, cannot be takencare of.

Activists belonging to theUnion of Mutual Help of Peopleand Dogs (Únia vzájomnejpomoci ľudí a psov) in Košicesaid that the number of aban-doned animals in the city hasrisen steeply.

“On average, we manage tofind a new home for an animalwithin four to six weeks, but thenumber of abandoned animalskeeps soaring, so we are tryingto persuade people to keep theanimal at home until we find it anew home,” said RomanaŠerfeldová, chairperson of theunion’s board.

Šerfelová added that eachtown and city should financeand take care of animal rescuecentres, as activists do a lot ofgood not just for the animals,but also for citizens in general.

In Košice, the union is build-ing a new centre in the suburbs,which should have space for 250dogs and cats. The union willpay a symbolic rent to the city ofKošice of €0.03 and will be giventhe premises in 2025.

Several other animal rescuecentres have already embracednew guests, just a few days intothe new year. However, thebiggest interest is expectedafter January 11, when theschool holidays end. Gardonováof the Bratislava centre saidthat the greatest number of petswhich have turned up this yearran away from their homes infear during New Year fireworksdisplays, and might still be re-turned to their owners.

The rescue centre inPiešťany has also received newdogs, including seven Rott-weiler puppies, since Christ-mas Eve. The head of thecentre, Ľubomíra Baleková,says that an increasing trend isfor breeders to bring in puppiesthat they are unable to sell. Thistrend has been confirmed byanimal rescue centres inKomárno, Skalica and Prievid-za. The chairman of the the An-imal Friends (Priatelia zvierat)association in Prešov, MichalHaško, added that, unfortu-nately, fewer and fewer aban-doned animals are being adop-ted by new owners.

“We have almost no adop-tions; it cannot be compared tolast year,” Agnes Jelínková ofthe Komárno centre said.

The head of the Skalicacentre, Romana Šenková, saidthat more new owners nowcome from Austria than fromSlovakia.

Slovakia celebrated ChristmasTHE PERIOD around the wintersolstice has long been an occasionfor celebration in Slovakia. Evenin pre-Christian times, eventsand feasts were held to mark theend of each year. There were sev-eral reasons for these: winter wasan ideal time to make merry, asthere were few tasks to completein the fields, and the days areshorter and nights longer. Often,the main date for celebrationswas the winter solstice.

Old Slavic communities cel-ebrated these days as symbolicof new life, as nature preparedfor the re-birth of spring. This iswhy in many traditionalChristmas wishes in Slovakiathe harvest, full barns andtables are featured. From the 4thcentury, the Christian religiongradually transformed the ori-ginally pagan feast into a celeb-ration of the birth of JesusChrist. The Christmas tree dec-orated with fruits and sweetshad two functions: it commem-orated a rich harvest and naturegenerally; and it also symbol-ised the tree of Eden which ledto the fall of Adam and Eve, andto God later sending his son toredeem humankind.

Fried fish with potato salad,a dish now commonly eaten inSlovakia at Christmas, was notalways the traditional meal.Slovaks still fast during Christ-mas Eve, and the first meal of theday has been the festive dinner.Dishes varied from region to re-gion, but thin wafers withhoney and in some places garlic(to ward off evil spirits) werecommon. In many parts of Slov-akia, sauerkraut soup was thefirst course, or some other kindof soup made from lentils, beefstock, or fish.

The meals which followeddiffered greatly but did not usu-ally contain much meat, exceptperhaps for roast cutlets orsmoked pork, and were eatenwith boiled barley; they oftenincluded tiny dumplings ofleavened pastry baked on thecooking range, with sweet milkand poppy-seed. To follow,there came poppy-seed, wal-nut, or jam-filled or apple-filledcakes and strudels. Roma famil-ies typically cooked a pig’s headwhich they got from rich farm-ers, and a Christmas cake,which was often prepared byseveral families together.

In several far-flung villages,mostly Goral ones – i.e. in themountainous regions, where thePolish influence is strong – someold rituals have been preserved.These include enacting theevents in Bethlehem and thecoming of the Three Kings, tak-ing an imitation goat’s head fromhouse to house to wish neigh-bours good luck for the New Year,and puppet theatre.

Generally, the tradition ofyoung people visiting everyhouse in the village and singingChristmas carols (koledy) andwishing people well continues inmany small towns and villages,but has largely vanished in big-ger cities.

Christmas Eve was also theday of the Christmas MidnightMass. On Christmas Day, peopleusually stayed at home and didnot even visit family or friends.No household chores were al-lowed, including cooking. Thesecond day of Christmas wasseen as a day for family andfriends to visit each other. Be-cause December 26 is the day ofthe patron saint of Hungary,there were famous St. Stephen’sDay balls and folk dances.

Christmastime re-enactments of the Nativity story are popular all over Slovakia. Photo: TASR

Festive pooches: dogs at the Animal Freedom centre. Photo: Sme

Prisoners entertain their guardsA COURTROOMthat usually seesverdicts beingread out was usedon December 14to display the

skills and abilities of prisonersand their guards, together withJustice Minister Viera Petríkováand Supreme Court PresidentŠtefan Harabin.

A group of men serving sen-tences for minor offences at aprison in Sučany (Žilina Region)used the building of the SupremeCourt in Bratislava to act out thebiblical story of Jesus Christ be-ing born, through the eyes ofSlovak shepherds, thus in-volving Slovak traditions in the

show. In past years, the pro-gramme had comprised severalitems performed by various pris-oners from across Slovakia, butthis year the concept was sim-pler. According to prison chap-

lain Juraj Malý, who organisedand directed the programme, thesongs and acts were not justlearnt but “performed from deepin the prisoners’ hearts”. Most ofall, the chaplain said he was

pleased to hear some of theyoung prisoners singing carolsin their cells. He also thinks thevery feeling that someone is in-terested in them helps them tobecome better human beings.

The famous Slovak priest andwriter Anton Srholec, himself aformer political prisoner, alsowatched their performance. Hesaid that current conditions inprisons cannot be compared tothose during the communist era.He also noted that the treatmentof detainees and prisoners haschanged – from repressive tomore democratic, a change in-tended to turn the convicts into“decent people, evoking theirthirst for creativity”.

Hungarianssurvive

avalancheTHE SLOVAKMountain Res-cue Service(HZS) rescuedthree Hungari-an climbers

early on the evening of Sat-urday, January 2, after theywere caught in an avalanchein the High Tatras moun-tains. The men were able tofree themselves from beneaththe snow despite havingsuffered serious injuries, in-cluding spinal damage.

The Hungarians were des-cending from Kôpky to Dračiadolina. Several groups of HZSrescuers were dispatched tothe site from the High Tatras,Low Tatras, Western Tatrasand from Slovak Paradise Na-tional Park. Due to the badweather conditions, it wasnot possible to send a heli-copter or plane. The victimswere given first aid and latertransported to Popradsképleso. Later, they were drivenin ambulances to a hospital inPoprad. The rescue, the firstavalanche incident of theyear, ended at 16:00.

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Young men from Sučany prison sing a Christmas carol. Photo: TASR

AROUND SLOVAKIAcompiled by Zuzana Vilikovská from press reports

The January 2 High Tatras res-cue operation. Photo: TASR