slovak spectator 17 16

8/7/2019 Slovak Spectator 17 16

1/12

Inflation exceeds EU average

INFLATION has joined ex-hausted treasuries andclimb-ing jobless rates on the list of

worries for many EuropeanUnion countries.

Pricesin Slovakiaare nowgrowing as fast as they did

during the pre-crisis period,and in March inflationtouched its highest levelsince November 2008: 3.8percent year-on-year, asmeasured by the EUs meth-

odology, the harmonised in-dex of consumerprices.Infla-tion in Slovakia was higherthan the EU average of 3.1percent, and the 2.7-percentaverage across the eurozone.Neighbours Hungary and Po-land posted higher inflationratesthan Slovakia, while therate in the Czech Republic

was lower.Recent developments in

commodity markets, where

prices for some food productsare approaching their 2008peak, have prompted concernabout the eventual impact onprices in Slovakia. Market

watchers predict annual in-

flation will approach 4 per-cent inthemedium term,andcould jump well above thatlevel in individual months.

However, market watch-ers also suggest that the de-

velopment of inflation inSlovakiahas specificcauses.

Slovakia last year recor-ded a very low inflation rate;the Slovak government adop-ted a package of consolida-tion measures and regulated

prices have been hiked, EvaSadovsk, an analyst withPotov Banka, told The Slov-ak Spectator.

SeePRICEpg4

SELECT FOREX RATES benchmark as ofApril 20

CANADA CAD 138CZECH REP CZK24.17RUSSIA RUB40.84GREAT BRITAN GBP 0.89

HUNGARY HUF 264.05JAPAN JPY 120.13POLAND PLN 3.97USA USD 145

NEWS

ConstitutionaltiesAvoteby MPsin neigh-bouringHungaryto adoptanewconstitutionhassparked angeramongsomepoliticians in SlovakiawhoaccuseBudapest of assert-ing extraterritorialpowers.

pg 2

LabourCodeadvance?The government,employ-ersand unionsseemto beinching towardsan agree-menton a revisedlabour

law despite loudcomplaintsfrom employer associationsandtrade unions.

pg 4

OPINION

Weighingher wordsThe Mikulk affairsuggeststhatPrime Minister IvetaRadiov should weighherwordsmorecarefully butalso that sheenjoys astrongerpositionthan shemightrealise.

pg 5

BUSINESSFOCUS

Arising tideAftera slightrecoveryin2010,insurersin Slovakiaare hopingcustomers willbuy morepolicies in2011,especiallygiven lastyear'slossesfrom severeweather.

pg 6

GoingonlineDirectsales channels likethe internet, telephoneandSMS areviewed ashavingpotentialfor in-surancecompanies whensellingto tech-savvycus-tomers.

pg 7

CULTURE

DeaddocumentariesAfilm festivalin Koicehasdeclared documentariesdead despite itbeingded-icatedto them.The reason?The descriptionis toolimit-ing,accordingto oneCzechfilmmaker.

pg11

PrimeMinisterIvetaRadiov, FinanceMinisterIvanMikloand SDKchairmanMikulDzurindameton April 19tothrashout theirdifferences overwhetherTaxDirectoratebossMiroslavMikulk should resign. Photo:Sme

Tax boss quits as PM

refuses to back downTHE HEAD of Slovakias Tax Direct-orate, who earlier this year noddedthrough a five-year, 6.6-million of-fice leasing deal with a firm co-owned by a regional official of theruling Slovak Democraticand Chris-tian Union (SDK), resigned on

April 20. A day earlier, SDK leadersh ad appeared to agree thatSlovakias public-finance watchdog

would decide his fate via an audit ofthe deal.

Miroslav Mikulk, who had res-isted a call by Prime Minister IvetaRadiov for him to resign, sayinghe saw no reason to go, announcedon April 20 that he had decided to

quit in order to avoid becoming thesubject of a politicalpower struggle.

Radiov and Finance MinisterIvan Miklo, both members of theSDK, had earlier clashed head-to-head over the fate of Mikulk, mak-ing the other ruling coalitionpartiesedgyandopening thedoortospeculation about a power struggle

within the SDK.Radiov hinted that the SDK

audit deal was little more than aface-saving exercise in a comment

she made following a meeting withruling coalition partners later on

April19. I will remainin thepostofprime minister only if there is nocloud or shadow of suspicion re-maining over the transparency ofthis government, she said, asquotedby SITA.

Then, on April 20, Radiov waslate arriving at a regular session ofcabinet. She confirmed that hertardiness was related to Mikulkscontinuedpresence.

Asked if she had threatened toresign over the affair, she stated: Ihave unambiguously said that I willnot lead a government over whichsuch a shadeis hanging.

SeeSDKpg2

Vol. 17, No. 16 Monday, April 25, 2011 - Sunday, May 1, 2011

FOCUSof this issue

On sale nowOn sale now FOCUSof this issue

INSURANCE

Sprucing upSlovakia forhockey fans

FORTWO weeks inMay, Slovakia will of-ficially turn into the Hockey Republicaccording to the official campaign nowunder way to promote the Ice Hockey

WorldChampionship.Each year in spring, most Slovaks

turn into enthusiastic fans, cheering ontheir national team at the champion-ship: ice hockey is perhaps the countrysmostpopular sport.

In 2011 the excitement will reach afever pitch since the championship istaking place in Slovakia for the firsttime. But questions linger about wheth-er the country is fully prepared to hostsuch anevent.

SeeICEpg3

BYMICHAELATERENZANISpectatorstaff

Internetpaywallerected

THE DAY of the thin grey stripe has ar-rived. Now appearing above content onsome of Slovakias biggest online newsproviders, the stripe indicates that users

will soon though not quite yet have to

pay to view the content beneath it. Theappearance of the stripe marks the launchof a unique multi-site paywall which isabout to divide the Slovak internet intofreeand premium content.

SeePAYpg3

BYMICHAELATERENZANISpectatorstaff

BYBEATABALOGOVSpectatorstaff



2/12

Supreme Court judge dies

A FORMER vice-president of

SlovakiasSupremeCourt,JudgeJuraj Majchrk, wasfound dead inthe garageofhishomein Bratislava onApril14.His deathhas beenruled a suicidebutthe policeare continuingto investigatethe circumstances.

Inthis connectionwehavelaunched a criminalprosecutionin the matter ofthe crimeof participating ina suicide, saidTatianaKurucov, spokesperson forBratislavaspolice,as quotedbytheSITAnewswire. Shedidnotspecify whythepro-secution wasstarted andwhoit mightbe targeted against.

Majchrkwas a known

criticof Supreme CourtPresident tefan Harabin.He hadbeenthe presidingjudgeon several importantcases, including the so-calledacidgangcasein

whichthe bodiesofmurdervictimswere dis-solvedin acid.

Majchrk served as thevice-president of the Su-premeCourt beginning in1999, andin 2000 hewaselectedpresident ofthe As-sociation of Judgesof Slov-akia.He retired earlyfromthecourtlastyearafterbe-ingdiagnosed with a seri-ousillness.

Poll puts Smer support at 43.2%

BOTHparliamentary opposi-tionparties, Smer andtheSlovakNationalParty (SNS),experiencedsmall dropsinvotersupportin themostre-centpoll conductedby Medi-anSK that wasreleasedonApril18.

Smerwould stillhavetaken topspotif anelectionhadbeenheldin March 2011,polling 43.2percent support,a decline ofjustover oneper-centagepoint from lastmonths poll.The SNShadthesupportof 5.9percentofthosepolledcompared to 6.5

percentin February.Most-Hd wasthe onlyparty ofthe quartetin therulingcoalition to losesup-portin theMarchpoll com-pared toFebruaryas it was

backedby only5.1 percentofthosewho responded,just abovethe 5-percentthreshold needed to enterparliamentand down 1.4percentage pointsfromFebruary.

The Slovak DemocraticandChristianUnion (SDK)gainednearly3 percentagepointsoverthe poll taken inFebruary andgarnered17.1-percentsupport inMarch.The Christian Demo-craticMovement(KDH)sawits polling numbers increaseslightly fromFebruarys9.2

percentto 10.1 percentinMarch.The FreedomandSolidarity(SaS) partyalsopolledslightly better,at 9.9percentin Marchcomparedto9.1 percentin February.

100 days of online public contracts

SLOVAKstate,regional andmunicipal governmentshave beenrequiredtopub-lishall theircontracts,paidinvoices andorders onlineforthe past100days.There-quirement,which tookeffectonJanuary1, wasdesignedto improvetransparency inhowpublicmoneyis spent

andhasbeen calleda show-case initiativeby thegov-ernmentandhas aidedthemediain reporting somequestionable spending atSlovakministriesand state-run companies.

Transparency watchdogshave calledthenew re-quirementsthe strongestanti-corruption measuretaken bythe currentgov-ernmentand havecomparedits possible effectson corruptpractices in Slovak politics tothe so-calledinfo-law thelawon publicaccessto in-formation passedin 2000 bythe firstgovernmentofMikul Dzurinda.

Sincethe lawcameintoeffectover 2,200contractshave beenpublishedon theCentralRegisterof Con-tracts,a websitewhere stateministries,their budgetary

organisationsand public-serviceinstitutionspublishtheircontracts,according toPeterBubla, the JusticeMinistrys spokesperson.Re-gionaland municipalauthor-itiesare required to publishcontractson theirown web-sites.Smallermunicipalities

without websites mustpub-

lish theircontractson thewebsite of theBusinessBul-letin,which hasso farposted720contracts.

Beginningon May1 atemporary directive becomeseffective whichrequiresmunicipaland regional au-thorities to publish onlycon-tractsover 1,000, whileothergovernmentinstitu-tionsmust publish contractsfor3,000 andmore.Thedir-ectivecamein response toperceived bureaucraticdiffi-culties causedby thenewre-quirement andwill remaininforceuntiltheJusticeMinistry proposes anamendmentto thepublicac-

cess toinformationlaw thatwillmake the publishingofcontractsand invoices easi-er, Bubla said.

Compiledby Spectatorstaff

Slovakia stung byOrbns constitution

THE EYES of much of Europeturned once again to Hungaryon April 18 when its parlia-ment passed an amendmentto the countrys constitution,dubbed as conservative, con-troversial and problematic bythe worlds media as well as

by the parliamentary opposi-tion to Hungarian Prime Min-ister Viktor Orbn. Slovakpoliticians also poured theirshareof cross-bordercriticismon the government and par-

liament dominatedby OrbnsFideszparty.The new constitution is

expected to be signed by Hun-garian president Pl Schmitton April 25 and will take effecton January 1, 2012. Criticshave levelled particular criti-cism at aspects of the consti-

tution they say will cementthe power of Fidesz beyond itscurrentterm in office.

Critics said they see sever-al problematic points in thenew constitution and one is

the change in the name of thecountry from the Republic ofHungary to just Hungary,

which they say is reminiscentof thepre-World WarI eraandaffects those countries that

were once part of GreaterHungary. The new constitu-tion will also widen the scopeof laws requiring two thirdssupport in parliament, whichobservers have labelled amethod through which Fideszcan stretch its power beyondits current election term. Theconstitution establishes theHungarian forint as the offi-cial state currency, meaningthat a switch to the euro inthe future would require aconstitutional amendment.

Extraterritorial effects?

According to statementsfrom Slovak government rep-

resentatives, the most prob-lematic part of the new con-stitution is the stated obliga-tion of the Hungarian gov-ernment to care for the mil-lions of ethnic Hungariansliving beyondits borders.

SeeLAWpg9

BYMICHAELA

TERENZANI

Spectator staff

SDK: NK was lined up to decideContinuedfrompg1

Radiov later added that she had in-sisted on transparency on behalf of theruling coalition.

When thestory firsterupted, Radiov

defended Mikulks actions, but laterturned against him, saying that he hadgiven her false informationaboutthe leas-ing deal. However, Miklo directly contra-dicted the prime ministers call forMikulk to resign by telling the media on

April 18 that the tax chief should remaininhisjob.

Ido not wanttobe a toolinanypowerstruggle, be it in relation to the oppositionor within the ruling coalition, Mikulk

wrote in a statement announcing hisresignation quoted by the SITA newswireon April 20. I do not want to get the fin-anceminister, whomI respectimmensely,and the prime minister into any conflictandthis iswhy I decided toquitmy job.

OnApril 19,Radiov,Mikloand SDK boss Mikul Dzurinda appeared to havereached a compromise: Radiov and

Miklo would respectthe resultsof an auditof the deal to be conducted by SlovakiasSupreme Audit Office (NK), which over-sees the use of public funds. Observerspromptlynotedthat sometimes it takes sixmonths orlongerfor theNKto produceanofficial opinion and that Radiov in theend had had to back away from her call forMikulk to resign. Analysts said they ex-pected Robert Fico and his Smer party, thelargest opposition group in parliament, tomakehay fromthesituation.

Undoubtedly, Ficowill vigorously usethis situation for his benefit, politicalscientist Miroslav Kus told The SlovakSpectator. He will continually remindRadiov of this situation while using any

weakness in the ruling coalition, whichunfortunately its parties keep displaying.

Fico said on April 19 that after Easter

his party will submit a proposal for a no-confidence motion in Radiov. He needs30 MPs to sign the proposal in order toforce Speaker of Parliament Richard Sulkto summon an unscheduled parliament-ary session.

TensionsintheSDK

The SDKs leadership met on themorning of April 19 to seek a solution tothestand-off.Laterin theday, Radiov,Miklo and Dzurinda withdrew to dis-

cuss thematter furtherin private. After an hour-and-a-half of talksthey agreed that the prime ministercould maintain her position thatMikulk should resign, but that she

would also respect the authority vestedin the finance minister. Dzurinda toldthemedia he didnot think that Mikulkremaining in his post would weaken theprimeministerin herposition.

The SDK backed the prime minis-ter and we fully respect all herstatements,Dzurinda said,as quotedbytheSmedaily.

Earlier on April 19, Miklo had saidthat he was aware of his responsibilityin dealing with the building lease deal

but added that as the responsible min-ister he alone would handle those re-sponsibilities and would not yield to

mediapressure.Miklo admitted that one of pos-

sible options was that the prime minis-ter would propose his own recall. Hestated that he had agreed withRadiov that until April 18 neither ofthem would release additional state-mentsaboutthe case.

According to Miklo, Radiov ex-plained the change in her position, andhersubsequentcall forMikulkto go,bysaying that those pressures increased.But Miklo said he did not agree thatministers shouldbend to suchpressures.

We should not be solving such is-sues based on pressures because that isthebeginningof theend,Miklo stated,asquotedby SITA.

Responding to speculation aboutthe eventual outcome of the crisis,

Miklo said that he is not interested inassumingthe primeministerschair.

Healsostatedthat heis not incon-flict with Radiov and that theiropinions differ only over this particu-larissue.

Miklo has insisted that Mikulkacted in the public interest when hesigned the contract earlier this year torent an office building in Koice fromNitra Invest, a firm co-ownedby Ondrejurka, the chairman of the SDK

branch in Nitra.It was not a government crisis,since it did not concern all the rulingparties, Kus told The Slovak Spectat-or. Of course the other parties were

verycarefully watchingand had certainconcerns.

Radiov early on presented a veryunambiguous stand, said Kus, addingthat it was within the financeministers remit to decide what wouldhappennext to Mikulk.

She is the prime minister, withmuchwider authorities thanthe minis-ter, and once she uttered such a standshe got into a position from which it

was rather difficult and unpleasant toconcede,said Kus.

The case, which has prompted sig-nificant tension within theruling coali-

tion, was brought to the medias atten-tion by Fico on April 11, when hepresented it as a story of partycronyism.

He alleged that some of the moneyfrom the deal would end up in theSDKs accounts, though he presentedno evidenceto backup thisclaim.

Mikulk immediately respondedthat the contract with Nitra Invest wascompletely in line with applicable lawsandwould savethe statemoney.

On April 15, Nitra Invest announcedthat it was withdrawing from the con-tract, stating that it did not want anyfurthersuspicionsto affect itsname.

Political observers noted that ques-tions of impropriety surrounding thecontracthaveput theSDK in anunfor-tunate position and have urged the

party toleaveno questions unanswered.Fair-Play Alliance, a political ethics

watchdog, earlier saidthat the bestwayto resolve thecontroversy wasto cancelthe contract and start the procurementprocessagain,with fulltransparency.

ForeignAffairsMinisterMikulDzurinda Photo:TASR

2 NEWSApril 25 May 1, 2011


3/12

Smile!Tourists are coming!

THE PREPARATIONS for theupcoming Ice Hockey WorldChampionshiphave nottrans-formed Bratislavainto a shinyE ur opean metropolisovernight. But tourism ex-perts still believe that the citycan appeal to the foreignguests who are expected tofloodthecityfortwoweeksifonly service providers, whohave something of a reputa-tion for being grumpy, treatthe hockey fans with honesty

andasmile.TheSlovakSpectatorspoketo Peter Belinsk, the generaldirector of the Slovak TouristBoard (SACR), about the PlayFairandDontForgettheSmilecampaigns. The first is basedon a code of ethics which pro-viders of tourist services cansign to declare they will treattheir customers honestly; thesecond is based on a kind ofgame in which restaurantsand other establishments aremarked with a sticker depict-ing a smiling forget-me-notflower which is intended toremind staff to keep smilingandbekindtotheircustomers.

The Slovak Spectator (TSS):What effects do you expect

thesecampaignstobring?Peter Belinsk (PB): The

aimof thetwocampaigns istoencouragethe biggest possiblenumber of serviceproviders to

be welcoming and homey, which would result in thenumber of satisfied visitors toSlovakia increasing. But theyshould also provoke debate onthis issue among experts. Asmile in the first place is asymbol, but it is also like a

boomerang. It returns to theservice provider when happycustomers come back again.Tourism is an experience forthevisitor,but thedaily breadof the entrepreneur. And both

should be left satisfied. Thetask of the forget-me-not is

therefore to remind themthat very often it doesnt takemuch to make tourists happy,just an increase in the will-ingnessofstaff.

TSS: Have service providersshown an interest in thecampaigns?

PB: As of today [April 19] we have 69 establishmentswho have signed the code ofethics through the municipaloffice in Bratislava. They will

be sent the forget-me-notstickers. In Koice the mayorsent a letterin whichhe calledon about 800 establishmentsto join the code of ethics and

the forget-me-not project. When the championship is

over, the forget-me-not initi-ative will be spread to otherSlovak towns and those whoare interested will be able toapply via a special website,

www.nezabudniusmev.sk.

TSS: Howwillyoumakesurethat foreign visitors under-stand what the symbol ofthecampaign means?

PB:Wewillinform foreigntourists with information fly-ers, posters in public trans-port, and through touroperat-ors. We will explain to themthesense ofthe campaignand

will tell them where to getsmall forget-me-not stickers

which they will then stick on

boards in the restaurants where they were happy withtheservice.

TSS: What other activitieswill SACR undertake duringtheChampionship?

PB: We will have 14 spe-cialised information stands inBratislava, Koice and Vienna.In this way we will promoteamong the fans the typicalSlovak tourist products anddestinations, such as healingspas, UNESCO monuments,castles, and others. There willalso be a media campaignpromoting Slovakias touristattractions during the cham-pionship, on Czech Television

and the Austrian radio stationArabella.

Don't forget to smile. Photo:Sme- GabrielKuchta

PAY: Trial versionbegan on April 18

Continuedfrompg1

On April18, 2011, PianoMedia,as theserviceis being

branded,launched thepay-wallas a trialservice. Theeyesof onlinepublishingex-perts worldwide willnow beon Slovakiaas Pianopreparestoswitch from trialstagetofull operationon May2. Fornow,the content thatparti-cipatingpublishers havemarked aspremium isstillfree toaccess andtheread-ersof nine Slovaknews

websitescan create usersaccountswhich willallowthemto continuebrowsingcontent behind thepaywall

withoutany charge foran-other weekafter thesystem

beginsfull operation.After that,however,

every registered userwillbeaskedto paya monthly feeof2.90to access contentmarked as premium.Altern-atively, users canpay 0.90

weeklyor 29annually.Ontheday thetrial ver-

sion oftheservicewaslaunched,34 serviceswereincluded,provided by ninemediaoutletswhichdecidedto charge fortheir premiumcontent via Piano.

TheSme dailywillchargeforaccessto theopinionsec-tion ofits website,theflash

versionof its printeditionwhich is availablefrom mid-nighteveryday, fullaccesstotheSmearchive, anda pack-

ageof premiumservicesfromthe motoringsitenatankuj.sk.Most interact-ivefeatures onthe Smeweb-site will also becoveredbythepaid-for Piano system.FromMay 2,postingmorethanthreecommentsa dayinonlinedebateson sme.sk,addingonline classifiedads,or extra serviceslikere-questingprofessionalmed-icalhelpfrom onlinedoctors

willrequire an up-to-datesubscription.

ThePravdaandHospodrske Noviny (HN)dailies willchargeto accesstheiropinionsections, andtoallowparticipation in online

debates on theirwebsites. Inaddition,HN will also putitsfullonlinearchivebehindthepaywall,but willnowmakeall its printedsupple-mentsand magazinesavail-ableonlineand promisestoprovidean ad-freeversionofits websiteto paying readers.

Theport dailywillalsoofferan ad-free version forPianosubscribers,as wellasearlyaccess toall itsart-icles,andfullaccessto itsarchivesand online debates.portis alsopromisingex-clusive staffarticlesfor pay-ingcustomers.

The Tdeweeklywillalso bead-free forthose who

pay, andwillgrantPianosubscribersearly accesstoallprint-editionarticles,full accessto itsvideo sec-tionand theopportunity topostcomments.

Private TV channel JOJissofar theonlySlovak broad-casterto take part intheproject,offeringan ad-free

versionof itswebsiteto Pianousers. In addition,themedialne.sk newsportal,

which covers themedia inSlovakia,is putting partof itscontent behind thepaywall,as isthe MeToo.skvideoportal. Thespecialisedmonthly magazinePC Revueis grantingpayingusers fullaccess to reviews andproductssections, fullaccesstoall articlesfromthe print

versionof themagazine, aswellas a flashversionof theprint edition.

TomBella,the chiefexecutiveof Pianoandfounderof theproject,be-lieves thatSlovakiais an

idealcountry to testthisworld-firstservice, sincethere arerelatively fewme-diaoutletsin themarketandthusa large proportionofthemcan be persuadedtoparticipate. Recent surveyshave also shownthattheSlovak internet-usingpopu-lationwouldbe willingtopaya monthly fee ofabout3in return forunlimitedac-cessto added-valuecontenton keySlovaknews sites.

Indeed,dozens of readerscontactedPiano on thefirstdaysafter theservicewaslaunched.The company saidmany ofthemwanted toknowwhether theywouldbe

ableto include thepaymentonthe invoicefromtheirin-ternet service provider.

Thisis what wewillhave todealwithas soon aspossibleafter thestart,BellatoldThe SlovakSpec-tator, addingthat interestinthe service hadexceededhis expectations.

Paradoxically,we aregettinga lotof e-mails fromretiredpeopleworriedabout

whetherthey willbe abletohandle thepaymenttechnically,Bella said.Somepeoplealso wrote tocriticisePiano forthreaten-ingfreedomof speech.

Weare tryingto explain

tothemthatit will bebetterforthem ifthere aremoremediaso they canselectfrom moresourcesof in-formation,ratherthan hav-ingeverything forfree which

would causesome mediatoquit,thereby making these-lection poorer,Bellasaid.

Butsome observersre-mainsceptical aboutthe tim-ingof a paywall fornews

websites,sincethey saypeopleare financiallyex-haustedin thecurrentpost-crisis period.

It'snecessary to sayaboutthe consumer beha-

viour of theSlovak popula-tion that itis sensitiveto

swingsin thepricesofgoodsand services,PavolKarszof thePrognosisIn-stitute of theSlovak

Academy of Sciences toldtheTASR newswire.

3NEWS April 25 May 1, 2011

ICE: Slovakia becomes 'Hockey Republic'Continuedfrompg1

The first faceoff will be on April 29and the competition will continue untilthe final championship match on May15. The venues are the wintersport stadi-ums in Bratislava and Koice but all theSlovak team's matches will be played inBratislava.

OrangeArena ready

Thewintersport stadiumin thecap-

ital city, now called the Bratislava Or-ange Arena, completed a major recon-structiononly a fewweeksago andnowcan accommodate 7,200 fans. The finalinspection papers authorising use ofthe stadium were recently signed bythe localauthorities.

Bratislava mayor Milan Ftniksymbolically handed over the keys tothe stadium to the organisers of thechampionshipon April11.

When we started with the recon-struction of the arena two years agothere were many voices of doubt, saidIgor Nemeek, the head of the Slovakorganisingcommittee.

The reconstruction began amid me-dia reports that it was overpriced andfollowing the change in government in2010 it was not clear whether the state

would ante up the remaining funds tofinish the work. Now, however, theBratislava Orange Arena has threerinks and an icemaker that organiserssayis thelargestin Europe.

Interestingly, the maintenance

manager of the stadium, Jozef Brezina,admitted to the Sme daily that there isone small talisman a coin under theice of the main rink where the Slovakteam will play all their matches and

where the championship game will beheld.

Securityissues

The championship will require verystrict and sophisticated security meas-ures. According to Interior Minister

Daniel Lipic, the Slovak police force isready for any security challenges thatmight arise. While visiting the stadiumrecently, the minister told the mediathatabout 200 police officershave passedspecialised traininggiven at thesite.

Around 650 police officers and 100police vehicles from other regions ofSlovakia will join the Bratislava andKoice forces during the championship.Police Corps President Jaroslav Spiiaksaid there will be about 700 police of-ficers on duty in Bratislava every day,and announced that Interpol and Euro-pol had also responded to his invitationand will have officers present in thecountry.

The staff of these agencies will haveall their databases with them, Spiiaksaid, as quoted by the Sme daily, stress-

ing that this will make it easier to detectsuspects and unwanted persons whomight seekto attendthe event.

We can identify every person whomight seem dangerous right at theirseat,Spiiak said.

Sprucingthings upforthe tourists

Criticism has mounted that foreignfans coming to Bratislava and Koicemight be less than impressed by theconditions in the cities when they ar-rive. Some minor transport improve-ments inBratislava,whichthe city said

were costing about 200,000, were be-ing completed on the eve of the cham-pionship. They includedreconstructionof tram tracks near the main railway

station and reconstruction of the un-derground pedestrian tunnel atTrnavsk Mto, near the Bratislava Or-angeArena.

The Bratislava city council, in co-operation with the city's five municipaldistricts, volunteers and students fromlocal schools, has also initiated a volun-teer effort to spruce up many publicareasin thecity.

In Koice, the city is preparing forthe influx of tourists mainly via trans-port and parking solutions, securitymeasures and information servicepoints. Additional cultural activities

willalsobe organisedin thecity.Mayor Richard Rai said that the

championship is a kind of dress re-hearsal for the citys forthcoming roleasEuropeanCapitalof Culturein 2013.

We have a keen interest in makingeverything work well so that the champi-onship also becomes the best invitationfor the events that will be a part of theKoice European Capital of Culture 2013project, Raitold The Slovak Spectator.

BYMICHAELA

TERENZANI

Spectatorstaff


4/12

SaS rejects support for ESM

FREEDOMand Solidarity

(SaS),one ofthe rulingco-alition parties, willnotsupportSlovakias particip-ationin theEuropeanSta-bility Mechanism(ESM) in aparliamentaryvote, partyleader Richard Sulktoldapressconferenceon April20,as quotedby theSITAnewswire.

Weare theonly parlia-mentary partywhichhas de-cidednotto bedrawn intofalsesolidarity,Sulksaid,asquotedby theSmedaily.Wehaventforgotten thatinthe firstplace wearehereforthe citizens of Slovakia,todefend theirinterests andnot theinterestsof foreign

banksthat havebeen earn-inghigh interestfrom loansfor irresponsiblecountriesforlong years.

TheESMisa toolde-

signed by theEuropeanUni-onto provide stabilityto theeuroby assistingmemberstateswith possibleloans iftheyencounter serious sov-ereign debtproblems.

Europeanleaders agreedtothe mechanismat a sum-mitin Marchand itnow re-quires approvalby nationalparliaments.

Itis nowquestionablewhether ESMcan winap-provalin theSlovakpar-liament, as without sup-portfromSaS thecoalitiongovernmentwill needtofindsupport among opposi-tion MPs.

Smer, thelargest oppos-

ition party,has notoffi-ciallystated itspositiononthe EuropeanStabilityMechanism.

Slovak banks passed stress tests

BANKSin Slovakiapassedthelateststress teststhattheNational Bankof Slovakia(NBS)carriedoutin thesecond halfof 2010.

Inprinciple, thestressteststhat weconducted con-firmedthefactthattheSlov-ak banking sector is stable,NBS supervision departmentheadVladimrDvoek tolda press conference on April

18,as quotedbythe SITAnewswire.In themacro-stresstest-

ingof Slovakiasfinancialsector, thecentralbank sim-ulated twoscenarios.

Thefirst foresawa negat-ivedevelopmentcausedbygrowingdoubts aboutthesustainability of thepublicfinances of selectedeurozonemembers,which would leadto increaseduncertaintyonfinancialmarketsand a drop

inforeigndemand asa resultof decliningeconomicgrowth.

Thesecondscenariowasbasedon rising inflationres-ulting fromexcessivegrowth in commoditypricesandloose monetarypolicy bytheFederalReservein theUnited States.

TheSlovakbankingsec-torremainedstableoverall

under bothscenarios, butthepotentialnegativeimpactofthesecondwasjudged tobestronger,said Dvoek.

Accordingto theresultsofthe tests,if thefirst scen-arioactuallytook place four

banks would findthemselveslosingmoney in2011and2012,while inthe eventofthesecond scenariosix

banks would report lossesduring thesame period,SITAreported.

Via Bona awards given out

ORIGINALprojectswithstrongstoriesbehindthem

were honouredat theViaBona2010 awards ceremonysponsoredby thePontisFoundationto recognisere-sponsibleand philanthropicbusinesses, accordingtoPetraNagyov, thefoundations PRmanager.

Spisk NovVes-basedcompany Embraco Slovakiascored twice: it receivedtheAward forLong-Term Posit-iveCorporateImpactfor itsproject to supportthe ma-ternity department at thelocalhospitalover12 years,andan honourablementionforits exemplary approachtocitizens during thefloodsthat hittheregionlastyear.

Wecancelled someshiftsand letemployees gohome andstaywiththeirfamiliesin thetoughsituation,NorbertBrathofEmbraco said,addingthat

employeeswerestill paidtheirnormalwages.

TheMain AwardforLargeCorporationswent toOrange Slovakiafor its com-prehensive approachto re-sponsiblebusiness, whiletheAward forSociallyRe-sponsible MarketOperations

wasawardedto TatraBanka.TheAward forRespons-

ibleApproach to Employeeswas granted toOrionNova, acompany whichemploys

young peoplewho havegrown up in orphanages, aproject which wasstartedtwoyears agoby theDutch

bossof thecompany,IwanHoffmans.

I couldntget moremo-tivated people,and Imafraid

I wouldntfindthemat thelabour office,Hoffmanssaid.


frompressreports

Partners inch towardsa revised Labour Code

THE TUG-OF-WAR over the fu-ture form of Slovakias labourlegislation is notover yet,eventhough Labour Minister JozefMihl expressed total satisfac-tion with the course of tripart-ite talks held on April 19

between the government, em-ployers andunions.

In late March, trade unionmembers took to the streetsarguing that the proposedchanges to Slovakias Labour

Code would result in a declinein the economic and socialstatus of employees. Employ-er association responded thatthey preferred negotiationsover street protests but alsocomplained that the draftproposed by the ministry

would not end what theycalled legislative barriers tojob creation.

After the latest tripartitenegotiations Mihl said thathe sensed satisfaction amongthesocialpartners. Butthe re-sponses of the unions andemployer associations indic-atethatthe ministermightbealonein hisimpressions.

Employers associated

within the National UnionofEmployers (RZ) expressfundamental disagreements

with yesterdays tripartite

[negotiations],stated the of-ficial release from one ofSlovakias employer associ-ations.

The RZ stated that em-ployers expectations hadnot been fulfilled and thatSlovakia has missed achance to fundamentallyimprove its business envir-onment as well as the situ-ationin the labour market.

Slovakias Federation ofEmployers Unions(AZZZ)also

said the talks did not meet itsexpectations because the La- bour Ministry failed to re-move from the draft the so-

called differentiated minim-um hourly wage, which

would vary based on the char-acteristics and demands of aparticular job.

The government says oneof its intentions in drafting arevised Labour Code is tomake the law more family-friendly, giving both employ-ers and employees the optionto work flexible hours basedon theirown particularneeds.

The TASRnewswire repor-

ted that changes were agreedat the April 19 meeting inmany areas, including proba-tionary periods for new em-

ployees, severance payments,holiday entitlements and no-tice periods. For most em-ployees, the probationaryperiod would remain un-changed at three months, buta probationary period as longas six months would be per-mitted for management staffif the amendment is ap-proved, TASRwrote.

The draft amendmentwould alsointroduceso-calledshared posts, making it pos-sible for an employer to divide

work usually designated asonly one job position betweentwo employees.

The code would also in-troduce a so-called competi-

tion clause which wouldpermit a company to sign acontract forbidding an em-ployee from doing the samekindof workwith a competit-or for a maximum period ofone year after separatingfromhisor heremployer.

The proposal would givean employer the option of ne-gotiating a combination ofseverance pay and a layoff no-tice period with an employeeandit wouldscrapthe currentobligation to provide employ-ees with both a notice periodandseverancepay.

The draft amendment would automatically entitleemployees who are aged 33

and older to 25 days of annualholiday.

SeeCODEpg9

LabourMinisterJozefMihl Photo:TASR

PRICE: 4-percent inflation predictedContinuedfrompg1

These factors, which have a pro-growth influence, are making us differ-ent from other economies and caused ajump in inflationat thebeginningof this

year.Nevertheless,the main reason forthe

growth in inflation is the rise in com-modity prices on world markets, whichhas affected prices in all economies in

thesame way,she added.The rapid growth of the prices offood commodities on world markets hasto a certain degree been included in theprices of goods, and in some cases thishasyet to happen,Sadovsksaid.

Meanwhile, World Bank PresidentRobert Zoellick warned in mid-April thatcurrentworld prices forfood productsare36 percent higher than at the same pointlast year. The overall price growth is also

being fuelled by turmoil in North Africaandthe Middle East.

Slovakiasnumbers

The cost of alcohol, tobacco and foodclimbed fastest in March, with annual-ised inflation accelerating from 3.3 per-cent in Februaryto 3.6percentin March,

as measured by the Slovak Statistics Of-fice,which usesnational methodology.As in previous months, the main

factor behind the speeding inflation wasthe growing prices of food and fuel,

which was in line with expectations,

saidEduard Hagara,seniorresearch ana-lystwithINGBank.

Hagara, however, noted that statist-icsalready showthatthe growthof theseprices is starting to affect other categor-ies of goods and services. He suggeststhat this could be a reflection of highercosts, but may also be down to thedelayed effect of the new-year rise in

valueaddedtax.Retailers had two difficult years

during which they had to deal with lowconsumer demand and cheap competi-tion from neighbouring countries,Hagara explained, adding that he ex-pects inflation will approach the4.0-percent level thisyear.

Sadovsk increased her predictionfor inflation in Slovakia, forecastingthatit will end up being around 3.8-3.9 per-centfor thewholeyear.

Sadovsk also said that she expectedinflation would breach the 4-percentlevel forseveralweeks.

We have already experienced thelargest jump, Sadovsk said, addingthat the most significant month-on-month growth, in January, is now be-hind Slovakia. We expect that month-on-month the prices of goods will con-tinue to grow by a couple of tenths of a

percent, similar to developments in Feb-ruary or March.Boris Fojtk, an analyst with Tatra

Banka, stressed that food-price inflationcontributes more than a third of the

wholeyear-on-yearincrease in prices.

Food products, along with beverages,are 7 percent more expensive when com-pared to last year, Fojtk said. Transporta-tion prices come second in the price-growth race, up 6.2 percent year-on-year.In third place come prices for education,rising 4.4 percent but Slovaks are, on av-erage, low spenders on education, accord-ingto Fojtk.

Since the development of inflation inthe eurozone is similar, the European

Central Bank (ECB) has started reducingtheexpansivenessof itsmonetary policies,and in order to slow down the develop-ment ofpricesit carried outitsfirst hike inthe basic interest rate in almost three

years, Fojtk said. In Slovakia, as in theeurozone, we expect inflation to peak inthe middle of the year, followed by a mod-erate slowdown in thegrowthof prices.

However, Fojtk added that otherfactors, such as natural disasters thatthreaten agricultural production, couldunderminethis scenario.

Andrej Arady, economist with VBBanka, noted that regulated prices recor-ded only 0.1-percent growth, similar toFebruary, and said their share of themonth-on-month growth in consumerpriceswas onlyminimal.

Within the core goods, the prices of

which arent regulated, food and fuel haverecorded the fastest growth, but comparedto last month the prices of alcohol and to-

bacco have also joined them, growing 1.5percent compared to the previous month,

Aradysaid.

4 BUSINESSApril 25 May 1, 2011

BYBEATABALOGOVSpectator staff


5/12

Len a len

I EMPHASISE that while Imfinance minister, it will beonly and only (len a len) theminister who makes person-nel decisions within thisdepartment, said IvanMiklo on Monday, in reac-tion to Prime Minister IvetaRadiovs demand that TaxDirectorate head MiroslavMikulk leavehis post.

Unfortunately, Miklo isnot the countrys only politi-cian with a big ego. And thatis one of the key reasons why

the government nearly col-lapsedthis week.

Miklo, who said in hisstatement that despiteRadiovs demand he seesno relevant reason forMikulks resignation,clearly wanted to show notonly that he will take no or-ders from Radiov, but alsothat his judgment is betterthan the prime ministers.

Not a usual attitude for a cab-

inetmember.On the other hand it was

unfortunate for Radiov todemand Mikulks resigna-tion while Miklo was enroute to the US and the twoof them had an agreementnot to comment on the issueuntil he was due to returntwodayslater.She explainedher sudden change of heart

by referring to growing

pressure, but it is hard toimagine what sort of pres-sure she had in mind whenall the relevant facts of thecase were known well beforeMiklos departure. And one

weekend of bad media cover-age really isnt that intoler-able. Unless you really cantstandnegativepublicity.

It is hard to guess what was going throughMikulks mind throughoutthe last couple of days. Buts tayi ng in offic e eventhough the head of govern-ment asks you to go requiresquitea bitof self-esteem.

SDK boss and formerprime minister Mikul

Dzurinda must be enjoying anew-found sense of import-ance, since he played a keyrole in negotiating a finalagreement.

Yes , t rans parenc y,policy, and conflicting polit-ical interests played a role inthescandaland itsoutcome.

But in no way was it len alen a matter of the two ofthem.

TaxDirectorateheadMiroslavMikulk resignedon April20. Photo:TASR

Weighing her wordsTHE HEADLINE and the leadparagraph of the story aboutthe boss of Slovakias TaxDirectorate, MiroslavMikulk, and the contro-

versial 6.6-million officeleasing deal that he ap-

proved for a firm co-ownedby a regional official of theruling Slovak DemocraticandChristian Union(SDK),changed dramatically in therun-up to Easter.

Finally, on April 20,journalists settled for atheme which might besummarised Mikulksh ead rolls ; Radi ovremains, with a note thatMikulks resignationcame after mounting ten-sion within the SDK andthe prospect that PrimeMinister Iveta Radiovm ig ht actua lly haveresigned if he had remainedin his job. Radiov con-

sidered Mikulks depar-ture the only way to erasethe suspicions of non-transparency hanging overher government.

On April 19, the localmedia was full of storiessuggesting some indirectlyand some quite straightfor-

wardly that Radiov wasnot strong enough to pushthrough her call forMikulks resignation. Onthat day, Radiov, FinanceMinister Ivan Miklo andSDKboss MikulDzurindaoffered a compromise whichsuited Miklo and Mikulk

but placed Radiov in a weakened position, appar-

ently unable even to pullstrings in her own SDKparty.

The trio announced that both Radiov and Miklowould respect the results ofan audit of the deal to be con-ducted by the countrys pub-lic finance watchdog, the Su-preme Audit Office (NK). Inthe context of Slovakpolitics,this approach would have al-lowed Mikulk to linger forseveral more months in hispost, waiting for media pres-sure to calm and, perhaps,thepublicto forget.

Radiov crossed a polit-ical line when she originally

backed the Tax Directoratedeal, despite it obviously fa-

vouring one of her SDK col-leagues, while party leader

Mikul Dzurinda defended itby asking: Should a memberof SDK be handicapped ordiscriminated against? Al-though Radiov argued thatshehad been giventhe wronginformation, she is the primeminister and the words of aprime minister can be decis-ive not just for ministers orthe whole government, but

for pub lic t rust in t hecountrys leadership.The publics ears have

grown used to fables aboutofficials who uncondition-ally act in the public interest even if this interest hap-pens to benefit friends andfamily, or means a politicalparty gets a euro or threericher but are unfairly tar-geted bythe media.

But when the govern-ment of Radiov paved its

wayto power with pledgestochampion transparency, thestakes in terms of public

trust were raised muchhigher. This is why disap-pointment at any hesitation

by the prime minister whenit comes to issues of cronyism or transparency

will always be sharper than

it would be with a Robert-Fico-type government.Predictably, Fico has

been hyperactive since hemanaged to drag the casecentre stage. He is now try-ing to talk up a parliament-aryvoteto oustRadiov.

None of this makes Ficosown period in power any lesstroubled. His reign has beenforeverinscribed in thepagesof Slovakias political historyas a time of dubious tenders,short-lived ministers, happycronies and even happierdonors. But being differentfrom the Fico government isno longer enough; nor is itenough to use more refined

rhetoric orsimplynotto haveJn Slota and his sidekicks aspolitical allies.

Radiov should prob-ably weigh her words andtheir timing more carefully,

because for a prime minister especially if she is believedto have political integrity itis more difficult to undotheir effect than it is for thetypical, chameleon-likepoliticians who change theirshape and colour as the situ-ationrequires.

The ruling coalitionknows that Radiov is stilltheir key to staying in power,and though her transparencytalk might be inconvenient

for those who need to find ways of channelling moneyinto friendly pockets theyknow Fico is breathing downtheir necks and will use anychance he gets to take backthe wheel. Perhaps Radiovshould have used this know-ledge from the very begin-ning ofthe taxbossstory. Notonly would it have spared themedia the trouble of chan-gingtheir leadsand headlines

with each twist and turn, butit would have better protec-tedwhatshe needsin order todefyFico: her integrity.

5OPINION

QUOTEOFTHEWEEK: ViktorOrbnis onehuge dictatorin thecentreof Europe,comparable withany dictatorin North Africa.

SNSvice-chairAndrejDanko commentson thenewly-passedHungarianconstitution

SLOVAKWORDOFTHEWEEK

EDITORIAL


BYLUKFILASpecial to the Spectator

April25 May 1,2011


6/12

Insurance fraudtrending higher

THE INSURANCE sector hasreported an upward trend infraudulent activities by poli-cyholders. Slovakias largestinsurer, Allianz-SlovenskPoisova reported an almostone-third increase in thenumber of claims examined

based on suspicions of fraudu-lent behaviour in 2010 com-pared to 2009. Other insur-ance companies reported sim-ilar experiences and insurerssaid that last years floods areparticularly behind the trendas many people attempted topurchase an insurance policyonly after their property had

been damaged.Last year 911 non-life in-

surance claims were ex-amined due to suspicion thatan insurance fraud wascommitted, an annual in-c re ase of 2 7 p er ce nt ,Jaroslava Zemanov, the

head of Allianz-SlovenskPoisova's department ofcontrol and special activities,

wrotein a pressrelease.In 2009 the insurer had

examined 716 suspicious in-surance claims, up 15 percentfromthe previous year.

We can see that thenumber of insurance fraudshas been continuouslyincreasing,she wrote.

In 2010 Allianz-SlovenskPoisova reviewed 494 sus-picious claims seeking adamage payment under acompulsory auto liability in-surance policy, 281 cases in-

volving property insuranceand 136 cases involving com-

prehensive auto insurance.The aggregate damages inthese reviewed claimsamounted to 5.9million.

SeeCLAIMSpg8

Some insurance companiesin Slovakia

Allianz-Slovensk Poisova, www.allianzsp.skAXA, www.axa.comGeneraliSlovensko Poisova, www.generali.skGroupamaPoisova, www.groupama.skINGivotnPoisova, www.ingpoistovna.sk

KomunlnaPoisova, Vienna InsuranceGroup,www.kpas.skKooperativaPoisova, Vienna InsuranceGroup,

www.kooperativa.skMetLifeAmslico, www.metlifeamslico.skPoisova SlovenskejSporitene, www.pslsp.skQBEInsurance (Europe)Limited, branch office forSlovakia, www.qbeeurope.com/slovakiaUnion Poisova, www.union.skUniqua Poisova, www.uniqua.sk

WstenrotPoisova, www.wuestenrot.skSource:Bookof Lists2010,SLASPO

Institutionsandassociations in the

insurance sector

Ministry of Finance, www.finance.gov.skMinister:IvanMiklo

Slovak InsuranceAssociation (SLASPO),- a professionalassociationof commercial insurancecompanies. A totalof 20 companiesheldlicencesto sellinsurancein Slovakiaas of December31, 2010.Of these, 12

were universalinsurance companies, fiveweresolely lifeinsurersand threewerenon-lifeinsurance companies.TheSlovakInsuranceAssociationrepresents 19insurancecompanies andthree branchesof foreigninsurance companies.President:Marek Jankovi

www.slaspo.sk

Slovak InsurersBureau (SKP)- thebureauis establishedby lawandadministers the

InsuranceGuarantee Fund,worksas an informationcentre, andrepresents Slovak insurersin internationalinstitutionsdealingwithliabilityinsurance.

www.skp.sk

Slovak Association of InsuranceMediators(SASP)www.samp.sk

TheAssociationof FinancialAgentsand Advisors(AFISP) www.afisp.sk

Flooding highlightedinsurance gaps

AFTER a decrease in premi-ums in 2009 the Slovak in-surance sector reported slightgrowth last year. Insurancecompanies hope that a grow-ing economy will bring themnew business and that theextensive floods that hitSlovakia in 2010 will promptmore property owners to in-sure their assets against ad-verse impacts from severe

weather and other risks.Based on preliminary

results, commercial insur-ance grew last year, with arise in premiums written ofroughly 2 percentage points

to 2.066 billion, accordingto the Slovak Insurance As-sociation (SLASPO).

The development of theinsurance market in Slov-akia in 2010 was within

SLASPOs expectations,Jozefna kov, t he

associations director gener-al, told The Slovak Spectat-or. The Slovak insurancemarket showed a generaltendency to stop contract-ing and even a mild revival.

Based on unaudited results,compared with the 4-per-

centage year-on-year declinein premiums written in2009, the sector reached2-percent growth in 2010.However, it is necessary tosay here that the basis for

comparison is the low levelfrom 2009.

According to SLASPO,premiums written in life in-surance grew by 6 percent

while non-life insurance re-ported a drop of 2.6 percent.

See RISKpg 8

BY JANALIPTKOVSpectator staff

Floodingin Slovakiawas oneof themainchallengesfor insurerslast year. Photo:Sme

Insurers await EU's Solvency II rules

THE SLOVAK insurance market is care-fully watching the unfolding of a newEuropean regulatoryframeworkknownas Solvency II. Though its aim is to en-sure that insurance and reinsurancepolicies underwritten by insurancecompanies are financially sound andcan withstand adverse events so thatpolicyholders are protected, some in-dustry experts are concerned that theadditional capital requirements maypush some popular insurance productsout of the market. Since the process ofpreparing the Solvency II rules is notcomplete, insurance firms in Slovakiaand other EU countries must still waituntil final documents are adopted and

then implemented to assess what im-pacts the new regulatory framework,whichnowhasatargetimplementationdate of January 1, 2013, rather than Oc-tober 31, 2012, might have on the insur-anceindustry.

TheSlovakSpectatorspoketoJozefnakov, the directorgeneralof the SlovakInsurance Association (SLASPO), about

whythe EuropeanCommission is prepar-ingSolvency IIand what itspotentialim-pactscouldbeinSlovakia.

The Slovak Spectator (TSS): What im-pacton theSlovakinsurancemarketdo

you expect from the new Solvency II

regulatory framework? Could its im-plementation affect the number of in-surance companies doing business inSlovakia?

Jozefna kov (J): Solvency II isa new legal and regulatory framework

for the European Unions insurancemarket that introduces more sophistic-ated and stricter rules in insurance,even when compared with the bankingsector. It changes requisitesfor the cap-ital requirements of insurance compan-ies, not only in terms of their amounts

butalso interms of their calculation andsetting. Capital has to correspond with

the risks that an insurance company isundertakingonthebasisofaninsurancepolicy but also to other risks to which itis exposed. Solvency II introduces fairmarket rules in insurance, which regu-lators and supervisory authorities act-ing in the insurance market would pur-sue. This means creation of a fair com-petitive environment in which under-capitalised firms with insufficientknow-how, unfair practicesthat harmaclient, and deformations of competition

which disadvantage other insurancecompanies in the market, and which intheend harm thewhole insurancemar-ket,donothaveaplaceinEurope.

Withregardsto itsimpact,SolvencyIIcould affect the number of insurancecompanies operating in Slovakia, espe-cially if planned implementing measures

requireinappropriately largecapital frominsurance companies. Thismight lead,forexample, to the transformation of someinsurance companiesintobranches.

SeeJpg9

Jozefnakov Photo:CourtesyofSLASPO

BYJANALIPTKOVSpectatorstaff

6

BUSINESS TRAVEL

IN SLOVAKIA

Next issue:BUSINESS FOCUS

INSURANCE

New regulatoryframework could have

far-ranging impacts

Slovak insurers

hope economicgrowthwill

boost sales

April25 May 1,2011

Popularityof insurance soldonlineand byphonerises

No insurance for damagedgraves and gravestones


7/12

MetLife Amslico opens newoffice

METLIFEAmslico,one of thebiggestlife insurancecom-panies in Slovakia,openedanewheadquartersin Bratis-lava inmid April.Morethan200peoplefrom threecom-panies (forlife insurance,funds andservices)willworkinthe newpremisesin theEuroveacomplexon theDanube embankment.

Theoffice willalsoserve

as a sub-regional centre forfourcountries incentralEurope (Slovakia, theCzechRepublic,HungaryandUkraine)with morethan 1.8million clients,the com-

pany wrotein its pressre-lease.

MetLife currentlyprovidesinsurance covertomorethan 450,000 house-holds in Slovakia.

MetLife Amslico,formerlyAmslicoAIG Life,ispartof MetLife,the largestlifeinsurance company intheUnited States. MetLifeacquiredAIG lastyear and

theAmslicoAIG LifebranchinSlovakiawaspartof thetransaction.


frompressreports

Entrepreneurs are underinsured

MOSTbusiness entities op-

erating inSlovakiado sowithout sufficient insurancecoverageaccordingto Alli-anz-Slovensk Poisova,

which estimatedthat only30percentof businesseshadadequatelevelsof insurancecoverage,the SITAnewswire

wrote in November.Theinsurerreported that

theaggregate number of in-suranceclaims caused bynatural disastersincreased

by severaltimes in 2010,amountingto about50,000claimsanddamagesof al-most40 million. Ofthese,only1,400 claims involved

businessinsurance. MojmrVedej, theheadofthe de-

partmentof corporateclientsat Allianz-SP, deducedthatthereweremuch higherdamages amongbusinesses

butthat thesepolicyholdersdidnot haveadequateinsur-ance coverage.

According toVedej,businesspeopleoftendo notrealisethe potential risks

theymight encounter.Small

entrepreneurs, made upmostlyof self-employed per-sons, areoftenmost unfa-miliar with thepotentialrisks.And Vedej noted thatmanyof theself-employedareformeremployeeswho

were forced bytheiremploy-er tostarta trade businessandcarryout thesameactiv-ities,with thesame risks as

before,butnowdo soas aself-employed person.Vedejemphasised thatit istheself-employed tradesperson

whonow bearsresponsibil-ity andwhoneedsto pur-chase aninsurance policyandfrom thisviewpoint Al-lianz-SlovenskPoisova

seesthisbusinesssegmentprimedfor growth.Allianz-SP stated thatit

hasalso noticedfraudulentbehaviour inthis segment ofitsbusiness andnoted thatithashad a success rate ofabout 60percentin uncover-ingfraud in suspiciousclaims.

Concerns about insuring state assets

A STATEMENT by theFin-ance Ministrythatit isnotnecessaryfor thestate tohavecommercialinsurancepoliciesover thelong termandthat somestate institu-

tionsand bodies should ter-minatetheirpolicieswasmetwith disagreementfrommanyof theseorganisations,theSITA newswirewrote inlate February.

Theministryprepared aproposalforwhatit called asystematicsolutionfor in-suring stateassetswithcommercialinsurancecom-panies, statingthat it prefersto retain thefunds currentlypaidfor insurancefor cover-ageof potentialdamages,re-commendingat thesametimethat someinsurancepoliciesbe terminated.

Theministryreportedthatduringthe lastfive years

thestate paid41.6 millioninpremiumsto insureitsas-setsbut reimbursed insur-anceclaimsamountedto

only5.2 million.TheSlovakInsuranceAs-

sociation(SLASPO)said thatitdoesnot agreewiththeministrysperceptionof theeffectivenessof insurance,

stating thatinsuringassetsisnotmeanttoactasanin-vestmentand it is impossibleto calculatean economicre-turnanalysisas theministryhaddone.

Notcoveringstateas-sets,with a valuereaching

billionsof euros, withcom-mercialinsuranceis a hazard

withpotentiallyheavy losseswhich especially threatenasa consequence of climatechanges,SLASPOwrote in astatement.

Amongthosestate bodiesdisagreeing withthe FinanceMinistrysproposal is theCultureMinistrywhichar-gued that thevalue ofsome

itemsof culturalheritageisincalculable.The MinistryofAgriculturealso statedit isagainst theproposal.

Popularity of onlineinsurance rises

FORGOTTEN to buy travel in-surance and have already left?No problem. All a forgetfultraveller has to do is pick upthe phone or go to the websiteof an insurance company of-

fering online insuranceproducts and buy one. Thisavoids the need to visit the of-ficesof an insurancecompanyand means insurance can bebought at any time of the dayor night. Insurance compan-ies see sales channels such asthis as having great potential,and plan to extend the scopeof the products they sell on-line and by phone much fur-ther. Travel, accident andcompulsory car liability in-surance are the most popularinsurance products currentlysold online or by phone inSlovakia. On the other hand,the law prohibits some insur-ance policies from being

agreed remotely, in particularthoseforlife insurance.For direct insurance, i.e.

contracts closed via the inter-net, a text message, or a tele-phone helpline, it is import-ant that the products aresimple, comprehensible forthe client and have an attract-ive price, Judita Smatanov,spokesperson for UnionPoisova, told The SlovakSpectator. Union Poisova,one of the pioneers in directinsurance in Slovakia, offers arange of direct insuranceproducts from car insurancethrough travel insurance toaccident insurance. The cli-entcan choosea policy accord-

ing to his or her needs, buy itaroun d the c lock and ,moreover, obtain attractivediscounts.

Generali Slovensko, an-other insurance company,sees non-life insurance suchas compulsory car liabilityinsurance, household insur-ance or travel insurance asappropriate for sale online orbyphone.

On the other hand, it isimpossible to buy life insur-ance via the internet, Zuz-ana Hlivkov, GeneraliSlovenskos spokesperson,explained to The SlovakSpectator. The laws that pro-hibit online sale of life insur-

ance comprise regulationsunder the Insurance Act, theAct on Protection of PersonalData and the Act on Legalisa-tion of Incomes from Crimeand the Fight Against Organ-

ised Crime. These acts to-gether create various dutiesfor insurance companies

which mean that clientsneed to sign life insurancepolicies inperson.

Among the products that

insurance companies in Slov-akia offer online or over thephone are travel insurance,insurance to mountain hikersto cover the cost of rescue inthe event of an emergency,household insurance, build-ing insurance, liability insur-ance, liability insurance of anemployee when carrying outhis or her job [to cover dam-ages caused to the employer],compulsory car liability in-surance as well as compre-hensivecar insurance.

Allianz-SlovenskPoisova as well as UnionPoisova report that travelinsurance is their most popu-lar online product. The latter

also reports sound resultsfrom its online compulsorycar liability insurance servicelaunchedin 2009.

In 2010, as many as 35 per-cent of all Union Poisovaclients bought travel insur-ance policies via the internet.These accounted for 28 per-cent of the firms aggregatepremiums. In terms of com-pulsory car liability insur-ance, one in every ten policies

wasagreedonline.Allianz-Slovensk Poisov

a reportsthat currentlymorethan 30 percent of its onlineclients are young people up toage 30. Compared with 2010thisrepresentedan increaseof

over one half. Young peopleuse the internet to buy travelinsurance in particular, a re-flection of their interest intravelling abroad, the com-pany wrote in a press release.

Apart from travel insurance, young people are also inter-ested in liability insurance,

where they make upalmost 45per ce nt of c ustome rs.

Union Poisovas posit-ive approach to the internet

as a potential sales channelwas confirmed by its launchof online accident insuranceearlier this year. Over thenext fewweeksthe company

will also allow clients to buycomprehensive car insur-ance online too, and in thesecond half of 2011 it plans tolaunch online insurance offamily houses, apartmentsandhouseholdgoods.

Union Poisova is alsodeveloping text messaging(SMS) as a sales channel. Itstarted to sell selected insur-ance products via SMS in2007, the first insurer inSlovakiato doso.

A[nother] novelty is the

first accident insurance viaSMS, which we launched inmid April, said Smatanov,adding that clients can buyaccident insurance for riskygroupsof tourists and sports.Union plans to further de-

velop insurance via SMS. Itsays it will boost the range ofinsurance products it sells

via this distribution channelas well as improve the ease

with which SMS purchasescanbe made.

Allianz-Slovensk Poisovais also extendingitsrange ofonline insurance products.

With regards to peoplesincreasing interest in the in-ternet we are developing oth-

er products, both simple andmore complicated, LuciaMuthov, spokesperson of Al-lianz-Slovensk Poisova,told The Slovak Spectator.More products may be put

online as early as this year. Also via the distributionchannels of the internet andthe phone we are trying to of-fer clients a more extensiveportfolio ofour products.

Onlineis for'modern'clients

That the internet and thetelephone are attractive en-

vironments for the sale of in-surance products has beenproved by the arrival of thefirst insurer on the Slovakmarket to sell its productssolely via the internet and byphone. The company, Gener-tel,entered theSlovakmarketin October 2010, the SITA

newswirereported.In theinitial stage, Gener-telhas focused oncompulsorycar liability insurance, but itplans to gradually add othernon-life insurance productsto its portfolio, for instanceaccidentor travelinsurance.

Genertel is a subsidiary ofthe Hungarian firm GenertelBiztost a member of theGenerali group which con-trols Generali Slovenskot hr ough P PF Ho lding .However,Genertel isdevelop-ingits activities onthe Slovakmarket independently ofGenerali Slovensko, accord-ingto SITA.

The new market player

says it intends to addressmodernclients.The car liability insur-

ance market shows potentialamong those clients open tonew technologies, and whodo not need personal contact

when selecting the most ad- vantageous products, saidMiroslav Chovan, director oftheSlovakarm of GenertelIn-surance,as quotedby SITA.

By the end of 2010 the in-surer had sold over 5,000 carliabilityinsurancepolicies.

We are pleased with thenumber of clients, said PetarDobric, a memberof the boardof directors of Genertel, asquoted by SITA in mid Janu-

ary. The results of our sur- veys, showing that Slovaksare not afraid to prefer newsales forms over traditionalmeans,werethus confirmed.

According to a surveyconducted by Media Researchfor Genertel, more than 23percent of Slovak drivers

would use an online insurerto buy compulsory car liabil-ity insurance. The survey alsoshowed that even thoughSlovaksare interested inqual-ityof service,priceis themostdecisive factor, Doprava a Lo-gistikamagazine wrote.

Based on results in Slov-akia to date, Dobric regardstheprojectasvery successful.

We are an insurer for re-sponsible drivers who do notcausecar accidentsand do notdrive expensive cars, he said.To these people we can offerreallyreasonable prices.

BY JANALIPTKOVSpectator staff

Travellersliketo purchaseinsuranceonline. Photo:TK

7BUSINESS FOCUS

FOCUSshorts

But not allinsurance

products can be

boughtonlineor

over the phone

April 25 May 1, 2011


8/12

No insurance for gravestones

THERECENTstrongwindsthat hittheHighTatrasinthefirst half ofAprildam-agedmore thanforestsandroofs.A cemeteryin thetown ofVysok Tatryhadmorethan 60 gravestonesdamagedor completelydes-troyed, theSme dailywrote.

Manypeoplewhose relat-ives areburiedin thecemeteryare in despair be-causethey haveno insur-anceand townofficials said

itsfunds areneeded torepairmunicipal property.Noneof threelargest in-

surancecompaniesin Slov-akiaofferinsuranceforgraves or gravestones.

Wehad thisproductseveralyears ago,LuciaMuthov,spokespersonof

Allianz-SlovenskPoisova,toldthe daily. "Butbecausetheprice seemedto betoohighpeoplestoppedbeinginterested init. Nowwedonotinsure graves andgravestones.

GeneraliSlovensko doesnotoffer insuranceon gravesandgravestoneseither.

After theirrecent experi-

ences, somepeoplenow ap-pearmore interestedin in-surancefor gravestones.


frompress reports

CLAIMS: Firmssay fraud is up

Continuedfrompg6

Last year Generali Slov-ensko uncovered what it

called 8,940 fraudulent at-tempts to claim damages ex-ceeding 4 million, the in-surer wrote in its press re-lease. Compared to 2009 this

was an increase of 35.3 per-cent. Generali Slovensko

wrotethatit continued toseethe highest likelihood offraudulent behaviour in itsauto insurance business andin Bratislava Region, report-ing that policyholders triedmost often to fraudulentlyreceive excess reimburse-ment based on fictitiousdamages which didnot occuras claimed by the policyhold-ers. The next most commonfraud was an attempt to in-

crease the amount of dam-ages to be recovered. Thethird most common fraudu-lent acts involved concealingfacts or giving false informa-tion when policyholdersfailed to report, for example,consumption of alcohol oranother violationof law.

Generali Slovenskoprovided the example of apolicyholder who purchaseda 33,000 insurance policyfor a wooden shed in a Romasettlementand thendeclaredflood damage to a cellar eventhough there wasno cellar.

Generali Slovensko wrotethat it is continuing to im-prove its mechanisms to un-

cover frauds and it reportedits success in uncoveringfraudulent acts as exceeding70 percent of the examinedsuspicious cases.

Floodsbroughtmorefraud

If we look at the trendswe see in this segment, wecan say that the floods andextensive rains in 2010 indir-ectly affected insurancefraud,Zemanovstated.

Lucia Muthov, spokes-person of Allianz-SlovenskPoisova, gave as an ex-ample a claim presented by a

policyholder for damage to afamily house. Total damagesto the household caused bythe rain were claimed as3,000. Butfurtherexamina-tion by the insurer revealedthat the roof was under ex-tensive reconstruction dur-ing the rain and that asmuch as four fifths of theroof was covered only with aplastic sheet.

The damage of thehousehold was caused by theinsufficient [roof] coveringand thus the claim wasturned down, saidMuthov.

On the oth er h and,people living in regions en-dangered by floods have re-

ported problemsin obtainingfloodinsurance policies.Insurance companies

have mapped out the situ-ation very well and when in-suring houses in the villagethey are very careful, saidJozef Adamkovi, the mayorof Sady nad Torysou village,

which was hit by floods sev-eral times last year, as cited

by the Pravda daily in midFebruary. They [insurers]either do not want to sign aninsurance policy with thepeople or they ask for suchhigh premiums that insur-ance does notpayoff.

People arenot covered fordamages to automobiles in

all circumstances andMuthov explained that autoinsurance does not cover

vehicles that are wilfully seton fire.

Deliberate ignition of avehicle is excluded from caraccident insurance, saidMuthov, adding that an in-surer pays damages only forcars that are secondarilydamagedby thetorchedcar.


frompress reports

RISK: New EU ruleswill impact insurers

Continuedfrompg6

Premiums in compulsorycar liability insurance re-mained almost unchanged,decreasingby0.5percent.

Other segments of car in-surance reported an aggregateannualdeclineof6percent.

kov pointed to the up-ward trend in life insurance,with new business in this

segment growing by 9.7 per-cent. The share of life insur-ance premiums written in-creased from 52.36 percent to54.50 percent of aggregatewrittenpremiums.

In the segment of non-lifeinsurance kov detects as

behind thefall, thenow fadingeconomic and financial crisis,whoseactualaswellaspsycho-logical consequences for non-lifeinsurance,especiallyinthe

business sector, persistedlonger than in the case of lifeinsurance.Inthecaseofcarac-cidentinsurance,thesituationwas affected by relatively lowprices fornewvehiclesandthepredominance in terms ofsales of used cars over newvehicles. These factors de-

pressed prices and forced carowners to consider whethertoseek car accident insurance,accordingtokov.

Allianz-SlovenskPoisova, the biggest insur-

ance company in Slovakia, re-ported an annual 1.3-percentdrop in premiums to 520.79million in 2010, according totheSITAnewswire.

Our results for last yearwere affected by floods andheavy rains, companyspokesperson Lucia Muthovtold The Slovak Spectator. In2010wepaidoutabout36mil-lion to clients hit by adverseweather, and the number ofclaimsexceeded50,000.

Insurance companieswithin the Vienna InsuranceGroup in Slovakia, i.e. Koop-erativa, KomunlnaPoisova and Poisova Slov-enskej Sporitene, reported an

aggregate increase in premi-ums of 3.2 percent, to 659million. Generali Slovenskoreported a drop in premiumsof 4.3 percent, to 195.5 mil-lion,according to SITA.

Generali Slovensko said itperformed well in the non-lifeand property insurance seg-ments, for example house-hold insurance.

This is also linked to thefloods, which have causedSlovakia the biggest damageof the last 20 years in terms ofthe extent of insurancepayments, Vladimr Bezdk,director general of GeneraliSlovensko, told The SlovakSpectator. Generali Slov-

ensko paid out damages ex-ceeding7.52 million.On the other hand, last

years floods and the damagethey caused led more peopleto seekinsurance.

Based on a marketingsurvey conducted among cli-ents of our insurance com-pany, news about floods anddamaged houses led manypeople to realise the need toinsure their assets or reviewexisting policies, saidBezdk. The statistics reflectthis trend. In 2010, 56 percentof clients of Generali Slov-ensko added more coverage toexisting insurance policiescovering real estate house-hold contents. In the segmentof insurance of property i.e.real estate and household Generali Slovensko reported a28 percent annual increase innewbusiness.

Expectationsfor 2011

Based on continuing eco-nomic growth and the expec-ted further revival of key in-dustrial segments, SLASPO ishoping the insurance market

will continue growing.kov sees prospects forgrowth in property insuranceas wellas lifeinsurance.

Last years natural dis-asters, which caused estim-ated damage exceeding 500million, should be a warningfor all owners of real estate,said kov. Disasters alsohit regions where suchevents have never been ex-

pected and thus nowadaysnobody can be sure.According to kov, the

experience of many peoplewho suffered damage is thatcompensation from sources

other than insurance com-panies, if they even get them,is too little to replace dam-aged or destroyed assets. Thusshe sees insurance as one ofthe few effective solutions.She advises that it is import-ant not only to insure real es-tate, but also to re-assess

whether the insured sumcovered by existing policies isin line with current pricelevels, and whether all risksare covered. If not, thepolicies need updating, she

suggested.Insurance companies seespace for further growth inlife as well as non-life insur-ancein Slovakia.

Insurance has growthprospects in the Slovakmarket, said Bezdk of Gen-erali Slovensko. This isproven by indicators such asthe volume of premiums

versus GDP,which in Slovakiais several times lower than in

western EU countries. Thusgrowth is possible in spite oftheeconomicdecline.

Generali Slovensko ex-pects that the negative devel-opment of the last few years

will continue this year in car

insurance. On the other hand,interest is rising in propertyinsurance. Bezdk also ex-pects higher interest to resultin lower prices. In life insur-ance he expects a moderateacceleration in spite of theeconomic decline, whose ef-fects arenow fading.

NewEU legislation

Insurance companies are waiting to see what effectnew EU legislation will haveon their operations. Allianz-SlovenskPoisovaas wellasGenerali Slovensko, eventhough they well-placed asthe biggest firms on the local

market, point out that im-plementation of the newEuropean regulatory frame-

work known as Solvency IIwill be demanding in terms ofcapacity andIT technologies.

Already the EU market isreporting a lack of experts,especially actuaries and ac-turial risk managers, saidBezdk, adding that the im-pact on clients might bedouble-edged since thechanges could mean thatlong-term products contain-ing options and guarantees

become more expensive, while at the same time theprobability of insurance com-panies getting into financialdifficulties and thus endan-

gering customersis reduced.For the insurance marketthis may mean a wave of mer-gers and acquisitions and cap-ital requirements whichcause some insurance com-panies to be transformed into

branch operations.In the view of Allianz-

Slovensk Poisova the newregulation is a big interven-tion in the functioning of theinsurance market and mighthave a negative short-termimpact on the whole sector,accordingto Muthov.

Insurancecompanies alsodescribe as unfortunate aruling by the European Courtof Justice that means in-

surers will be not able tocharge different premiumsfor men and women. Thechange may come into effectin December2012.

SLASPO voiced deep con-cern over the rulingin a pressrelease on the issue. It poin-ted out that gender is a legit-imate factor when settingpremiums and insurancepayments. SLASPO will con-tribute to an analysis of theeffects of theruling on clientsand insurance companies

which the CEA European in-surance and reinsurance fed-erationis to prepare.

The creation of prices ininsurance is based on the fair

setting of risk. ... Excludingone of the basic risk factorsgoes against the very basis ofthe insurance business andinsurance coverage of theclient,the associationwrote.

Recent natural disastershavespurredinterestin propertyinsurance. Photo:Sme - JnKrolk

8 BUSINESS FOCUSApril 25 May 1, 2011

FOCUSshort

Lastyears natural

disasters,which caused

estimateddamage

exceeding500 million,

shouldbe a warningfor

allownersof realestate.

Jozefnakov


9/12

CODE: Employers see no victorsContinuedfrompg4

Employees who haveworked for a company for atleast one year but less thanfive years would continue tohavethe current notice period

of at least two months. Em-ployees who have worked fora company at least five yearsbut less than 10 years wouldbe entitled to at least a three-month notice period; thosewith 10 but less than 20 yearsof service would receive atleast a four-month noticeperiod; and those with 20 ormore years of employmentwould have a five-month no-tice period, the SITA news-wire reported.

Clashon bargaining

Disagreements, however,were reported concerning thepossibility of negotiating

longer notice periods in a col-lectiveagreement.

We propose and insistthat within collective bar-gaining it would be possibleto extend the standard noticeperiod by three months at

most, Mihl stated, asquotedby SITA.Mihl was reported to

have yielded ground on theministrysinitialideas on howto define dependent work un-der the law and apparentlyalso withdrew his idea to ad-just the dates of some stateholidays so that they fall adja-centtoweekends.

The Sme daily reportedthat the minister also agreednot to change the rules thatcurrently require employersto provide food vouchers toemployees and had scrappedtheideaof permittingthe pos-sibility for notices to betransmitted electronically.

RZ stated that it partic-ularly disagrees with theministrys ideas on the no-tice period, arguing that therecently proposed changesto the payroll tax systemwould require payroll levies

to also be paid on severancepay and that this approach will significantly increaselayoff-related costs by asmuch as 35.2 percent, whichaccording to RZ would res-ult in less incentive to hirenewemployees.

At the same time RZstated its opinion that theproposed changes to the La-

bour Code under discussiondo not justify the protest ac-tions that have been organ-isedbythe unions.

The current dialogueovertheLabourCodedoes nothave any victors but unam-

biguously has its losers: theunemployed in Slovakia,

said Jozef pirko, the vice-president of RZ.

AZZZ added that employ-ers have thus far failed intheir attempt to remove therequirement that employersrequest approval fromthe dis-

trict labour and social affairsofficewhentheyplantolayoffa physically-impairedperson.

AZZZ also said it disagreed with the proposal that em-ployees who have worked 20

years or more for a companyshould be entitled to a five-month notice period, saying afour-month notice period

wouldsuffice, SITAreported.Miroslav Gazdk, the pres-

ident of Slovakias Confedera-tion of Trade Unions (KOZ),said the unionists are plan-ninganotherseries of proteststo be held on May 1 as well ason the opening day of the IceHockey WorldChampionship,Sme reported.

LAW: Slovak MPs,ministers respond

Continuedfrompg2

Slovak Foreign MinisterMikul Dzurinda, from the

Slovak Democraticand Chris-tian Union (SDK), held apress conference on the daythe Hungarian parliamentpassed the new constitutionand assured the media thatSlovakia's authorities re-mained actively engaged onthe issue.

Dzurinda said Slovakiaopposes the concept in thenew constitution that cre-ates collective rights forethnic Hungarians outsidethe country. He added thathe would not like the focusof this topic to be diluted bydiscussion of other aspectsof the constitution thatalso have been called prob-

lematic.Dzurinda stated he wantsto make sure that only thelaws of the Slovak Republicare validin Slovakia.

He added that the For-eign Affairs Ministry has

been in touch with Knut Vol-lebaek, the High Commis-sioner for National Minorit-ies of the Organisation forSecurity and Co-operation inEurope (OSCE). Dzurinda alsosaid he is trying to arrange ameeting with his Hungariancounterpart, Jnos Mar-tonyi,in Slovakia.

Slovakpoliticiansraisetheireyebrows

The Freedom and Solidar-ity (SaS) party and the Chris-tian Democratic Movement(KDH), both members of theruling coalition, declared

that the stated constitutionalresponsibility of the Hun-gariangovernmentfor ethnicHungarians living beyond its

borders, including the estim-ated 500,000 living in Slov-akia, along with support fortheir collective self-govern-ment and the possibility that

voting rights will be exten-ded to ethnic Hungarians liv-ing outside Hungary, are theconstitutional changes theyconsider mostproblematic.

SaS also objected thatOrbn had acted unilaterallyin pushing the constitu-tional changes forward andsaid it believes this was notin accordance with bilateraltreaties signed by Hungaryand Slovakia.

Bla Bugr of Most-Hdhad the most moderate reac-

tion, saying Slovakia should wait and see how Hungaryuses the new constitutionalpowersin practice.

I dont think we shouldreact to everything, Bugrsaid, as quoted by the TASRnewswire, adding that it isHungarys constitution, notSlovakias.

Opposition Smer party, which led Slovakias previ-ous, nationalist-orientedgovernment, reacted moreharshly, stating that Hun-gary might have revisionisttendencies and called on allSlovak politicians to actjointly tobuilda barrierthat

would respond to some art-

icles of the Hungarianconstitution.I do not rule out that it

will be necessary to pass anamendment to the Slovakconstitution, for which weneed to prepare well, discussit and gain very broad agree-ment of all Slovak politicalparties, Smer leader RobertFico said, as quoted by theSITA newswire. Fico addedthat if the Hungarian consti-tution poses an absolute at-tack against the territorialintegrity [of Slovakia], thenthe Slovak constitutionshould have responsive lan-guage about Slovakias territ-orialintegrity.

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FOR MORE INFORMATION:email:[email protected]: +421 2 59 233-311fax: +421 2 59 233-319or write:The Slovak Spectator, Lazaretsk 12811 08 Bratislava, Slovakia.

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ViktorOrbn Photo:Reuters

J: Some products could vanishContinuedfrompg6

TSS: What influence do you expectSolvency II might have on insuranceproducts and their prices? Whichproducts might the new regulatoryframework impact the most?

J: It is too early to precisely quanti-fy additional costs that insurance com-panies will have in relation to SolvencyII because the final form of the EUs legalnorms, which will affect these costs, willbe known only in the autumn of thisyear. But already it is possible to say thatif European regulators, within the pre-

paration of implementing measures, fur-ther increase capital requirements of in-surance companies at odds with the ori-ginal objective of Solvency II, we can ex-pect a partial withdrawal of insurancecompanies from selling some products ora hike in insurance premiums.

TSS: What advantages will Solvency IIbring to insurance companies clients?

J: The principle based in the EU dir-ective called Solvency II aims to tightenregulation of insurance companies in or-der to protect the client (the consumer)from troubles that an insolvent insur-ance company might cause. Thus, it isnecessary on one hand to stress that thenew regulatory framework would bringcomfort to clients of insurance compan-ies by making the insurance market

more transparent, and this will probablypertain to insurance products too.

On the other hand, it may happenthat some popular insurance productscould disappear from the market becausethey would become uneconomic for theinsurance companies.

TSS: How are Slovak insurance com-panies advancing in their preparationsfor eventual implementation ofSolvencyII?

J: Slovak insurance companies, with few exceptions, are daughtercompanies of large insurance and fin-

ancial houses. Such firms have qualifiedteams of experts, including staff fromSlovak companies, dealing withSolvency II. These teams are preparingfor implementation of Solvency II forall units of a company.

SLASPO is intensively participatingin preparations, too. We launched a

working group of experts from SLASPOsmember insurance companies that deals

with methodology of application, fore-seeing various effects, evaluation of im-plementation proposals and so on. Itelaborates remarks and comments whichare then sent to the CEA, the Europeaninsurance and reinsurance federationmade up of national associations of in-surance companies, in Brussels whichthen tries to affect the creation of normsin the European bodies.

TSS: Last year you voiced a concernabout some of the ECs planned im-plementation measures and its tend-ency to further tighten rules for in-surers and require additional capitalrequirements because of the economiccrisis. Wereyour concerns warranted?

J: Our concerns have been partlyconfirmed because the implementingmeasures have really tightened the ori-ginal objectives of the directive. On theother hand, it is necessary to say thatsome sharp edges have been smoothenedand compromises have been reached inmany areas.

But the legislative process is still go-ing on while the definitive approval ofthe large amendment to the directivecalled Omnibus II is expected in a shortperiod of time.

The implementing measures, which will bear the name delegated acts arealso in the completion phase.

Thus, the insurance companies arenow under great pressure because thechanges they will have to carry out arehuge in themselves and the degree ofuncertainty stem

slovak spectator 17 16

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