Slovakia and the institutional future of the EU

1. How does the future of the EU after the Irish ‘No’ look like?

 

In recent months in Slo­va­kia there has been very lit­tle dis­cus­sion on the fate of the Lis­bon Treaty. Since the neg­a­tive result of the Irish ref­er­en­dum, Slovakia’s politi­cians have repeat­ed­ly empha­sised that the future of the Lis­bon Treaty was in the hands of the Irish politi­cians. In expert cir­cles there have been sev­er­al pub­lic events in which the abil­i­ty of Czech politi­cians to rat­i­fy the Lis­bon Treaty while the Czech Repub­lic holds the EU-pres­i­den­cy in the first half of 2009 was ques­tioned. How­ev­er, on the whole debates on the Lis­bon Treaty specif­i­cal­ly and the insti­tu­tion­al archi­tec­ture of the EU more broad­ly have been over­tak­en by the deep­en­ing finan­cial crisis.

Prepa­ra­tions for elec­tions to the Euro­pean Par­lia­ment have so far been over­shad­owed by Slovakia’s direct pres­i­den­tial elec­tion whose first round is sched­uled to take place on 21 March 2009. Slovakia’s elec­tions to the Euro­pean Par­lia­ment will take place on Sat­ur­day 6 June 2009. In the pre­vi­ous elec­tions to the Euro­pean Par­lia­ment in 2004 Slo­va­kia record­ed the low­est turnout of eli­gi­ble vot­ers in all EU mem­ber states when only 16.9 per­cent of vot­ers took part in those elec­tions. Hence, this year there is a gen­er­al expec­ta­tion that the turnout should be high­er. So far, pub­lic opin­ion polls sug­gest a low turnout again. Accord­ing to a Euro­barom­e­ter sur­vey con­duct­ed in the fall of 2008, only 15 per­cent of Slovakia’s vot­ers (com­pared with the EU-27 aver­age of 28 per­cent) said that they would def­i­nite­ly take part in the Euro­pean elections.[1]

Accord­ing to Slovakia’s law on elec­tions to the Euro­pean Parliament[2], polit­i­cal par­ties have to reg­is­ter their can­di­date lists at the very lat­est 65 days pri­or to the date of elec­tions to the Euro­pean Par­lia­ment. Since Slovakia’s elec­tions to the Euro­pean Par­lia­ment are sched­uled for 6 June 2009, can­di­date lists will have to be reg­is­tered by 2 April 2009. By the mid­dle of March 2009, most rel­e­vant polit­i­cal par­ties in Slo­va­kia have com­plet­ed their can­di­date lists with the excep­tion of the largest gov­ern­ing par­ty, the Social Democrats,[3] and one of their junior coali­tion part­ners the People’s Par­ty – Move­ment for a Demo­c­ra­t­ic Slovakia.[4] Slovakia’s polit­i­cal par­ties will com­pete for 13 seats in the upcom­ing Euro­pean elec­tions. The selec­tion of can­di­dates by most par­lia­men­tary par­ties for rel­e­vant posi­tions on a par­ty list (places 1–3 on the list) is cen­tralised on the nation­al lev­el. Region­al bod­ies in polit­i­cal par­ties also nom­i­nate can­di­dates but these are rel­e­vant main­ly in the case of the main oppo­si­tion par­ty the Slo­vak Demo­c­ra­t­ic and Chris­t­ian Union – Demo­c­ra­t­ic Party[5] because of its sys­tem of pri­maries in select­ing the party’s can­di­dates for the Euro­pean Par­lia­ment. Gen­er­al­ly, can­di­dates select­ed by region­al struc­tures of polit­i­cal par­ties end up on une­lec­table posi­tions on par­ty lists. Polit­i­cal par­ties cur­rent­ly present in the Euro­pean Par­lia­ment decid­ed to nom­i­nate most of their cur­rent MEPs again because of their expe­ri­ence and estab­lished con­tacts. Young can­di­dates are reach­ing low­er posi­tions on can­di­date lists where­by young can­di­dates should gain expe­ri­ence join­ing the elec­tion campaign.

Elec­tions to the Euro­pean Par­lia­ment are clear­ly sec­ond order elec­tions in Slo­va­kia, they are still like­ly to have some test­ing rel­e­vance for domes­tic pol­i­tics in Slo­va­kia as the dom­i­nant gov­ern­ing par­ty, SMER-SD, con­tin­ues to be very pop­u­lar. Accord­ing to a recent opin­ion poll, if par­lia­men­tary elec­tions were held in Feb­ru­ary 2009, SMER-SD would get 46 per­cent of votes where­as the main oppo­si­tion par­ty SDKÚ-DS would receive just 12.9 per­cent of votes.[6] Since SMER-SD is unlike­ly to repli­cate these num­bers in elec­tions to the Euro­pean Par­lia­ment due to the expect­ed low turnout, Slovakia’s cur­rent­ly strongest polit­i­cal par­ty may decide to ignore the Euro­pean Par­lia­ment con­test to some extent.

Nego­ti­a­tions on the EU cli­mate and ener­gy pack­age in 2008, togeth­er with the gas cri­sis in ear­ly 2009, have under­scored the ris­ing impor­tance of the ener­gy port­fo­lio in the Euro­pean Com­mis­sion. In Decem­ber 2008 Prime Min­is­ter, Robert Fico, sug­gest­ed in which seat he would like to see Slovakia’s next mem­ber of the Euro­pean Com­mis­sion when he stat­ed: “I would like ener­gy pol­i­cy but it is per­haps not going to be easy since all mem­ber states will fight for ener­gy portfolio.”[7] Prime Min­is­ter Fico also expressed his pref­er­ence to nom­i­nate as the future EU-Com­mis­sion­er a pro­fes­sion­al diplo­mat rather than a politi­cian when he argued “I can­not quite clear­ly imag­ine that we would just pick some­one like a rab­bit out of a hat and say that this is going to be Slovakia’s new Com­mis­sion­er. I shall pro­pose a pro­fes­sion­al who is famil­iar with the struc­tures and who knows what work in such an orga­ni­za­tion entails but I do not think it should be a rank politician.”[8] While Prime Min­is­ter Fico did not spec­i­fy who specif­i­cal­ly should become Slovakia’s nom­i­nee for the next EU-Com­mis­sion­er, there are wide­spread spec­u­la­tions that this fall, ambas­sador Maroš Šefčovič, the per­ma­nent rep­re­sen­ta­tive of the Slo­vak Repub­lic to the EU, could replace Ján Figeľ, Slovakia’s cur­rent mem­ber of the Euro­pean Com­mis­sion who is plan­ning to return to Slovakia’s nation­al pol­i­tics and run for the chair of the oppo­si­tion Chris­t­ian Demo­c­ra­t­ic Movement[9].[10] There has been no dis­cus­sion in Slo­va­kia on the appoint­ment of the High Rep­re­sen­ta­tive for the Com­mon For­eign and Secu­ri­ty Policy.

2. Transatlantic relations renewed after President Bush: top priorities

 

Slovakia and the future of EU-US relations

Since 26 Jan­u­ary 2009, Slo­va­kia has a new For­eign Min­is­ter. Fol­low­ing his appoint­ment by UN Sec­re­tary-Gen­er­al, Ban Ki-moon, for­mer For­eign Min­is­ter Ján Kubiš left for Gene­va to head the “Unit­ed Nations Eco­nom­ic Com­mis­sion for Europe” and he was replaced by Miroslav Lajčák, for­mer high rep­re­sen­ta­tive and EU spe­cial rep­re­sen­ta­tive for Bosnia and Herze­gov­ina. In his remarks on debates at the 45th “Munich Secu­ri­ty Con­fer­ence”, For­eign Min­is­ter Lajčák under­lined the impor­tance of EU-US rela­tions where­by he stressed that the new US admin­is­tra­tion would expect a more active Euro­pean Union in resolv­ing the world’s prob­lems. Accord­ing to Slovakia’s For­eign Min­is­ter, the new US admin­is­tra­tion would place greater empha­sis on part­ner­ship with the EU than its pre­de­ces­sor. Lajčák per­ceives the US under Oba­ma as more keen to com­mu­ni­cate with prob­lem­at­ic part­ners, such as Rus­sia or even Iran.[11] The glob­al eco­nom­ic finan­cial cri­sis will cer­tain­ly test the endurance of the transat­lantic part­ner­ship. In addi­tion, Slovakia’s geo­graph­ic pri­or­i­ties of for­eign pol­i­cy – the EU’s East­ern neigh­bor­hood and the West­ern Balka­ns – are going to neces­si­tate transat­lantic coop­er­a­tion and joint EU-US solu­tions, espe­cial­ly in light of the recent cri­sis with deliv­er­ies of nat­ur­al gas from Rus­sia via Ukraine and in light of poten­tial­ly explo­sive sit­u­a­tion in both Bosnia and Herze­gov­ina and in Koso­vo. Afghanistan remains the top pri­or­i­ty in terms of Slovakia’s phys­i­cal and mate­r­i­al con­tri­bu­tion to US-Euro­pean mil­i­tary coop­er­a­tion. In a pub­lic inter­view Lajčák reit­er­at­ed Slovakia’s com­mit­ment to dou­bling the num­ber of its sol­diers in Afghanistan by June 2009.[12] Accord­ing to Defense Min­is­ter Jaroslav Baš­ka, Slo­va­kia plans to have 280 sol­diers, includ­ing fight­ing units, in Afghanistan by 2010.[13]

3. Financial crisis and challenges of global governance: the EU response

 

Slovakia and the financial crisis

Slo­va­kia expe­ri­enced con­sid­er­able eco­nom­ic growth in 2008 and first esti­ma­tions did not expect very con­sid­er­able influ­ence of finan­cial cri­sis on our finan­cial sec­tor. Gen­er­al­ly, banks owned by for­eign investors (main­ly Aus­tri­an and Ital­ian) in Slo­va­kia are very con­ser­v­a­tive and con­sid­ered as healthy but Prime Min­is­ter Fico promised Slovakia’s cit­i­zens that the gov­ern­ment would pay atten­tion to any pos­si­ble out­flow of cap­i­tal from Slo­va­kia to a trou­bled moth­er bank[14]. Anoth­er fac­tor that brought com­pa­ra­ble sta­bil­i­ty to Slovakia’s finan­cial sec­tor was the final­i­sa­tion of Euro­zone entry. In com­par­i­son with the weak­en­ing Czech, Hun­gar­i­an, and Pol­ish cur­ren­cies, the Slo­vak Koruna in the lat­ter half of 2008 record­ed a sta­ble rate vis-à-vis the Euro. As the Nation­al Bank gov­er­nor expressed in an inter­view that – the Euro is already pro­tect­ing our stability.[15] The Nation­al Bank analy­sis from Decem­ber 2008 not­ed that the influ­ence of the finan­cial cri­sis was in decreas­ing prof­its main­ly in insur­ance com­pa­nies and in a reduc­tion of the sector’s activ­i­ties. Clients’ rev­enues are more vul­ner­a­ble and banks are expect­ed to cut back in offer­ing cred­it but finan­cial insti­tu­tions in Slo­va­kia are sta­ble. Banks’ earn­ings from the begin­ning of 2008 actu­al­ly rose by 10 percent.[16] Unlim­it­ed deposit guar­an­tee was intro­duced in Slo­va­kia imme­di­ate­ly after the pro­pos­al by the Euro­pean Com­mis­sion. Sev­er­al pos­si­bil­i­ties were dis­cussed as alter­na­tives to unlim­it­ed deposit guar­an­tee, but the over­pow­er­ing expla­na­tion for the unlim­it­ed deposit guar­an­tee was a sim­i­lar reac­tion of oth­er EU coun­tries and thus an attempt at sus­tain­ing Slovakia’s com­pet­i­tive edge.[17]

The Min­istry of Finance of the Slo­vak Repub­lic count­ed dur­ing state bud­get prepa­ra­tions in the fall of 2008 with a prog­no­sis of eco­nom­ic growth at 6.5 per­cent in 2009 but with the appear­ing impact of cri­sis, espe­cial­ly in car indus­try, its pre­dict­ed growth was cut down to 4.5 per­cent in Novem­ber 2008. In Jan­u­ary 2009 the Euro­pean Com­mis­sion pub­lished new prog­no­sis of GDP growth in Slo­va­kia at 2.7 per­cent and the Finance Min­istry after some pre­vi­ous reser­va­tions changed its prog­no­sis to 2.4 per­cent and Nation­al Bank awaits even less growth of 2.1 percent.[18] Though the Com­mis­sion con­sid­ers Slovakia’s growth still the fastest in the EU, domes­tic bank ana­lysts await fur­ther cut down in growth rate prognosis.[19] The prog­no­sis done by the eco­nom­ic think tank, “INEKO” from expert sur­veys sug­gest not less than 1.4 percent.[20] Slo­va­kia planned to con­tin­ue reduc­ing the bud­get deficit[21] but the wors­en­ing growth prog­no­sis and the rise in unem­ploy­ment that brings increase of state expen­di­tures, spells some dif­fi­cul­ties with future com­mit­ment to sound fis­cal policy.

More seri­ous are indi­rect impacts of the finan­cial cri­sis on the Slo­vak econ­o­my. The gov­ern­ment has been mon­i­tor­ing the sit­u­a­tion but the growth in unem­ploy­ment occurred only late­ly. Gov­ern­ment expec­ta­tions in address­ing this issue are main­ly focused on a sup­port from the Euro­pean Glob­al­i­sa­tion Adjust­ment Fund and pos­si­bil­i­ties to spend ear­ly struc­tur­al funds allo­cat­ed for lat­er peri­ods. Slovakia’s plan to man­age the impact of the cri­sis includes invest­ing into infra­struc­ture, espe­cial­ly motor­ways with­in pub­lic-pri­vate part­ner­ship schemes and there­fore, the gov­ern­ment has been nego­ti­at­ing coop­er­a­tion with the “Euro­pean Invest­ment Bank” and the “Euro­pean Bank for Recon­struc­tion and Development”.

In terms of a pub­lic dis­cus­sion of the main long-term impli­ca­tions of the cur­rent eco­nom­ic and polit­i­cal sit­u­a­tion, Slovakia’s politi­cians have been keen to empha­sise the impor­tance of the EU-rules, espe­cial­ly in the area of com­pe­ti­tion pol­i­cy and with respect to the Maas­tricht criteria.

 

 

 

[1] See Spe­cial Euro­barom­e­ter 303: Euro­peans and the 2009 Euro­pean Elec­tions. Results for Slo­va­kia, Jan­u­ary 2008, avail­able at: http://ec.europa.eu/public_opinion/archives/ebs/ebs_303_fiche_sk.pdf (last access: 18 March 2009).
[2] Law num­ber 331/2003 adopt­ed on 10 July 2003.
[3] SMER – sociál­na demokra­cia (SMER-SD).
[4] L’udová strana – Hnu­tie za demokrat­ické Sloven­sko (ĽS-HZDS).
[5] Sloven­ská demokrat­ická a kresťan­ská únia – Demokrat­ická strana (SDKÚ-DS).
[6] SITA Press Agency: “Prieskum: Pref­er­en­cie Smeru aj HZDS vo februári klesli”, 17 Feb­ru­ary 2009.
[7] Rená­ta Goldírová: “Budú­ca Európ­s­ka komisia”, Slo­vak Radio, 30 Jan­u­ary 2009, avail­able at: http://www.rozhlas.sk/ (last access: 18 March 2009).
[8] Ibid.
[9] Kresťan­skodemokrat­ické hnu­tie (KDH).
[10] EurAc­tiv: “Črtá sa podo­ba novej Európskej komisie”, 7 Jan­u­ary 2009, avail­able at: http://www.euractiv.sk/ (last access: 18 March 2009).
[11] TASR: “Lajčák: USA očaká­va­jú aktívne­jšiu úlo­hu EÚ pri riešení sve­tových prob­lé­mov”, 11 Feb­ru­ary 2009.
[12] Mirek Tóda: “S Ficom si vo všetkom rozu­miem”, Sme, 16 Feb­ru­ary 2009.
[13] Miroslav Kern/Veronika Šutková: “Na vojakov číha najnebezpečne­jšia misia”, Sme, 25 April 2008.
[14] Gov­ern­ment Office: “Tlačová kon­fer­en­cia po skončení 113. (mimo­ri­ad­nej schôdze) vlády SR”, 20 Sep­tem­ber 2008.
[15] SITA: “Šramko: Euro už tlmí dopad krízy na Sloven­sku”, 26 Jan­u­ary 2009.
[16] SME: “NBS: Finančná kríza sa už jed­noz­načne pre­jav­i­la”, 16 Decem­ber 2008.
[17] SME: “Garan­cia sú na papieri. Banky sú zdravé”, 9 Jan­u­ary 2009.
[18] The pre­cise analy­sis by the Nation­al Bank will be avail­able in March 2009.
[19] Web­noviny: “MF zníži­lo odhad tohtoročného ras­tu na 2,4 %, uviedol Poči­atek“, 4 Feb­ru­ary 2009.
[20] ETrend: “Ekonó­movia: Rast HDP spo­ma­lí na 1,4%”, 4 Feb­ru­ary 2009.
[21] Aktuálne.sk: “Fico: Výsled­ky sum­mi­tu sú pre Sloven­sko úspe­chom”, 12 Decem­ber 2008.