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Simeon Mitropolitski

Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.

He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.

In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.

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24 July 2006

Slovakia: Is the economic miracle over?

© 2006, IRED.Com, Inc., Simeon Mitropolitski

Slovak people voted out of office the main architect of their economic miracle. In the last 8 years their country became top destination for automobile and other foreign investments. The population however decided it had enough with the fast economic progress without fair social redistribution. From behind the curtain the European Union (EU) and its big outsourcing nations can cheer the election results. Another country that tried to overcome fast its economic backwardness may be forced to adopt less liberal economic model, implying less economic freedom and more regulations. Instead of seeing new economic 'tigers' at their doorsteps, Germany and France will like to have at the East small and not so economically powerful countries begging for aid and thus ready to follow their international political directions. In the last years Slovakia has just begun to escape this humiliating role. Now it may be forced again to adopt it. But can we give up completely any chance for it to catch up fast with the more advanced West? Certainly not, but this will require first some sort of emancipation from Brussels' political shadow.

The EU has so far twice interfered heavily into Slovak political process. The first time was in 1998, when then popular and populist Prime Minister Vladimir Meciar lost election against diverse political coalition. Bringing down the Meciar's government was then a precondition for opening negotiations for EU membership and for future NATO membership. The second time when the EU political leverage was used was in 2002, when at stake was the EU membership itself. Deciding rightly or wrongly that Meciar is unacceptable as a Prime Minister, the EU asked the other Slovak parties not to form governing coalitions with his party.

Keeping Meciar far from the government had an unexpected consequence in keeping away from the government large and powerful social groups that opposed liberal market reforms. As a result Slovakia in the last 8 years was among the fastest growing economies in Central Europe and among the countries with best investment climate. Becoming both EU and NATO member in 2004 Slovakia was firmly anchored to the West. The threat of possible alternative foreign orientation, a threat symbolized by Meciar gradually faded away. Other political groups became symbolizing the social alternatives to the free market model.

The EU has more to gain from this new social alternative, as far as it doesn't include figures like Meciar. The Union is in search of common economic model, and the best proposal so far is to build it on the basis of social-democratic values, including high taxes, more regulations, and minimal social disparities. In this respect any country that drifts away from this model will cheat the others by taking 'their' jobs. Slovakia was very good at this since 1998. There are however many countries within the EU that would like this to stop. They won't change their model; they will rather impose their model on those who are small and still weak.

So can we say this is the end of the Slovak economic miracle? Certainly not, the fundamental reason why Slovakia needs a fast growing economy is still present. Slovak per capita GDP is still barely above the half of the richest EU countries. Only bold economic policy without social dogmatism can help to eliminate this gap within 20-30 years. The first condition for this progress however is to escape from the long political shadow that Brussels symbolizes. This doesn't jeopardize the EU membership itself. Some of the most economically successful EU members after all are precisely those who follow firmly their own policies.

Slovakia Country Profile:
  • Area: 48,845 sq km.
  • Population: 5.5 million (July 2006 est.).
  • Ethnic groups: Slovak 85.8%, Hungarian 9.7%, Roma 1.7% (2001 census).
  • Languages: Slovak (official), Hungarian, Roma, and Ukrainian.
  • GDP per capita: purchasing power parity $16,100 (2005 est.).
  • Distribution of family income (Gini index): 25.8 (1996).
  • Unemployment rate: 11.4% (2005 est.).
  • Main trading partners: Germany, Czech Republic, Russia, and Austria.
  • Internet users: 2.3 million (September 2005).
  • (Source: CIA - The World Factbook 2004)

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    See also the directory of companies providing real estate services in, and general real estate information of Slovakia.

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