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Where is Europe`s shooting star heading?

The outlooks for Bratislava – not only postcard-like (via PnP, Flickr)

Whenever European economists mentioned Slovakia in the two years, it had been showered with praise: Its growth has been, even for the new EU member states, astonishing – in 2007, GDP grew in double digits, 2008 could show a growth or around 7 %. As a result, Slovakia will be join the Euro zone in 2009, a fact it will be envied for by its neighbours.

But under the surface, things look less bright. In a PEW research survey from 2007, 72 % of Slovakians embraced multinational companies’ benefit to their country, more than in the UK of the US. – but as the international competitiveness mainly relies on unusually cheap labour, inflation and rising wages spell trouble for the country. As the country, like many of the other Eastern European EU members, has not done enough to boost knowledge-based industries, and as it seems to be suffering a brain drain, relapse my loom in the future.

On a political level, the country has been running on the spot since voters ousted the reform government of Mikulas Dzurinda, who managed to stimulate investment, but fell short of reducing jobless-rates to an average EU-level and left a high health-care deficit. His successor Robert Fico http://en.wikipedia.org/wiki/Robert_Fico has stayed clear of performing the promised acts of nationalization and corporate taxation, but diplomatic disgruntlements with Hungary (driven by coalition partner of the right Slovak National Party) and his continuing war with the press have taken more space than necessary. Especially the press is suffering: In April, Mr. Fico brought his „issues“ to the parliament, as it adopted a Press Act that will enable anyone mentioned to reply in papers to opinion pieces, even if they contained nothing wrong. There is no possibility for the editorial staff to re-reply.

Though the adoption of the Euro should deservedly make Bratislava and Brussels celebrate – as long as the long-term economic outlook and the medium-term plans of the current government remain misty, doubts about the sustainability of the Slovakian boom will resurface again.

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