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SLOVAKIA - General Information about Slovakia

Geografical Information
Slovakia is a landlocked country located in the heart of Europe. It is bound by Hungary to the south, Poland to the north, Austria and the Czech Republic to the west and Ukraine to the east. Slovakia is surrounded by the Carpathian Mountains to the north and northeast. In the northern area the High Tatra, which has rocky peaks, snowcaps and traces of ancient glaciation, reaches the country's highest point of Mt. Gerlachovka at 2,655 metres (8,711 feet).

Above map courtesy of: GraphicMaps.com. For more information about Slovakia visit: http://www.worldatlas.com/webimage/countrys/europe/sk.htm

To the south the mountains are lower and form the Low Tatra and Slovak Ore Mountains while to the east other ridges of the Eastern Carpathian Mountains rise. In total mountains account for more than 33% of the total land area and are generally heavily forested or wooded. The lowland area in the southwest is part of the Hungarian Plain and the country's principal rivers are the tributaries of the Danube River, such as the Vah, Nitra and Hron. Major Cities (pop. est.); Bratislava 448,800, Kosice 238,900, Presov 91,000, Nitra 86,700, Zilina 85,700, Banska Bystrica 84,600 (1994). Land Use; forested 41%, pastures 17%, agricultural-cultivated 33%, other 9% (1993).

Climate
Slovakia has a continental climate with warm humid summers and cold dry winters with snowfall lasting from 27 to 30 days. Average annual precipitation varies from 500 to 700 mm (19.6 to 27.5 inches) while the mountains receive as much as 1,000 mm (39 inches). Average temperature ranges on the plains are from 1 to 3 degrees Celsius (30 to 27 degrees Fahrenheit) in January to 19 to 21 degrees Celsius (66 to 70 degrees Fahrenheit) in July while in the High Tatra winter temperatures can fall to 12 degrees Celsius (10 degrees Fahrenheit).

Nature

This is a land of real spirit, where folk traditions have survived the domination of foreign rulers and a plethora of ancient castles and charming chateaux pay testament to untold wars and civil conflicts. And the people have come through it all with their welcoming spirit intact. There are the high peaks of Tatra mountain range, thick forests with healing climate, lakes and mountain rivers. Deep under the ground there are hidden treasures in the form of bizarre caves and springs of mineral and thermal waters, which is the result of Tertiary era's volcanic activities in the Carpathian Mountain Range. Caves and chasms are a world of silence and darkness with never-ending underground mazes, cascade lakes, drop-stones, glacial and aragonite flowers and polymorphs. These underground temples with healing climate were gradually shaped by the influence of water, rock and air during thousands of years. Geysers of crystal clear water gave rise to the building of Slovak Spa Towns as centres of recreation and health.0">

By world standards, Slovakia is a tiny territory, a small and independent country (since January 1, 1993) in the heart of Europe, not only metaphorically but also geographically. The actual geographical centre of Europe is located not far from the historic town of Kremnica. Slovakia is a place where eastern and western cultures mix together, but at the same time it is a country that is unexplored and little know, except by those travelers that have ventured east of Vienna or Prague.

The most famous Slovak National Parks:

People
The majority of the 5.4 million inhabitants of the Slovak Republic are Slovak (85.8%). Hungarians are the largest ethnic minority (9.7%) and are concentrated in the southern and eastern regions of Slovakia. Other ethnic groups include Roma, Czechs, Ruthenians, Ukrainians, Germans, and Poles. The Slovak constitution guarantees freedom of religion. The majority of Slovak citizens (69%) practice Roman Catholicism; the second-largest group is Protestants (9%). About 2,300 Jews remain of the estimated pre-WWII population of 120,000. The official state language is Slovak, and Hungarian is widely spoken in the southern region.

Despite its modern European economy and society, Slovakia has a significant rural element. About 45% of Slovaks live in villages of less than 5,000 people, and 14% in villages of less than 1,000.

Economy
Since the establishment of the Slovak Republic in January 1993, Slovakia has continued the difficult transformation from a centrally planned to a modern market-oriented economy. This reform slowed in the 1994-98 period due to the crony capitalism and irresponsible fiscal policies of Prime Minister Vladimir Meciar's government. While economic growth and other fundamentals improved steadily during Meciar's term, public and private debt and trade deficits soared, and privatization, often tarnished by corrupt insider deals, progressed only in fits and starts. Real annual GDP growth peaked at 6.5% in 1995 but declined to 1.3% in 1999. Much of the growth in the Meciar era, however, was attributable to high government spending and over-borrowing rather than productive economic activity.

The economy grew 5.5% in 2004, the strongest growth in Central Europe for the fourth consecutive year, and is predicted to expand by more than 5% annually in 2005-2007. Headline consumer price inflation dropped from 26% in 1993 to an average rate of 7.5% in 2004, though this was boosted by hikes in subsidized utilities prices ahead of Slovakia’s accession to the European Union. In July 2005, the inflation rate dropped to 2.0% and is projected at less than 3% in 2005 and 2.5% in 2006.

The current account deficit, a long-standing problem, shrank to $1.4 billion, or 3.4 percent of GDP in 2004, from its recent peak at $1.9 billion, or 8.8 percent of GDP in 2001. A drop in the trade deficit accounted for most of the improvement. In 2004, Slovakia's trade deficit amounted to 3.4% of GDP, up from 1.9% of GDP in 2003, but much less than the gap of 10.3% in 2001. The foreign trade balance is now largely influenced by strong growth in capital good imports related to foreign investments in the country. This trend will likely begin to reverse in 2006 when those investments begin production and selling abroad. Slovakia’s total foreign debt was $23.7 billion at the end of 2004, up $5.4 billion from the 2003. The increase in the level of debt was caused largely by exchange rate losses of the dollar.

Foreign direct investment (FDI) in Slovakia has increased dramatically. Cheap and skilled labor force, low taxes, a 19% flat tax for corporations and individuals, no dividend taxes, liberal labor code and a favorable geographical location are Slovakia’s main advantages for foreign investors. FDI has grown by 600% since 2000 to around $13.6 billion or $2,540 per capita by the end of 2004.

Germany is Slovakia's largest trading partner, purchasing 28.7% of Slovakia's exports and supplying 23.8% of its imports in 2004. Other major partners include the Czech Republic (13.2% imports and 13.3% exports), Italy (5.6% and 6.4%), Russia (9.4% and 1.2%), and Austria (4.3% and 7.8%). Slovakia imports nearly all of its oil and gas from Russia and its export markets are primarily OECD and EU countries. More than 75% of its trade is with EU members (73% imports and 85% exports). Slovakia’s exports to the United States made up 4.8% of its overall exports in 2004, while imports from the U.S. account for 1.6% of its total purchases abroad.

Economic Survey by OECD

Economic Survey - Slovak Republic 2004: Summary: an ambitious reform programme under way  

Slovakia is engaged in an ambitious reform process which has a potential to quicken productivity growth, increase the employment rate and accelerate the catching-up to the per capital income levels of more advanced OECD countries. Short-term outcomes may be demanding socially and politically, but stimulus to growth and job-creation should help overcome the hardship. Policymakers should fully enforce the new framework for creating and doing business and support it with the full force of law. Human capital enrichment for new entrants through education reform is critical, while intensified re‑training for the long-term unemployed is also indispensable, including for the Roma population. Demand for labor will be stimulated by the planned reductions in employment costs in the low end of the market, as well as by the fundamental tax reforms raising the return to enterprise creation and development. Further cuts in social contributions, which remain among the highest among OECD countries, should be a priority. The reform of the public spending system, which is already well engaged, should facilitate such additional cuts and help promote a smaller and more effective government. Continuing efforts of fiscal consolidation will improve the macroeconomic policy mix and help maintain supportive monetary conditions in the face of currency appreciation pressures from EU accession, and will help meet the Maastricht nominal convergence rules on a sustainable basis prior to Euro area participation. The nominal flexibility of wages and prices should be conserved in order to preserve the competitiveness of the economy, notably of the domestic manufacturing and service firms. By sticking to this multi-pronged policy agenda, Slovakia would make its growth process more balanced and more job-rich and would accelerate further its already successful catching-up process

Slovakia and Europe Union
The main idea

1995 On June 27 Slovakia formally applies to join the European Union.
1997 On June 1 establishment of the European Central Bank.
On November 10 accession negotiations open with Cyprus, Poland, Estonia, the Czech
Republic, Hungary and Slovenia.
1999 On January 1 the Euro is officially launched. Austria, Belgium, Finland, France, Germany,
Ireland, Italy, Luxembourg, The Netherlands, Portugal and Spain adopt the euro as their official
currency.
On December 10-11 European Council is held in Helsinki, Finland. It decides to open
accession negotiations with Romania, Slovakia, Latvia, Lithuania, Bulgaria and Malta and to
recognise Turkey as an applicant country.
2000 On January 15 the opening session of the Ministerial Intergovernemental Conferences for t>2001 On January 2 Greece becomes the 12th member of the euro zone.
2002 On January 1 the euro coins and notes enter into circulation in the twelve participating Member
States:Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the
Netherlands, Portugaland Spain.
2003 On April 16 the Treaty of Accession between the EU and the Czech Republic, Estonia, Cyprus,
Latvia,Lithuania, Hungary, Malta, Poland, Slovenia, and Slovakia is signed in Athens, Greece.
2004 On May 1 European Union's biggest enlargement ever in terms of scope and diversity becomes
a reality with10 new countries - Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania,
Malta, Poland, theSlovak Republic, and Slovenia - representing all together more than 100
million citizens, joining theEuropean Union.
2005 On November 25 Slovakia linked its currency, the koruna, to the euro in the European Exchange
RateMechanism. Under the mechanism, the koruna will be pegged to the euro within a 15 per
cent margin aboveor below a central rate of 38.4550 koruna to the euro.
Following Plans
2007 On January 1 Slovakia is expected to become a part of the Schengen system. Its goal is to
end bordercheckpoints and controls within the Schengen area (also known as Schengenland)
and harmonize external border controls.
2009 On January 1 Slovakia plans to adopt the euro currency by entering the euro zone.