Q. After ex-Premier Meciar’s call for a referendum that would force early elections and bring him back to power, the European Commissioner for Enlargement, Günter Verheugen, described the domestic political situation in Slovakia as "rickety and complex." What are the chances of early elections?

A. Vladimir Meciar’s initiative has no support within the coalition, nor majority backing in Parliament. And most citizens— according to opinion polls—will not go to the ballot boxes. And without the approval of at least 51 percent of voting-age citizens, no early elections will be held! This initiative is part of Meciar’s political game, but I don’t think he will be successful. Despite the painful restrictive measures the government had to introduce last year in order to stabilize the economy, we avoided sliding into recession, and that also helped keep the political situation stable.

Our current account deficit that stubbornly remained in the 10 percent range of GDP between 1996 and 1998, dropped to 5.6 percent in 1999. The budget deficit also declined, from 5 percent of GDP in 1997 and 1998, to less than 4 percent in 1999. Interest rates fell from about 30 percent at the fall of 1998 to 10 percent now. We also lowered corporate income tax from 40 percent to 29 percent. Economic growth was a modest 1.9 percent last year, but still much better than zero growth, as predicted by most international institutions.

Q. Besides meeting the stabilization targets, how will Slovakia assure a quick accession to the European Union? The Accession Agreement lists other qualifications for entry, including promoting competitiveness through enterprise restructuring, financial sector reform, an investment-friendly environment, and sound bankruptcy law.

A. We opened the country after the 1998 elections, not only politically, but also economically, to foreign investors and enterprises. Hopefully we will join the OECD this year. And, of course, we have to be competitive once we get inside the Union. That applies to all frontrunners, not just Slovakia.

Q. Is then Slovakia a frontrunner?

A. Absolutely. We lost a couple of years, we were not invited to the 1997 opening of the accession negotiations, but we can catch up, and are convinced that by 2004—this a realistic date—together with Hungary, Poland, and other countries of the so-called Visegrad Group, we will be officially accepted into the Union. Slovakia is not too much behind. We went through the individual screening of chapters [the various sectors that are reviewed according to their readiness for accession] and the Commissioner recommended to open eight chapters with us in the course of negotiations during the Portuguese presidency. The Czechs and Hungarians both started with seven chapters, so it is a good signal for us. According to the Commission’s report, Slovakia’s preparedness is good, especially where legislation is concerned.

Q. What about the other criteria: creating an investment-friendly atmosphere, supporting small and medium-sized enterprises, reforming the administration?

A. We would prefer to have more inflow of foreign capital and foreign direct investments, but the boom that started in the early 1990s is over. Slovakia’s regulations and taxes are comparable to other central European countries, and we will further improve them. The same applies to the bankruptcy framework—parliament will debate amendments to the bankruptcy law to provide greater protection to creditors. It is linked to EU accession, but also to our forthcoming OECD entry.

Q. How is the World Bank helping the accession process?