“To remain sitting at home and ‘corrode’ slowly from the inside is the worst attitude. Various research studies point to a great risk of severe letargy coming after several years of unemployment even in the lives of otherwise active and diligent people and it’s really hard to beat”. It is the opinion of Frantisek Mucka, deputy chief editor of the Trend daily economic newspaper and member of the Central European Business Social Initiative, interviewed by Danka Jaceckova, for SIR Europe (Bratislava), on the impact of the economic crisis in Slovakia.
When did economic crisis became evident in Slovakia and how could you describe its impact on enterpreneurship, state economy, employment and family?
“Slovak economy was touched by the crisis at the end of 2008. Two years before this date the country showed growth of ten percent, the highest within the European Union. That’s why, when analysts were trying to estimate what an approaching crisis would cause to Slovakia, they were quite optimistic. Far too optimistic. The fall that came was one of the deepest among the member countries of the EU. Nobody was prepared for it – not the employers, neither the state. Growth of unemployment was extraordinarily fast. For many regions and families it meant the return to times when finding a job had been impossible. And for many the situation still lasts. The state resigned to take any measures then, and increase of acquisition costs or intense growth of salaries in public administration led to the consequence that Slovakia become one of the countries with worst economy results within the EU”.
What strategy was adopted to fight the crisis?
“During the first phase, in 2009-2010, there was no strategy, perhaps apart from the pulverization allowance provided by the state. When there’s a rapid recession, the state actually can’t do much. If companies don’t succeed in sale of their products, the state won’t solve the situation instead of them. However, it would be useful if the state wouldn’t complicate it even more, which, unfortunately, did happen in Slovakia. As a result of previous rapid growth of debt, the country has to rise an employment tax now and that certainly isn’t helping the situation in regard to employment”.
How did the effort to return to stability reflect in regard to the financial and bank system, support of enterpreneurship, public investments, reform of the employment market and other areas?
“The bank sector in Slovakia is in a good condition. Indeed, there is one bank with many Greek obligations but the situation is being solved slowly and it seems it will succeed without a ‘big bang’. Public investments in Slovakia have always been associated with a problem that they are much too expensive considering the ability of private sector to guarantee them. The state is not a ‘saviour’, it is always represented by politicians who get their leading positions because they promise things that can’t be fulfilled. Only private enterpreneurs, companies and sole traders are able to create job positions without increasing the debt. This is the area that the state should concentrate on, to support them and not complicate their life”.
How does Slovakia perceive initiatives and measures of the European Union in regard to the crisis?
“The European Union itself isn’t sure about the next steps. Germany puts pressure on the member countries to start economizing without creation of debt. Spain and France want to invest in economy even at the cost of its increase, which is not sustainable on a long-term basis. The EU and its officers won’t reverse economic trends, it can’t be done at the conference board. It seems that the plan of the EU to become the richest economy of the world starts to fall apart today”.
What is the current situation in Slovakia like? Do people believe the crisis could be overcome?
“The situation is ‘half cloudy’. Number of job positions slowly grows, although it is still pretty far from ideal conditions. It’s necessary to say openly that some regions won’t see a considerable improvement in the course of the following years. If the young generation in those regions wants to have some hope, unfortunately there is no other way than to go somewhere else. There are areas in Slovakia where the work forces are still missing, not to mention the demand from countries like Germany. There are many job mediators, however, it is always necessary to verify their credibility”.