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How Eurozone Black Sheep Slovakia Achieved Miraculous Growth

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Slovakia

By Florence Beugé

LE MONDE/Worldcrunch

The past ten years have been a success story for Slovakia.

The country was the last to arrive in the Eurozone (in 2009), and here it is, taunting Europe.

Industrial production is still growing: +2% in May, +10.8% yearly, according to figures published on July 10.

In 2012, the growth rate was approximately 2.5%, far from the other, considerably feebler European economies.

Who remembers that in October last year, Bratislava rejected the European Financial Stability Facility before forcing itself to approve it, at the cost of a political crisis?

In June, Slovakian parliament ratified the European Stability Mechanism, to which it will contribute 659 million euros over five years. “We’ve often been considered the black sheep of Europe! And now we are the good guys!” says Juraj Karpis, an analyst at the Institute for Economic and Social studies in Bratislava.

As if to catch up on lost time, this country of 5.4 million inhabitants is doing everything at an accelerated pace. “I’ve been here since 2002 and I feel like I’ve been through ten professional lives, everything changes so fast!” says Vincent Barbier, CEO of energy services company Dalkia.

Fast paced reform

In less than a decade, Slovakia has integrated the OECD, NATO, the European Union and the Eurozone. Living standards have already reached 70% of the European average.

Its automobile construction know-how, a legacy of the Soviet era, is highly praised. Even though it is trying to diversify, the Slovakian economy still rests mainly on its car and flat screen television exports to the EU -- something which is both its strength and its weakness.

Overall, the Euro is seen “as a guarantee of stability, in particular for investors,” says Jan Cienski, the Financial Times’ regional correspondent.

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