The EBRD’s Board of Directors has adopted a new strategy for the Slovak Republic, which commends the country’s achievements and sets out the Bank’s next priorities in the Slovak Republic.
Read full Slovak Republic strategy here
The Slovak Republic has achieved rapid growth in recent years. Due to its solid macroeconomic performance and past progress with structural reforms the country was able to join the eurozone at the beginning of this year.
However, given the rapidly worsening external environment the outlook for Slovakia has deteriorated significantly in the second half of 2008. The economy is now likely to contract in 2009 as Slovakia will suffer from the rapidly worsening outlook in its main export markets.
While the banking system has so far suffered limited impact, current indications are that the next few years will see a substantial reduction in the availability of finance which will have implications for the real economy. The government has reacted quickly by adopting a number of crisis response measures. The EBRD stands ready to support the country in these more difficult times.
Given the current environment, it is paramount that the Slovak Republic continues reforms to help sustain the economy’s strength, assist in the process of industrial diversification and reduce regional inequalities. In this context the strategy identifies the following priorities:
• Further improvements in the business environment to help mitigate regional income disparities and structural unemployment.
• The promotion of alternative energy sources, greater energy efficiency and development of renewables.
• The modernisation of municipal and environmental infrastructure with the assistance of EU funds, private sector involvement and commercial co-financing from local sources.
• The mobilisation of private sector funding and expertise for the development of an efficient transport infrastructure network.
• In case it becomes necessary, safeguarding the stability of the financial sector and guaranteeing the operating stability of the well-functioning multi-pillar pension system.
• The development of equity finance for small and medium-sized enterprises.
In light of the global crisis and its impact on the Slovak economy, the EBRD has adjusted its operational objectives in the country as follows:
• The EBRD will foster the continued availability of credit to SMEs and municipalities through local banks.
• The EBRD will participate in the co-ordinated effort by international financial institutions to contribute towards financing of viable public-private concession projects in transport infrastructure which are now coming to the market.
• The EBRD will promote investments in the diversification of energy supply, in energy efficiency and renewable energy through the expansion of the Slovak Energy Efficiency Financing Framework.
• The EBRD will provide higher-risk products such as equity to local enterprises to support viable businesses faced with worsening market conditions with particular emphasis on investment needs in the context of cross-border expansion.