INTERVIEW: PM Fico silences critics as Slovakia prepares to join euro

By bne IntelliNews August 15, 2008

Jan Cienski in Bratislava -

Robert Fico has a hard time concealing his satisfaction as he contemplates Slovakia's imminent entry into the Eurozone. Sitting in his office in Bratislava, the Slovak prime minister is savouring the fact that is it under his watch that Slovakia will become the first ex-Soviet bloc country to be admitted to Europe's most exclusive club. "This is one of the most important decisions in this history of Slovakia," says Fico, ticking off the other accomplishments of his two years in power, including Slovakia becoming a member of the Schengen open border system and the recent ratification of the Lisbon treaty reforming the EU.

The list of successes comes as Slovakia's economy is expected to grow by 7.7% this year at a time when Western Europe's largest economies appear to be flirting with recession. But just two years ago, when he first won office, the expectations for Fico were a lot lower. He was cold-shouldered by the rest of Europe as a left-wing populist, and local economists, politicians and business leaders painted him as a danger to the daring economic reforms started by former prime minister Mikulas Dzurinda, which had turned Slovakia from a rusting backwater into one of Europe's fastest-growing economies. "In 2006, many politicians, many analysts, many people, believed that my government would be very bad for the country, for the economy, for everything," says Fico. "But the case is that in 2008 we have the highest economic growth in the European Union in Slovakia, we have control over inflation, there are only positive trends. The introduction of the euro is another success of this government."

The sceptics had reasons to worry when Fico took power. He had campaigned on a platform of undoing Dzurinda's reforms, and was viscerally opposed to privatising state assets. He struck a coalition agreement with a small nationalist party known for its anti-Hungarian outbursts and with the populists of Vladimir Meciar, the former prime minister who had driven Slovakia to the periphery of Europe under his authoritarian rule in the early 1990s. But Fico got a quick taste of the realities of power when some of his early comments caused the Slovak currency, the koruna, to plunge on currency markets. Chastened, he reaffirmed Slovakia's earlier commitment to join the euro as early as possible. "In 2006, we decided the euro would be good for Slovakia," he says, leaning forward with his close-cropped head.

That decision quickly stabilized the koruna, but it defanged much of Fico's populist economic programme as well. While continuing to talk the populist talk, Fico was unable to gut the reforms. Instead, he ended up tweaking them, for example getting rid of an unpopular fee to access the health care system.

Credit where credit is due

Even his fiercest critics are forced to admit the results haven't been catastrophic. "He hasn't been as bad as we feared," is the grudging assessment of Ivan Miklos, the former finance minister and one of the champions of Dzurinda's reforms.

Fico himself seems to have mellowed as well. While proudly stating: "This government hasn't privatised anything," and stressing his is a social democratic government that's finely attuned to the needs of the common citizen - "I know my people," he says - he also goes on to insist the budget deficit will continue to fall in the coming years, reaching 1.7% in 2009, and that salaries should rise no faster than productivity. "It hasn't been easy," he admits, "if you want to introduce social programmes, but have to keep the deficit under control by law."

While Fico has not proven to be particularly controversial when it comes to economic policy, he has managed to keep his rural and nationalist voters satisfied with a steady diet of positions that don't cost much, but which keep them happy. One frequent target is the media - elements of which Fico has likened to "prostitutes."

Another source of cheap comfort is foreign policy. Relations with Hungary, Slovakia's historical foe, are tense. Fico sent warm signals to countries like Libya, Cuba and Venezuela, but has been careful not to actually join the anti-US movement. Slovakia is decidedly more pro-Russian than its neighbours Poland and the Czech Republic, both of whom worry about overdependence on Russian energy and are negotiating the possible location of elements of the US-built missile defence shield on their territory. "We are not happy with radars and rockets in Europe," Fico says.

Slovakia is also one of the minority of EU countries that refuses to recognize the independence of Kosovo. "Our view is that international law hasn't been respected in this case," says Fico. Slovakia is particularly mindful of the precedent set by allowing parts of countries to peel away because of its Hungarian minority, about a tenth of the population.

The straddle between a populist message and a fairly orthodox economic programme, leavened with a robust and sometimes contrarian foreign policy doesn't seem to have turned off voters. Fico remains the country's most popular politician and analysts expect that his Smer party will win the 2010 elections.

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INTERVIEW: PM Fico silences critics as Slovakia prepares to join euro

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