A+ credit rating for Slovakia from Fitch. Bratislava particularly attractive to investors

FITCH the credit rating agency says that its A+ ratings balance robust institutions, including the country’s membership of the eurozone which has helped attract foreign investment, against a fairly high GDP volatility that reflects sector and market concentration. Fitch foresees a stable growth for the country, at 3 percent yearly, mainly boosted by strong domestic consumption.
Effectively, this means that it is an attractive country in the eyes of foreign investors who monitor data of rating agencies and build factories or lend money accordingly, the Pravda daily wrote.
Moreover, Fitch Ratings expects a gradual reduction of the state budget deficit and public debt, regardless of potential changes in political leadership and policies, thanks to positive macroeconomic development and improved tax collection. The agency also appraises considerable progress in solving unemployment and good macroeconomic development, the finance ministry informed the SITA newswire. “I am glad that we are a country which constantly works at improving,” Finance Minister Peter Kažimír said. “Our positive direction has been appreciated already by a second rating agency [after Standard & Poor’s] which expressed trust in us by its evaluation.“ 
The Standard & Poor’s rating agency on January 29 confirmed Slovakia’s rating at A+ with a stable outlook, whereby Slovakia, along with Ireland, now has the ninth-best rating from among 19 eurozone countries.

SLOVAKIA’s economy is expected to grow in 2015 faster than originally forecast

GDP growth estimates revised up

SLOVAKIA's economy is expected to grow in 2015 faster than originally forecast, benefiting from quantitative easing by the European Central Bank, which weakens the euro, and low crude oil prices. 

The National Bank of Slovakia has upgraded its forecast from January forecast of the growth of the gross domestic product by 0.3 percentage points, up from 2.9 percent to 3.2 percent for 2015. 

"Whereas the positive impact of the reduction of oil prices on the economy has been lower than expected in the previous prognosis due to the slight increase in crude oil euro prices, the fully realised programme of extended purchase of assets will have a positive impact on the Slovak economy mostly by virtue of higher eurozone demand and the weaker euro exchange rate," NBS Governor Jozef Makúch said on March 31 when introducing the latest prognosis. 

He added that the quantitative easing (QE) launched by the European Central Bank (ECB) is likely to have a positive impact on Slovak economy in the form of 0.4 percent GDP growth in 2015 and 0.2 percent in 2016.

Finance Minister Peter Kažimír and Prime Minister Robert Fico perceive the upgraded forecast as encouraging, while the latter said that at such growth will spur larger changes on the labour market.

"At economic growth above 3 percent we can expect a natural creation of new work places and a reduction in the unemployed," Fico said as cited by the TASR newswire. 

The NBS predicts a dynamic growth of work places especially in the service sector, but notes all should benefit from the improved growth.

"Rising domestic demand also fuels employment, which is increasing quicker than expected. We expect 22,000 jobs to be created in 2015," said NBS Vice Governor Ján Tóth, adding that average unemployment rate could be 12 percent in 2015 and drop to 10 percent by 2017.

Kažimír appraised the fact that the country's economic growth has not been driven exclusively by foreign demand but that the domestic demand strengthening. 

"The structure of the growth is more balanced and healthier that any time before," he said as cited by SITA. 

NBS also expects real wages to grow also because of negative inflation of the -0.3 percent forecast for 2015. 

"Salaries will rise quicker particularly in the health care and education sectors and should align gradually with labour productivity," said Tóth. In 2015, nominal wages are likely to grow 2.6 percent.

Reforms needed 

The central bank believes that Slovakia will benefit from the ECB's €1 trillion bond-buying programme and Makúch is confident that the ECB will find enough quality bonds to meet its targeted €60 billion worth of monthly purchases.

"We're meeting our buying volume targets, in terms of quality of purchased bonds," he said.

He warned that this programme is not any substitute for the structural changes needed in some eurozone economies. 

"In no way is QE to replace insufficient reform efforts by eurozone governments when carrying out structural reforms and keeping rules of budgetary responsibility," said Makúch, "because the EQ-supported growth of economy will not last forever". 

Renáta Konečná, general director of the Department of Monetary and Economic Analysis at the NBS told public broadcaster RTVS that these reforms should target maintaining and improving competitiveness. 

"This means that these are important reforms on the labour market and from the viewpoint of simplicity of hiring and firing employees," said Konečná. "And from the viewpoint of Slovakia it is also important to increase drawing of EU funds which help the economy in terms of the growth of investments and support of sustainable growth in the future."

By the numbers

Slovakia's GDP grew 2.4 percent in 2014. The last time Slovakia registered an economic growth exceeding 3 percent was in 2011. 

The NBS predicts that the economy will grow 3.2 percent in 2015 to be followed by 3.8 percent in 2016, and 3.5 percent in 2017. The unemployment rate should decrease to 12 percent in 2015 and continue to fall to 11.5 percent in 2016 and 10.2 percent in 2017. Employment is forecast to increase by 1.4 percent in 2015 and during the following two years it should continue to grow, by 1.1 percent and 0.8 percent respectively. 

With the inflation rate forecast to be negative at -0.3 percent for 2015, the central bank assumes that prices would resume their growth in 2016 forecasting the inflation rate at 1.7 percent in 2016 and 2.4 percent in 2017.
Real wages should grow 2.7 percent in 2015 to be followed by growth of 2.1 percent in 2016 and 1.8 percent in 2017.

Slovak diplomat Šefčovič likely to become EC Vice-president for energy union

Slovak diplomat Šefčovič likely to become EC Vice-president for energy union

Topical Issue

16.10.2014 15:10

European Commission President-elect Jean-Claude Juncker on Wednesday officially proposed that Slovak diplomat Maroš Šefčovič become the Commission's Vice-President for the Energy Union. Šefčovič's initially proposed portfolio of transport and space should now be taken up by the Slovenian candidate Violeta Bulc.

In his first reaction to the proposed appointment, Šefčovič said that he'll be primarily in charge of creating an energy union. "The current crisis between the EU and Russia concerning gas supplies shows that this problem is becoming highly important and strategic," stated Šefčovič. The Slovak diplomat and incoming European Commissioner for Energy Miguel Canete are taking up their posts just ahead of winter, when the EU in its talks with Russia needs to secure sufficient energy supplies for all member countries. Šefčovič noted that they need to prevent dependence on a single source and work rather towards diversifying sources of energy carriers, build a single energy market and remove obstacles that the EU currently faces in this area.

Maroš Šefčovič is one of the most experienced Slovak EU diplomats. He held the post of the vice-president of the Commission in the previous cabinet for 5 years. Slovak Prime Minister Robert Fico is very proud of the fact that Slovakia is likely to take up the European Commission's vice-presidency responsible for energy policy. "This is a highly strong position, a position that usually reserved for large countries", stated Fico. The composition of the new Commission Cabinet of Jean-Claude Juncker should be finalised by next month.

Porsche is making the car that is responsible for half its profits in Bratislava, reports the FT

Porsche is set to completely manufacture a car outside Germany for the first time, marking a departure from its proud brand claim that all its vehicles are “Made in Germany”.
Matthias Müller, Porsche chief executive, said on Tuesday that after 2016 the next generation of the Cayenne SUV – a vehicle that currently accounts for roughly half of Porsche sales – will be manufactured entirely in Bratislava, Slovakia.
The decision was taken as part of a reorganisation of production within Porsche and the wider Volkswagen Group.
Currently much of the Cayenne – including the bodywork – is made at a facility in Bratislava but the final assembly takes place in Leipzig.
Most German carmakers have long since abandoned the idea of producing all their vehicles in Germany and have opened production facilities overseas to be closer to fast-growing markets.
However, Porsche – maker of the 911 sports car and Panamera saloon – had partly resisted that trend because the “Made in Germany” label was considered a core part of its corporate identity and marketing.
Car buyers in emerging markets are prepared to pay a premium for German, UK and Italian engineering, and premium carmakers therefore tend to have reservations about setting up overseas.
For example, VW spent £800m last year to upgrade its factory in Crewe and keep Bentley models “Made in Britain”, rather than building its new SUV model in Slovakia, which would have been cheaper.
Fiat, owners of Porsche competitors Maserati, have also pledged to invest in their Italian factories to ensure that the sports car brand remains Italian-made, despite cost worries. Companies such as Rolls-Royce and Ferrari make their national identity the centrepiece of their sales pitch.
VW’s Bratislava plant produces the VW Group’s large SUVs such as the Touareg and Audi Q7. Therefore VW stands to derive significant synergy and time savings by manufacturing the Cayenne in its entirety in Slovakia, where labour costs are also lower.
Mr Müller said that for customers the decisive factor is that all Porsche vehicles will continue to be designed and engineered in Germany and noted that within the VW Group all production locations have to achieve the same high standards.
Porsche sales jumped last year by 15 per cent to more than 162,000 vehicles and it has become a big generator of profits for VW. Porsche is expected to be boosted further later this year when it launches the Macan compact SUV.


Chinese carmaker eyes Slovakia

Chinese electric cars to be made in Slovakia. The name of the company is BYD China. “This carmaker is
negotiating with a Bratislava-based company which would develop electric cars for them,” Marián Farkaš, head of the Chinese Chamber of Commerce in Slovakia (Sinaco) told the Hospodárske Noviny (HN) daily.

He added that Slovaks are clear favourites for BYD, with no other companies being addressed for now. In case the Chinese automotive producer agrees with the Slovak company, dozens of new jobs in development will be created and hundreds of thousands of euros invested, HN wrote on January 16. BYD already produces re-chargeable accumulators. Its existing electric vehicles have started to appear in Europe.


Suburbia is a failure, just rent in the City says study

Suburbia in Central Europe

The 'burbs have left their mark on Central Europe and a two-year project is making an effort to help bring them to life

© Culburb
Is it science fiction or a savior for suburban sprawl? One among 4 interventions to be realized in the Prague suburb of Psáry, Urban Farming Objects (UFO) will see 4 hens land in a UFO in the community, which inhabitants will build a hen house for and learn to care for, creating an opportunity for an ongoing community project

Dead suburbia is alive and (barely) kicking in Central Europe. In localities outside of the region's capital cities–where, in contrast, citizens are more actively engaged in the "fight" to improve their urban space–the communities are stagnant or sleeping.

In Psáry, located 7 km south of Prague, inhabitants who found themselves with fatter wallets in the 1990's and flocked to their newly built homes on the outskirts of the city have found that their Czech version of the "American Dream" hasn't lived up to their expectations. Working in Prague throughout the day they only return to their cookie-cutter homes at night where they peer out at a community their unfamiliar with, having no relationship with their neighbors since, along with rarely being there, the community is without shops, schools or other forms of infrastructure keeping them dependent on the city.

In Vienna's Sandleiten, a public housing project built after the First World War between 1919-1934, barriers exist between the old inhabitants and the younger, immigrant newcomers. What upon first impression looks like an idyllic community–it's clean, quiet, full of flowers and trees–is something of a dead zone.

© Culburb
Psáry, located 7 km south of Prague, is the Czech version of the 'American Dream' gone bad

In Rajka, located 20 km from Bratislava on the border between Austria, Hungary and Slovakia, people from Bratislava who followed the movement in the last ten years to settle down there–taking advantage of Rajka's proximity to the city–are disconnected to their community as their commuter lifestyle leaves them little time to actually live there. As well, local industry has shrunk and the Hungarian population who are dissatisfied with poor transport links to their home country and wish to take advantage of high property market sales as a result of a land use change from agricultural to suburbia are moving out.

In an effort to bring the region's issue of suburbanization and sprawl to light and help take some first steps toward positive change, Prague's Center for Central European Architecture (CCEA) in collaboration with six like-minded organizations from Central Europe began a two-year project in the spring of 2011 called Culburb. Derived from "Cultural Acupuncture Treatments for the Suburbs," Culburb's manifesto, as stated on their website, is to "activate the public realm in the suburbs of regional capitals through acupuncture interventions." In essence, through small actions they hope to contribute to bringing these suburban communities (back) to life.

© Culburb
Presented at Psáry's first community farmer's market in May, Culburb's acupuncture intervention "Budget 50,000" invites Psáry's inhabitants to propose ideas for how to use 50,000 crowns toward bettering their community. A vote by the people will decide which idea gets realized.

"The ultimate goal of the project is to start at a local level, to start something new and to make some of the problems visible," Klára Mergerová, a project coordinator for the project from CCEA, told Czech Position. "[Through the project we would like to help] make a new environment for the inhabitants, to attach them to their environment."

The project's main component began after Culburb's first six months–a preparatory phase–during which the organizers held several workshops where they presented their ideas and discussed the topic of suburbia in Central Europe in general. Collectively they came to a decision to launch an open call in November of 2011 inviting architects, artists, urban researchers and activists as well as anyone interested in the topic, to submit proposals for interventions (with no limits on form, but only with the requirement that the interventions should "embrace the complex social and political situation, as well as the multi-layered character of the district's problems") in six specific localities. Four proposals for each location would be chosen and realized.

© Culburb
Taking advantage of its proximity to the city, former inhabitants of Bratislava have set up house in the suburb of Rajka over the last ten years. However, with little time to spare for daily life there, these "commuters" sleep there rather than live there.

Along with Prague's Psáry, Vienna's Sandleiten and Bratislava's Rajka, the chosen localities included Warsaw's Ursus, Ljubljana's Zalog, Budapest's Delegyhaza and a second locality in Bratislava: Rosovce (the two Bratislava based localities are counted as one as they are in extremely close proximity to one another). Each, in their own unique way, "represent the typical suburban locality," says Mergerová, for that particular country and capital city.

Receiving 220 proposals from candidates from around the world, each of the six organizers made their own pre-selection of approximately 15 proposals before gathering in Prague to choose the four winners for each locality. In total, thirty projects will be realized as the organizers from each location will realize their own proposals as well.

For Prague's Psáry, the four chosen interventions include "Budget 50,000," which comes from Czech graphic design studio Labortory. This intervention leaves it up to the inhabitants to decide what they will do with 50,000 crowns. Advertised in Psáry's monthly community newsletter and at the community's first farmer's market where Culburb set up their own stall, inhabitants have the opportunity to propose their ideas about what to do with the money. The community will then vote on the best proposal and it will be realized.

© Culburb
Located 25 km from Budapest's center, the suburb of Delegyhaza faces the issue of barriers between old inhabitants and newcomers and competing public and private land interests.

In an effort to bridge an existing divide between Psáry's old inhabitants and its newcomers, Slovak couple Martin Rusina and Anezka Tkacikova's "Cross-Finding Game" will begin with collecting stories and oral history connected to the culture of Psáry from its older inhabitants. This information will then be organized into a game for the children of the newcomers. "Trail of Courage," the work of three Czech art students, borrows from the tradition of educational paths with freestanding informational signs in Czech forests, but, instead of signs about flora and fauna, these paths will bear information about the history of the community and issues of sprawl in an effort to educate and create a dialogue.

From a German architect and artist team, "Urban Farming Objects" or UFO will see the landing of a UFO in Psáry. Emerging from the suburban spacecraft will be four blue-egg-laying hens (the hens actually lay blue eggs by nature). On site, the organizers will teach the children and other members of the community how to care for the hens and together they will build a hen house. Once the organizers leave, it will be up to Psáry's inhabitants to care for the hens, creating the opportunity for an ongoing community project.

cool article about a dusty remnant of socialist propaganda

cool article about a dusty remnant of socialist propaganda
its appropriately reported on by an instrument of capitalist propaganda also known as the Daily Mail.