In Slovakia people still live within their means, it not only the extreme proximity in distance between Vienna and Bratislava, its also a healthy scepticism about getting in debt. Like our viennese neighbours, Slovakia as a whole has very conservative banks (many of them austrian) that lend frugally and expect big deposits before agreeing to finance a mortgage. Here the banker is somebody you meet in an office, rather than a trainee call centre person in Wales assessing your tele-loan because you saw an aspirational ad on TV (like it is the case in the UK).
It seems that there is going to be an impact worldwide from this mess (including China and India), but i still believe this little corner of the world is more stable than most. The factors that make it so are briefly:
- Slovaks did not get in the habit of spending more than they earn
- There isn't a big rental or buy to let sector, people live in their homes.
- People have a 1950es style frugality, and aversion to waste and excesses.
- consumer indebtendness is circa 16% of GDP as opposed to 90%+ in western europe.
- real wages are growing every year, when in the rest of the developed economies they have been stagant or near stagnant.
- All our banks are well capitalised, and have zero exposure to american debts/CDOs/CDS/derivatives/asset backed securities and toxic loans.
- The central banker Ivan Sramko is a seasoned austrian-trained banker with a steady hand.
- We are getting the euro unlike any other central european country.
- EU money will continue to flow from the structural funds and CAP to Slovakia giving the country another useful boost.
- Government debt in Slovakia is a tiny less than 30% of GDP.
Hope you re alright wherever you are.
remember that all this means that Thatcherism/Reaganism is now dead. Shareholder capitalism ditto.