2003年-世界发展银行全球_Slovak_Republic--Joining_the_EU___A_Development_Policy_Review_202页_1mb

Slovak Republic - Joining the EU: A Development Policy Review Summary

Core Content

This document is a World Bank Country Study focused on the Slovak Republic's economic challenges and opportunities in the context of EU accession. It outlines a comprehensive 11-point agenda for immediate policy actions and a longer-term strategy to reform major spending programs in the areas of education, health, and social protection. The report emphasizes the need for governance improvements in budgeting, decentralization, and the justice system to ensure the success of these reforms.

Main Points

Economic Performance and Challenges

• In 2002, the Slovak economy had its best performance since the 1998 financial crisis, with 4% GDP growth and 2% private sector employment growth.
• Despite this recovery, macroeconomic imbalances resurfaced, including fiscal and current account deficits at ~8% of GDP and over 18% unemployment.
• The external environment and forms of external financing have evolved since the pre-1999 period, with a focus on structural reforms over over-investment.

Key Policy Agenda

• Curtail enterprise subsidies and non-CAP compliant agricultural support, including reducing transfers to railways.
• Redirect existing expenditure programs to meet structural fund eligibility and support growth in Bratislava.
• Increase retirement age to 65 to ensure sustainable public pensions and avoid future fiscal deficits.
• Postpone revenue reductions in the pre-accession economic program until expenditure cuts are realized.
• Rebalance the tax burden by reducing payroll taxes and increasing other tax bases, such as VAT refunds and taxing windfall gas profits.
• Increase electricity and natural gas tariffs with lifeline blocks for low-income consumers.
• Use privatization receipts to retire foreign debt, not domestic.
• Privatize power generation and unclaimed land.
• Reduce labor market rigidities through revising the labor code, reforming the minimum wage, decentralizing collective bargaining, and redesigning social assistance benefits.
• Remove bottlenecks in debt resolution procedures to enable bank lending to SMEs.
• Reduce internal trade barriers within the Czech-Slovak Customs Union before EU accession.

Longer-Term Reforms

• Social Protection: Shift to a fully-funded second pillar pension system, merge health insurance companies, improve cost sharing, and activity tests.
• Health: Contain excess demand through benefit adjustments, increase provider efficiency, and ensure equal access to health services, especially for the Roma community.
• Education: Consolidate primary and secondary education through rationalization programs, reorient secondary education to meet labor market needs, and use cost savings to improve quality and expand tertiary education.

Governance Framework Enhancements

• Improve fiscal planning by transforming medium-term and program budgeting into effective tools.
• Consolidate decentralization to ensure accountability mechanisms are in place before further devolution.
• Reform the justice system to professionalize court management, investigate and prosecute corrupt judges, and strengthen legal profession regulation.

Key Information

• The report highlights that Slovakia's unemployment rate is among the highest in the CEECs, and employment rate is one of the lowest at 50% of the working age population.
• The fiscal deficit is unsustainable at ~8% of GDP in 2002, despite recent declines.
• The capital account has a surplus of ~20% of GDP, which may help finance deficits but is not a long-term solution.
• The growth of the Slovak economy is driven by structural reforms, including enterprise restructuring, financial sector reforms, and trade integration.
• EU accession provides a window of opportunity to address remaining challenges and implement reforms.

Conclusion

The Slovak Republic's path to EU accession requires immediate and long-term policy actions to address fiscal sustainability, employment, and structural reforms. The success of these reforms depends on enhancing governance and institutional capacity, particularly in budgeting, decentralization, and justice system reform. The report serves as a development policy review to guide the Slovak government and the development community in navigating the transition to EU membership.