Woefully Unprepared

Car production has been a boon to the Slovak economy for the past two decades but could become a liability as the country’s cost advantage erodes and automation proceeds. Slovakia needs sustained investment into human capital

The recent parliamentary elections in Slovakia were definitely not about “the economy, stupid.” High-profile corruption scandals under the watch of the left-populist Smer (Direction), in power for a better half of the past 15 years, the rise of neo-Nazis and divisive cultural questions dominated the campaign instead of bread and butter issues.

The emerging centre-right coalition, led by the maverick politician Igor Matovič, whose party went up from polling at around 8 per cent in December last year to winning the elections decisively with 25 per cent of the vote, promises clean governance as well as more direct democracy and radical transparency in government.

The fallout

Nevertheless, economic matters are the most immediate stumbling block for the new government. With the fallout from the COVID-19 epidemic, characterized by the OECD as “the gravest threat since the financial crisis,” the economy will struggle to meet the 2.7 per cent growth rate projected by the IMF. With monetary policy in the hands of the European Central Bank, the new Slovak government will find itself with few tools at its disposal when adverse economic circumstances assert themselves.