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Slovak Government indulges in corruption

by / 1 Comment / 30/12/2016

This November, the Slovak Prime Minister Robert Fico, gained international coverage for reasons other than the Slovak Presidency of the EU. In light of another corruption scandal that his government faces, the PM finally vocalized his presumably long-held view of the Slovak media, calling them ‘dirty, anti-Slovak prostitutes’.

 

Mr Fico always had a complicated relationship with the media, often refusing to speak to journalists critical of his politics. In public, Mr Fico reacts to criticism aggressively, attempting to portray himself as being under attack from an opposition-incited, media-led smear campaign, in an attempt to divert attention from his party’s scandals and declining popularity.

The legacy of corruption in Slovakia dates back to its first Prime Minister — Vladimir Meciar, who secured Slovak independence from the Czech Republic 23 years ago. During his autocratic tenure, Meciar was suspected of instigating the abduction and torture of President Kovac’s son, who was his political adversary. Subsequently, Ivan Lexa, the former head of the Slovak Intelligence Agency who conducted the operation, was caught by Interpol after fleeing to South Africa. The then acting President Meciar, who seized the presidency in 1998 for eight months, issued an amnesty which covered Lexa and allowed him to avoid prison.

Today, corruption in Slovakia mostly relates to government contracts. In 2011, the so-called Gorilla scandal unveiled files pertaining to a wiretapping of a flat by Slovak intelligence between 2005 and 2006, where top government officials discussed kickbacks in exchange for privatisation and procurement contracts.

While the original audiotapes were never released, the scandal sparked a wave of protests that achieved very little in terms of change. Representatives of the Penta Group implicated in this scandal continue to be influential in the government, with Prime Minister Fico’s party Smer-SD closely linked to it too.

Prime Minister Fico’s party has been implicated in numerous scandals over the years, the most medialized being the involvement of Interior Minister Robert Kalinak in business deals with Ladislav Basternak, who is accused of falsely claiming over €8 million in tax returns. The National Crime Agency, which is headed by the Interior Ministry refused to prosecute Mr Basternak, despite the fact that investigators from the Finance Ministry launched a criminal complaint against him.

Kalinak’s personal involvement came to light when a bank employee affiliated with a major opposition party leaked the minister’s bank details, which indicated that he received €260,000 from a company formerly owned by Mr Basternak. Despite calls for his removal, Kalinak retains his position as Interior Minister after coalition partners supported Kalinak’s claims of no wrongdoing.

Despite the Prime Minister’s categorical refusal of government corruption, claiming these scandals are a product of an opposition smear campaign, Transparency International and the World Economic Forum show otherwise. In the 2016-2017 corruption index produced by the WEF, Slovakia was ranked the second most corrupt country in the world after Mexico, with political corruption being noted as the most important concern.

In their problematic factors for doing business graphs, the WEF lists corruption as the top problem for businesses, with a rating of 19.2. In comparison, corruption in neighbouring Austria is listed at second to last place, with a rating of only 0.2.

Likewise, Transparency International, which spoke out against the latest scandal relating to misappropriation of funds on the Ministry of Foreign Affairs, ranks Slovakia at 50th place in their Corruption Perceptions Index — which is one place above Malaysia and below Saudi Arabia. In comparison, Germany and the United Kingdom rank 10th on the same table, while the Netherlands are situated at 5th place.

Economically, Slovakia is inhibited by high levels of corruption, which negatively affects the economy. The potential of Slovakia to become an economic powerhouse of Central Europe is apparent from its consistently high levels of GDP growth. In 2007 it was at an all-time high of 10.7 per cent, according to the World Bank. However, this level of growth would need to be utilized by creating a fair, competitive business environment on all levels — something that is yet to be realised.

Corruption also affects Slovakia politically, as it creates the perception that corrupt politicians and business leaders can abuse the system without consequences. This erodes public trust in politics and gives way to the rise of previously-fringe extremist groups. In Slovakia, this manifested in the 2016 General Election, when the fascist anti-establishment LSNS party, led by Marian Kotleba, gained a total of 8.04 per cent of the vote, seizing 14 seats in Parliament. Currently, as more corruption scandals continue to surface, the fascist party is gaining strength, with November polls conducted by AKO agency placing LSNS close to 10 per cent.

If Slovakia is to become a truly modern and Western country, corruption would have to be stomped out. As a small country still recovering from the economic inadequacies of 41 years of socialist rule, the main focus of the Slovak Government should be on economic growth.

The peak of Slovak economic performance in 2007 was a result of progressive reforms by Prime Minister Mikulas Dzurinda, who instituted a flat tax of 19 per cent, resulting in a consistent rise in GDP growth throughout his entire eight-year term.

Much of this was undone by his successor, Prime Minster Fico, whose populist agenda led to progressive income taxation and a corporation tax increase by 4 per cent in 2014, resulting in GDP growth stagnating below 5 per cent annually.

It is apparent that socialist policies would have to be abandoned in favour of a market-based approach, in order to achieve economic growth in Slovakia. Currently, the best chance of that lies in the next General Election in 2020. Whether the opposition will succeed in wresting control of the government will largely depend on how many more corruption scandals Prime Minister Fico’s party will have to tackle and how he chooses to handle them.

 

Sources:

http://dennik.hnonline.sk/ekonomika-a-firmy/528984-slovensko-zlomilo-rekord-a-pokorilo-krizu

http://preferencie.teraz.sk/

http://www.transparency.org/country#SVK

https://www.transparency.org/cpi2015/

http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?year_high_desc=false

http://medialne.etrend.sk/tlac/fico-niektori-novinari-su-spinave-protislovenske-prostitutky.html

http://www.tradingeconomics.com/slovakia/corporate-tax-rate

http://www.tradingeconomics.com/slovakia/gdp-growth

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Matej is a graduate of the English College in Prague. He is very passionate about politics, war and international relations. In 2015, Matej moved to London to pursue higher education, starting his BA in War Studies course on King's College in September. A fervent liberal, Matej is very passionate about individual rights and liberties and enjoys discussing issues related to this. He also loves pizza.

  • Igor Mat-O´-Vic

    Good article