NEW REGIONAL DIVISION
The government approved a bill regarding the regional division of Slovakia (8 regions with 74 districts). The new regional division will cost 1bn SK in 1995 year and 3 bn in next year.
BOND PRIVATIZATION
The government approved rules for using FNM bonds in the so called bond privatization.
The government also set the market minimal price for the bond, which is 75% of its nominal value (7.500 SK).
The bonds could be sold before their maturity date to certain banks which should be restructured, could be used for reduction of the liabilities towards Fund of National Property or the State Land Fund, for buying a flat or for supplemental health and retirement insurance.
The trading with bonds will be technically organized by RM-System Slovakia.
MINIMUM WAGE
Parliament passed an increase in the minimum wage to 14,60 SK per hour, and 2.700 SK per month for employees receiving their wages monthly effective from 1 April 1996
MINIMUM PENSION
Parliament passed a 12% increase in the retirement pension, effective June 1, 1996.
SUPPLEMENTAL RETIREMENT INSURANCE
Parliament passed a supplemental retirement insurance law. Insurance payments will be deductible up to certain limits.
PROTECTION OF CITIZENS' DEPOSIT
Parliament passed a law protecting citizens' deposits.
Citizens' deposits in regular banks will be guaranteed up to 30 times the average monthly salary for the previous year (approximately 215.000 SK for 1995), and in Building Savings Banks, up to 60 times the average salary.
The law lays out equal conditions for all banks.
Gradually, an increase in the limit guaranteeing deposits to the European standard (15-20 thousand ECU) is expected.
REDUCING RENTAL PRICES FOR INTERNET
Slovak Telecom is preparing to reduce its rental prices for its internal digital circuit by 20%.
Slovak Telecom is also looking into providing Internet services directly through its own network.
The Internet market in Slovakia has yet to become saturated.
FREE TRADE ZONE WITH ESTONIA
The cabinet approved a proposal to create a free trade zone with Estonia.
This is a part of a plan to create a free trade zone with 150-200 million people including CEFTA, the Baltic states, Israel and Turkey.
The Ukraine and Russia have shown interest to be included too.
ENVIRONMENTAL LEGISLATION
The Minister of Environment, J. Zlocha, announced that in the environmental field 80% of Slovak legislation is in accordance with EU standards (only 65% in the Czech Republic).
MONETARY DEVELOPMENTS IN 1995
Slovakia's M2 money supply increased 21% (62.4bn SK) to 357 bn SK.
Citizen's deposit in foreign currencies increased only 1.3bn SK, which reflects their high trust in the Slovak crown.
Domestic loans denominated in SK grew 13.7% to 311bn SK, and their interest rates declined by 1.27%. The interest on short-term loans fell by 2.54%.
INSOLVENCY OF SLOVAK COMPANIES
According to February research by the Statistical Bureau, 645 of Slovak industrial companies were insolvent due to unpaid receivables (inter-business debt) and 4% were insolvent (liabilities higher than assets).
INCOME AND EXPENDITURES
Current household income increased 7.9% in real terms in Slovakia last year compared to 1994, totalling 403.9bn SK. The average net income per family member was 3.440 SK (a real increase of 8.2%) and net expenditures were 3.240 SK (an increase of 7.5%). Cost of living expenditures increased 9.4% in average.
The content of this article is intended to provide a general guide to the subject matter. It is therefore not a substitute for specialist advice.
For further information contact Richard Fletcher, Arthur Andersen, Prague, Tel +42 2 2440 1300, or enter a text search 'Arthur Andersen' and 'Business Monitor'.
See More Popular Content From