Slovakia

In its 1999 Regular Report, the Commission concluded that Slovakia fulfilled the political criteria. Since that time, the country has made considerable progress in further consolidating and deepening the stability of its institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities. Over the past year, further efforts have been made in this direction. Slovakia continues to fulfil the Copenhagen political criteria.

Significant progress was achieved with regard to the structure and functioning of the administration. The legal framework for the decentralisation of public administration was adopted, and so was the civil service law. Due implementation of the legislation is now required to ensure that the public administration adequately fulfils the key role it has to play in a functioning democracy based on the rule of law and in support of the accession process.

Important steps were taken to strengthen the independence of the judiciary. In particular, the constitutional amendment abolished the four­year probationary period for judges and provided for setting up a Judicial Council. This amendment now needs to be implemented by primary legislation and at a practical level to guarantee the judiciary's professional impartiality and political neutrality.

Further progress can be noticed in the fight against corruption, notably in translating and implementing the government policy into concrete actions and transposing international obligations. Corruption, however, remains a serious cause for concern. In order to continue improving the fight against corruption Slovakia should rigorously carry on the implementation of the action plans, strictly enforce existing legislation and complete planned legislation as well as strengthen administrative capacities and co­ordination among the bodies involved.

The constitutional reform also created the basis for the strengthening of Slovakia's institutional structure in the field of human rights. However, there is a need to address police behaviour, notably with regard to reported cases of ill­treatment

Significant efforts in further developing and putting into practice approaches to protect minority rights were taken in the reference period, notably in implementing relevant Government strategies. Positive steps were achieved towards enhancing the use and protection of minority languages. As regards the Roma minority, the implementation of the Roma strategy, adopted subsequently in 1999 and 2000, should be further enhanced and the appropriate financial means at national and local level should be made available. In this context it will be important to improve efforts to fight against widespread discrimination.

The short term priorities of the 1999 Accession Partnership related to the modernisation and decentralisation of the public administration were fulfilled. Important steps were taken in strengthening the independence of the judiciary, which constituted a short term priority, as well. Despite further positive measures, tangible improvement of the situation of the Roma minority, another short term priority, was achieved only to a limited extent. So were the medium term priorities for the political criteria of the 1999 Accession Partnership, calling for continued implementation of minority language legislation and strengthening policies and budgetary means towards the Roma minority.

Slovakia is a functioning market economy. Provided that it makes further substantial efforts in medium term fiscal consolidation and in developing and fully implementing the announced structural reform programme, it should be able to cope with the competitive pressure and market forces within the Union in the near term.

Overall, macroeconomic stability has been maintained. There has been further good progress in bank privatisation, which is nearing completion. Further progress was also made in restructuring and towards privatisation of the remaining state­owned utilities and transport enterprises. Further progress was made in setting the framework for private sector development.

However, the substantial widening in the current account deficit will require a more prudent fiscal policy stance. Unemployment is high and rising. Some parts of the legal and institutional framework for enterprise development are in need of further improvements and effective implementation. Financial sector supervision has to be further strengthened. Steps must be taken to ensure the medium­term sustainability of public finances. The authorities need to comply with their fiscal targets, by implementing medium­term public expenditure reforms, in particular in the health, pension, and subsidy areas. Macroeconomic stabilisation will need to be consolidated by a continued prudent combination of fiscal and monetary policy. Further progress in privatisation, in the administrative and legal framework and in financial sector reforms will set the stage for future private sector development. Growth in employment will further require fundamental reforms of the labour market.

Slovakia has continued to make good progress in legislative alignment with the acquis. As last year, progress has not been uniform across chapters. Significant progress has been achieved in areas such as free movement of goods, company law, social policy and employment as well as customs union. Structural weaknesses have persisted in a number of sectors, namely in agriculture as well as regional policy and co­ordination of structural instruments. While further progress in strengthening administrative capacities was made, reinforced and sustained efforts are needed across all sectors.

Concerning internal market legislation, further progress has been achieved, notably in free movement of goods and free movement of services. In the area of free movement of persons, progress continues to be limited. In company law, with the exception of trademarks, significant legislative progress has been made, especially through further alignment with the company law directives and adoption of a new patent law. Appropriate strengthening of administrative and judicial bodies involved in all areas of intellectual and industrial property rights should be continued. In competition policy the amendment to the Act on State Aid has brought the legislative framework largely in line with the acquis. In contrast to the anti­trust area, however, the enforcement record in the field of state aid remains rather sketchy and non­transparent. Administrative capacities in the internal market domain need reinforcing, in particular as regards the supervision of financial services.

As regards agriculture, overall steps both in aligning and implementing the acquis have been limited with the exception of veterinary issues, where significant progress was made. Efforts should be reinforced to establish an Integrated Administration and Control System, the adoption of specific market regulations should be accelerated, alignment in the phytosanitary sector speeded up and administrative capacities, including border inspection posts, strengthened.

Further legislative alignment was achieved in the field of transport, notably in relation to land transport. Substantial alignment across all sectors and reinforcement of the administrative capacities, including completing the setting­up of the necessary structures is, however, needed.

Limited legislative alignment of indirect and direct taxation has been accomplished and additional efforts are required for adjusting VAT and excise duty rate levels. The reform of the Slovak tax administration has moved forwards, the measures for its modernisation should be vigorously pursued. The IT tax information systems allowing for the exchange of electronic data with the EC and its Member States should be developed.

Further positive steps have been taken in the energy sector with the decision to substantially open the domestic electricity market and the launching of the privatisation of major energy companies. As regards nuclear energy, Slovakia should implement its decommissioning commitments, and continue to ensure a high level of nuclear safety. In industrial policy, Slovakia kept its reform momentum by continuing privatisation, particularly in banking privatisation, and enterprise restructuring. With the exception of postal services, Slovakia has reached an overall high degree of alignment in the area of telecommunications and information technologies. Emphasis should now be put on the effective implementation and strengthening of administrative capacities. Legislative alignment in the field of consumers protection, notably on non­safety related issues, has continued. Efforts to ensure adequate co­ordination and strengthening of those bodies involved in market surveillance need to be continued.

In the field of social policy and employment, considerable progress has been achieved notably in further aligning with the acquis in the area of labour law and equal treatment for women and men. The focus needs to move now to the implementation, with a particular emphasis on the enforcement of health and safety at work.

Progress in the field of regional policy and co­ordination of structural instruments has continued to be limited. The lack of sufficient and qualified staff in the relevant ministries and bodies involved remains a matter of concern.

Concerning environment, legislative alignment - with the exception of water quality, nature protection and industrial pollution and risk management, has well advanced although substantial alignment is still lying ahead. The measures to strengthen the administrative capacities should be rigorously pursued.

In the area of co­operation in the field of justice and home affairs, further progress in terms of alignment and administrative capacities has been achieved notably with regard to external border control by, inter alia, adopting a Schengen Action Plan, as well as in the fields of visa policy and police co­operation. Considerable progress in all relevant areas is needed, including reinforced efforts for strengthening administrative capacities.

Considerable steps were taken in the area of customs union with the entering into force of the new Customs Act and the Act on State administration bodies in the field of customs. IT systems allowing for the exchange of computerised data between the EC and Slovakia should be developed. Significant progress can be reported in the area of financial control, where the basic legislative framework for public internal financial control and external audit is now in place. Particular emphasis should be put on the area of control over structural action expenditure and protection of EC financial interests.

As regards administrative capacities, while good progress was made in a limited number of domains in strengthening the relevant institutions, overall progress in this regard has been limited. Whereas considerable progress has been achieved in the areas of free movement of capital and customs union, little progress can be reported notably in agriculture, transport policy, regional policy and co­ordination of structural instruments as well as co­operation in the fields of justice and home affairs. As regards enforcement, more efforts should be invested particularly in the areas of company law, competition policy, as well as social policy and employment. The positive momentum reached in strengthening administrative capacities in the areas of taxation, energy and environment should be maintained. The institutions and mechanisms related to the efficient and controllable management of EC funds needs to be considerably strengthened.

The decision of the Government to increase the number of staff dealing with EU integration by approximately 1 200 persons by 2002 is a welcome step necessary to strengthen the overall still weak administrative capacities.

The short term priorities of the 1999 Accession Partnership have been met to a large extent in the field of internal market and social policy and employment; they have been partially met in the area of energy as well as co­operation in the fields of justice and home affairs and only to a limited extent in agriculture and environment. All medium term priorities have been partially met, with the exception of transport policy, regional policy and co­ordination of structural instruments as well as environment, where priorities were fulfilled only to a limited extent.

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