Commission Report 2002 (Slovakia)

• Progress since the last Regular Report
• Overall assessment
• Conclusion

Chapter 11: Economic and monetary union

Progress since the last Regular Report

A detailed assessment of the various aspects of Slovakia's economic policy has been given above, in the Chapter discussing the economic criteria (B-2). Therefore, the present section is limited to a discussion of those aspects of the Economic and Monetary Union acquis -as defined by title VII of the EC treaty and the other relevant texts- which candidate countries should implement by accession, i.e. the prohibition of direct public sector financing by the central bank, the prohibition of privileged access of the public sector to financial institutions, and independence of the national central bank. As to the process of liberalisation of capital movements, upon the completion of which compliance with the EMU acquis is conditional, this aspect has been covered above, in the section on Chapter 4 - Free movement of capital.

Since last year's Regular Report, no further progress was to be reported in the area of economic and monetary union as Slovakia had already fulfilled the requirements as regards the independence of the central bank, the prohibition of direct public sector financing by the central bank, and the prohibition of privileged access by public authorities to financial institutions.

Overall assessment

Slovakia will participate in EMU upon accession with the status of a country with a derogation under article 122 of the EC treaty. It will need to implement the necessary changes to its institutional and legal framework by the date of accession.

Slovakia's legislation is now in line with the acquis in this area, notably as regards aligning the National Bank's statutes, the prohibition of direct public sector financing by the central bank, and the prohibition of privileged access by public authorities to financial institutions.

There has been little progress in upgrading Slovakia's administrative capacity to carry out medium-term fiscal planning and fiscal reporting. Further strengthening of the appropriate expert departments at the Ministry of Finance will be required to ensure that there is sufficient capacity to cover issues of domestic economic policy in the EU environment.

Conclusion

In its 1997 Opinion, the Commission concluded that Slovakia's central bank was largely independent from the government in terms of the appointment procedure of the governor and of the conduct of monetary policy and that Slovakia had a sound fiscal record, which has implied no financing of the budget deficit.

Since the Opinion, Slovakia has made further progress in the areas of the chapter and has, overall, achieved a high level of alignment with the EMU-related acquis.

Negotiations on this chapter have been provisionally closed. Slovakia is generally meeting the commitments it has made in the accession negotiations in this domain. Slovakia has not requested any transitional arrangements in this area.

In order to complete preparations for membership, Slovakia's efforts should focus on strengthening the administrative capacity of the Ministry of Finance along the lines set out above.

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