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Slovakia 'viewed euro as a saviour'

20 August 11 00:00
Square in Bratislava
By Paul Moss
The World Tonight, Bratislava

The eurozone crisis and need to bail out Greece has been fuelling resentment in other European countries including Slovakia, a nation that was originally very much in favour of joining the European Union.

The man at Volkswagen gave the official company line on euro membership - why the euro was good for Slovakia, why it encouraged investment.

But Vladimir Machalik could not resist chipping in with his own personal feelings.

"Volkswagen is the biggest exporting company in the country, and for us it's really important to have the euro. The elimination of exchange volatility allows us to make long term plans, without this up and down of the Slovak crown."

And then Mr Machalik smiled the smile of a man who was born under a Soviet-dominated system.

"During the Communist times, it was really hard to travel… now I can travel round Europe. I don't have to exchange money all the time. It's freedom."

There was a time when this kind of euro-enthusiasm was universal in Slovakia.

This country is used to being poor, to being considered a second-class economy even within the Eastern bloc.

Then Slovakia was invited to join the euro in 2009, ahead of its richer rival the Czech Republic, ahead of its neighbour Hungary, and ahead of larger countries like Poland.

"We felt proud," said Maria, a pensioner living in the centre of the Slovak capital, Bratislava. "At last we had a good currency."

But Maria is not happy about what euro-membership now entails.

All eurozone members will be asked to contribute to the European Financial Stability Facility, to help countries that risk bankruptcy - countries like Greece, or perhaps Spain or Portugal.

Yet Slovakia is still listed as the second-poorest country in the eurozone.

Maria said she did not see why she and other Slovaks should effectively be handing over money to people who have wealthier lives than she can dream of.

"People in Slovakia have been through a very hard time since 1989.

"A lot of industries disappeared, because capitalism did not need them. Our unemployment rate was high, and well-educated people could not find work.

"And after all this we went through, we are told to give money to Greece because they are in a bad situation. We are not in a good situation either."

Maria is not alone.

Polls suggest that the majority of Slovaks do not want their country to contribute to the bailout fund.

And they have support in Parliament from the MP Jozef Kollor, a leading light in the Freedom and Solidarity Party.

"We also have an austerity programme, in Slovakia," he said.

"We are cutting public sector wages, we are increasing some consumer taxes… and to then lend money to peripheral economies like Greece? The majority of people will never agree to that."

Jozef Kollor is unhappy too about the latest proposals from the German Chancellor, Angela Merkel and French President, Nicolas Sarkozy.

They have suggested eurozone countries should agree to more coordination of their budgets, and of fiscal policy generally.

"It's a step towards being the United States of Europe," he warned.

Mr Kollar's views may go down well with the Slovak public, but they are certainly not the view of the government, in which his party serves as a coalition partner.

Indeed, both the largest party in the ruling coalition, and the main opposition party have indicated they will support contributions to the bail-out fund.

"There is no alternative," said Slovakia's foreign minister Mikulas Dzurinda. "We joined a club, so now we are speaking about protection of our common currency, about the future of the club."

But Mr Dzurinda is angry at Greece and other countries that have allowed their deficits to balloon out of all control.

He blames European officials who allowed it to happen without punishing Greece for breaching eurozone rules. Yet he insisted this was not the time to let such backsliding nations go to the wall.

"We want to be loyal to members of the club we joined."

Despite all these troubles, Slovaks seem to have no real regrets about joining the European Union, or indeed the euro.

They will complain bitterly about the restrictions and requirements it now entails, but then glow with pride the next minute, and talk delightedly about how they now use the same currency, the same notes and coins as a country like Germany.

If all this sounds just a little contradictory, then we should not be surprised, according to Juraj Karpis, from Bratislava's Institute of Economic and Social Studies.

Juraj Karpis argued that his fellow countrymen's attitude to the euro was never rational in the first place.

"We had our own currency crisis in 98," he said. "So people viewed the euro as a saviour… it was a religion. The people who were against the euro were viewed as traitors."

Mr Karpis smiled at the thought of this past foolishness, as he sees it.

"Now people see all the problems of the euro, they see that European politicians are not saints. This euro religion is getting huge cracks."

The World Tonight is broadcast weekdays on BBC Radio 4 at 22:00 BST.

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