Social dialogue in the candidate countries

Social dialogue and EMU in Cyprus, Czech Republic, Latvia, Lithuania and Slovakia - Workshop

Vienna, 26-28 May 2003

Discussion paper - abstract - Jan Kosta
Researcher, Institute of Slovak and World Economies, Slovak Academy of Science

Social dialogue and EMU in Slovakia

The main objective of this paper is to briefly characterise the economic development and the main economic problems in Slovakia, and the consequences that might arise from the existing economic development in the field of industrial relations. The aim is not only to describe the previous development, but also to prepare the discussion for the social partners and for the European experts on the potential problems, risks and outcomes of maintaining or affecting social reconciliation respectively. In view of the fact that in Slovakia economic reforms aimed at increasing the competitiveness of the economy have not yet been completed, the possible extreme consequences of economic reforms in the social sphere could lead to problems in social dialogue and to more serious economic problems (strikes, lockouts, etc.).

The paradox of the economic development in Slovakia is represented by the fact that from 1994 onwards an increase in GDP can be observed but with accompanying unsolved economic and social problems. The increase of GDP and the economic development are driven by some industries (for example, production of cars and the chemical industry), and by some regions (region of Bratislava); and are driving certain negative economic features (debt increase of public finances, increase of foreign debt, etc.).

In 1993, i.e. in the last year of a decreasing GDP, the rate of unemployment was 12.9 per cent, but this rate has increased to 19.0 per cent by the end of 2002 (according to data on unemployed persons registered in labour offices). The high rate of unemployment is of a strongly regional character, and causes deterioration of social situation for households with unemployed persons and households of pensioners. A higher number of citizens would fall into the poverty trap if not for the social and pension systems based on solidarity.

The legislative framework of industrial relations in Slovakia that meet all European criteria does not automatically exclude the future possibility of breaking down the social dialogue in the process of overcoming economic and social problems and first of all in view of fulfilling the criteria for introducing the euro.

The authors have tried to outline in this paper the main economic and social problems that could become the object of social dialogue as Slovakia moves towards EMU, but without prejudicing the content or expecting to solve these main economic and social problems.

The trade unions are in a perplexed position in the negotiation processes due to the fact that, in the complicated economic and social situation, it is very difficult to set the priorities: either to give precedence to the pressure on wage increases (for example to increase the minimum wage), or to the growing pressure on preventing social exclusion caused by unemployment). Or the trade unions may proceed outside the framework of social dialogue and try to enter directly into the political frame, as some trade unions leaders did during the transformation process; or they may openly declare which political party is able to enforce their way of solving social and economic problems.

All the social partners continue to ponder these or other questions and problems from their respective positions as Slovakia moves towards EMU. It will be important to preserve a regular and fruitful social dialogue among social partners in order that the tendency towards social cohesion in Slovakia can be enforced as the determining European characteristic of the social model.

Jan Kosta holds a PhD in Economics from the Economic University in Bratislava (1987). Until 1992 he had been working at the Institute of Labour and Social Affairs of the former Czechoslovak Ministry of Labour and Social Affairs. His leading fields of research activities were the problems of demography, labour supply and a beginning unemployment. Since 1992 he has been working at the Institute of Slovak and World Economies as specialist mainly in the field of labour economics, employment, technology and innovation policies and international migration of workers. At the University of Groningen (The Netherlands) in 1993 he participated in a special seven months course 'European Labour Studies' including the theoretical background of economic transformation problems. In 1995 he spent six months at the research stay in Sunderland City TEC (Training and Enterprise Council) in England under the ACE-PHARE Programme.

In 1996 he was the coordinator of the Slovak part of the international research project Social Costs of Economic Transformation in Central Europe (S.P.A.C.E. Programme), coordinated by the Institute for Human Sciences (IWM) in Vienna, Austria. He is the standing co-author of the most important research studies of the Institute of the Slovak and World Economy prepared for the Ministries and other policy-making bodies in the Slovak Republic.

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