Slovakia: country overview16 July 2012
by Ina Dimireva -- last modified 12 February 2013
The peaceful "Velvet Revolution" swept the Communist Party from power at the end of 1989 and inaugurated a return to democratic rule and a market economy. On 1 January 1993, the country underwent a nonviolent "velvet divorce" into its two national components, Slovakia and the Czech Republic. Slovakia joined both NATO and the EU in the spring of 2004 and the euro zone on 1 January 2009.
Year of EU entry: 2004
Member of Schengen area: Yes
Political system: Republic
Capital city: Bratislava
Total area: 48 845 km²
Population: 5.5 million
Listen to the official EU language: Slovak
Slovakia became an independent state in January 1993 after Czechoslovakia split into its two constituent parts.
The country is in the heart of central Europe, linked to its neighbours by the River Danube. The Carpathian Mountains extend across the northern half of the country and include the High Tatras – a popular skiing destination and home to the country’s highest peak – the 2 655 m Gerlachovsky. The lowlands of the Danube plain provide a fertile farming region producing wheat, barley, potatoes, sugar beet, fruit, tobacco and grapes.
The President, elected by direct popular vote for a five-year term, has limited powers. The country has a single-chamber parliament whose 150 members are elected for four-year terms.
Ethnically, the population is 86% Slovak; Hungarians are the largest minority.
Perched on many hilltops are fortifications that bear witness to Slovakia’s long history of invasions. Bratislava, the coronation place for the kings of Hungary in the past, has a rich heritage of medieval and baroque architecture.
Traditional meals include potato dumplings with sheep’s cheese and cabbage soup with sausages.
Among the best-known Slovaks are Štefan Banič who invented the parachute in 1913, and Andy Warhol, the American-born pop artist, whose parents were from Slovakia.
Slovakia has made significant economic reforms since its separation from the Czech Republic in 1993. Reforms to the taxation, healthcare, pension, and social welfare systems helped Slovakia consolidate its budget and get on track to join the EU in 2004 after a period of relative stagnation in the early and mid 1990s and to adopt the euro in January 2009. Major privatizations are nearly complete, the banking sector is almost entirely in foreign hands, and the government has helped facilitate a foreign investment boom with business friendly policies. Slovakia's economic growth exceeded expectations in 2001-08 despite a general European slowdown. Foreign direct investment (FDI), especially in the automotive and electronic sectors, fueled much of the growth until 2008. Cheap and skilled labor, low taxes, no dividend taxes, a relatively liberal labor code and a favorable geographical location are Slovakia's main advantages for foreign investors. The economy contracted 5% in 2009 primarily as a result of smaller inflows of FDI and reduced demand for Slovakia's exports before rebounding in 2010-11, but growth slowed in 2012 due to weakening external demand. The government of Prime Minister Robert FICO in 2012 implemented tax increases on higher-earning individuals and corporations, effectively scrapping Slovakia's flat tax to help meet budget deficit targets of 4.9% of GDP in 2012 and 3% of GDP in 2013.
Source: Europa, CIA World Factbook