Today, Slovakia is a developed European country that has faced many economic problems characteristic of the European region. Due to the lockdown and the decrease in the growth rate of the world economy due to the fall of global trade by 8.9% in 2020, the country also found itself in a state of crisis, which has not been completely overcome since the financial crisis (“How has the COVID-19 pandemic, ” 2021). Life in the country improved until 2010, but in the last 10-15 years, problems of stagnation arose due to internal social and political factors. This paper aims to discuss how new trade deals can solve Slovakia’s economic issues and how the EU has impacted it.
How the EU Impacted Slovakia’s Economy
Slovakia became a full member of the EU and NATO in 2004 after a long 10-year integration process, which gave impetus to the revival of trade through the free movement of goods, services, people, and capital within the Eurozone. Slovakia increased exports to EU member states and joined the single internal market. Along with this, business opportunities, public awareness, and consumer rights were improved, and EU member states made about 90% of investments in the country’s development by 2013 (“What EU membership brings,” n.d.). The Schengen Zone provides for the simplified movement of goods across borders. The introduction of the euro currency in 2009 has long supported economic stability and legislation on the development of agricultural policy and technical and environmental standards. The quality of education improved through the Comenius, Socrates, and Erasmus+ programs. The EU has invested in the country’s transport system by constructing roads and improving railway infrastructure.
The country continued to develop and gradually increased the pace of economic growth. Exports of automobiles and electronics mainly sustain Slovakia’s economy. Trade with V4 countries of the Czech Republic, Hungary, and Poland remained stable in the 2010s, with fluctuations due to new political situations in the countries in 2015-2019 (“Living and working in Slovakia,” 2022). During the pandemic, education, healthcare, and employment suffered complex impacts, although in 2021, experts observed an increase in average nominal wages in the third quarter 2021 by 6.5% (“Living and working in Slovakia,” 2022). Public debt reached 61.4% of GDP in the second quarter of 2021 due to financing pandemic-related measures, but experts are optimistic about the countries’ financial guarantees. They emphasize the importance of supporting economic and social progress through innovations.
New Trade Solutions
Since some countries, such as China, are recovering their trade potential faster than others, Slovakia should focus its economic policy on trade with these countries. Slovakia can use its specialization in the automotive industry, which will require the follow-up of technologies to ensure production with an educated workforce. Another policy includes the involvement of the IT sector, which can continue to generate income by creating new developments. The country may also pursue reforms to restrictive licensing and bankruptcy rules. Due to the war in neighboring Ukraine, some interruptions with supply systems and a decrease in export opportunities are possible because the long-term risks of war include interruptions with energy supply. The energy supply problem may be solved by using alternative sources and investing in engineering developments.
Thus, the influence of the EU and other external factors on the economy of Slovakia is one of the determining factors in the country’s development. In the future, Slovakia should develop its trading policy by betting on trade with countries that recovered faster after the pandemic. The development of the automotive sector and the sale of automotive products can be highly effective, but it requires investments in developing technologies and high-quality education for employees. The IT sector can also provide stable income as it is less dependent on the electricity supply factor. Slovakia can invest in the development of alternative sources of electricity through innovative engineering solutions to reduce energy supply risks.
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Living and working in Slovakia (2022). Eurofound. Web.
What EU membership brings to Slovakia (n.d.). Sk16. Web.