Slovakia and domestic discourse on energy security and Single European Market

Slovak Foreign Policy Association
The beginning of 2009 was affected by a shutdown of gas supplies from the Russian Federation. The Russian-Ukrainian row pointed out Slovakia’s weakness in dependency on Russian natural gas and in its domestic management of gas reserves. The government insisted from the beginning of the crisis that it would sustain supplies to households and therefore industries, especially car and steel production, which were asked to limit their activities. However, with the continuing crisis Slovakia would not have been able to draw sufficient gas reserves even to satisfy all household consumption. Thanks to close cooperation with the Czech Republic and France and Germany gas was supplied to Slovakia from foreign reserves and through a pipeline in the Czech Republic.
Natural gas also constitutes important supply for the electricity network support services after the second block of the “V1 Nuclear Power Plant” in Jaslovské Bohunice was phased out on 31 December 2008.[1] The closure of the “V1 block” was part of our obligations under EU accession treaty. Prime Minister Fico, strongly criticised the previous government of Mikuláš Dzurinda for accepting this obligation without having strong objections. The ministry of economy proposed already in November 2008 that Slovakia might not turn off the power plant because of the effects of the global financial crises however, the proposal was rejected. Prime Minister Fico and the Minister of Economy, Ľubomír Jahnátek, announced the intention to turn on the “V1 block” again on 9 January 2009. The government informed the President of the European Commission José Manuel Barroso and member states governments about this eventuality.[2] An immediate negative reaction came from Austria, long-year opponent of nuclear power plants in Central Europe. Opinions in Slovakia on turning on “V1” were diverse; environmentalist warned that it would take months to turn the block on and again off but the ministry and the state-owned company “Javys”[3] argued that it would take only seven days. The danger of energy black-out was enhanced by the electricity failure in thermal power plant Nováky according to the Ministry of Economy. The Prime Minister stated his full responsibility should Slovakia break the obligations of the accession treaty.[4] The solution of supplying some gas from Russian Federation through the Jamal pipeline was found thanks to close cooperation with Czech Republic and its companies. The Prime Minister strongly appreciated the Russian Federation for these supplies and repeatedly accused Europe for not being helpful to Slovakia.[5] The leader of the opposition party Slovak Democratic and Christian Union – Democratic Party[6] and former Prime Minister Mikuláš Dzurinda, expressed that the crisis was not a suitable time for political rows and opposition even thought of supporting the turning on of the “V1 block” of Jaslovské Bohunice.[7] The specific reaction to the gas crisis was an energy law amendment that allowed more state control over using gas reserves and created new obligations for companies in case of interrupted gas supplies in the period from 1 November to 31 March. This should provide for supplies of consumers at the average daily gas consumption at least for the period of 30 days.[8] General director of Russian “Gazprom”, Alexander Medvedev, also visited Slovakia and talked with Prime Minister Fico about a potential common gas company.
Slovakia launched a legal dispute with the European Commission because of “Slovenská pošta, a.s.” (Slovak Post).[9] According to the European Commission Slovakia violated the competition policy in the case of hybrid mail sector.[10] Law amendment from February 2008 that entered into force on 1 April 2008 revoked already existing competition and established the monopoly of the state company “Slovenská pošta”. Slovakia did not satisfactorily reply to the Commission’s complaints from June 2008 and after a decision of the government from October 2008 to support the domestic status quo in an action before the European Court of Justice. The Prime Minister and Ministry of Transport, Post and Telecommunications are supporting “Slovenská pošta” because it is a big employer and a source of substantial state revenue as this liberalisation is in favour of private sector that is weakening the post’s earnings.[11] Alongside the government “Slovenská pošta” is arguing that the EU liberalisation is threatening small customers.[12] Meanwhile the Commission continued the process by requesting further actions.
The ministry of Transport, Post and Telecommunications got in a dispute with Brussels also in the issue of removal of Branislav Máčaj, former director of the telecommunication office of the Slovak Republic. The ministry blamed Máčaj for a failure of public tender on digital television operator that was stopped by the court’s provisional proceeding. The European Commission decided to investigate the case to find out if the independence of Slovakia’s telecommunications office has not been violated. Former director Máčaj argued that the ministry did not fulfill the legal requirements for his removal and that the financial group “J&T”, owner of one private television in Slovakia, has tried to influence the tender. He also blamed the Prime Minister for unwillingness to face new critiques[13] from future televisions to be established in Slovakia through digitalization. The process of digitalization of television broadcasting has already been postponed for several reasons and should be finished in 2012.
Problems with a public tender have been also at the Ministry of construction and regional development of the SR under the management of Marián Janušek from Slovak National Party.[14] Tender on consultative and legal services for investing structural funds for almost 120 million Euros was accompanied by several doubts but the ministry exclusively contracted the chosen consortium of companies friendly with the SNS leader Ján Slota.[15] There were several problems with this tender. First, the information about the tender was available only for a few days on the notice board of the ministry building. Second, a subliminal procurement method was used for such large amount of money. Third, the ministry abandoned its competencies for future procurements and prices of some services were overvalued (especially advertising spots, logos and lectures).[16] The public procurement office and the supreme audit office have made investigations into the tender but results have been delivered to the ministry only lately. The procurement office, lead by opposition Party of Hungarian Coalition[17] nominee Béla Angyal, itself had problems with the investigation process that incited the Prime Minister’s declaration that head of procurement office should restore order at his office.[18] A head of one of the Public Procurement Office’s departments refused to sign the investigation protocol because she believed that the shortcomings found during investigations were negligible.[19] Later she was recalled from her office. The tender caused strong critique not only from opposition that unsuccessfully tried to remove Minister Janušek from office but also Vladimír Mečiar, the head of a coalition party, expressed his strong dissatisfaction. Prime Minister Fico decided to wait for the official investigation results but his party, the Social Democrats,[20] supported Minister Janušek in Slovakia’s parliament.
The first days of the Euro in circulation in Slovakia (Slovakia has been a member of the Eurozone since 1 January 2009) did not record any dramatic problems with the availability of coins for households that previously raised some concerns by the European Commission and the public. Actually, many small businesses got the needed proportion of coins and were willing to give them back to buyers but the Slovak bank charge for deposits of high number of Euro coins was high. The main coalition party SMER-SD reaction was a short-term legal arrangement prohibiting charges for coins deposits for six months. European Commissioner, Joaquín Almunia, was very positive about Slovakia’s process of entering the Eurozone.[21] With the entry to the Eurozone, the Slovak National Bank governor gained a permanent vote in the governing council of the European Central Bank. The Austrian National Bank governor proposed in August 2008 to postpone the rotating system of votes to be implemented with the entry of the new, sixteenth member of the Eurozone.[22] The right to vote in the European Central Bank was restricted to 15 member states but the entry of Slovakia would discriminate just one country.[23] Therefore in December 2008, the governing council decided to change the rules and apply the rotating system possibly only when the Eurozone reaches 18 member states.[24]

[1] The Slovak Spectator: “Energy crisis looms as all gas imports cease”, 12 January 2009.

[2] Aktuá “Vláda oznámila Európskej únii zámer spustiť Bohunice”, 9 January 2009.

[3] “Javys” is responsible for phasing out the nuclear devices and processing the burnt fuels.

[4] Aktuá “Vláda oznámila Európskej únii zámer spustiť Bohunice”, 9 January 2009.

[5] SME: “Fico: Nepomohol nám dobrý západ. Tečie k nám ruský plyn”, 18 January 2009.

[6] Slovenská demokratická a kresťanská únia – Demokratická strana (SDKÚ-DS).

[7] SME: “Fico: Nepomohol nám dobrý západ. Tečie k nám ruský plyn”, 18 January 2009.

[8] Aktuá “Štát bude mať väčšiu kontrolu nad zásobníkmi plynu”, 17 February 2009.

[9] SME: “Štát bude žalovať Európsku komisiu pre rozhodnutia o hybridnej pošte“, 26 November 2008.

[10] Hybrid mail is a specific form of postal service where the content is electronically transferred from the sender to the postal service operator who then prints, envelopes, and sorts and delivers the postal items. Hybrid mail is an important feature for such companies as banks, insurances and telecommunications undertakings who regularly have to send large amounts of mail (for example invoices). European Commission: Antitrust: Commission opens infringement proceedings against Slovakia to ensure compliance with Commission hybrid mail decision, press release, IP/08/1997, 17 December 2008.

[11] Aktuá “Pošta vracia úder, monopol si chce nechať”, 11 November 2008.

[12] Ibid.

[13] ČTK: “Máčajovo odvolanie vyšetrí Európska komisia”, 5 December 2008.

[14] Slovenská národná strana (SNS).

[15] The Slovak Spectator: “Ministry tender linked to SNS allies”, 8 December 2008.

[16] Hospodárske noviny: “Janušek exkluzívne pre HN: Výber firiem som prebral aj so Slotom”, interview, 30 January 2009.

[17] Strana maďarskej koalície – Magyar Koalíció Pártja (SMK-MKP).

[18] The Slovak Spectator: “Minister Janušek’s fate remains unclear after coalition session”, 3 February 2009.

[19] „Ibid.

[20] SMER – sociálna demokracia (SMER-SD).

[21] SME: “Almunia: Euro ste zvládli hladko”, 8 January 2009.

[22] eTrend: “Vstup Slovensko zmení hlasovanie v Európskej centrálnej banke“, 22 August 2008.

[23] The rotating vote system meant a division of member states into two groups: the five strongest economies (Germany, France, Italy, Spain, and Netherlands) with one vote for each and the rest of countries should share 10 votes.

[24] The new version of the rotating system also divides member states into two groups: the five strongest economies (Germany, France, Italy, Spain, and Netherlands) sharing 4 votes and the rest of countries share 11 votes.