The Future of Slovakia and Its Relation to the European Union: From Adopting to Shaping EU Policies

The Slovak Republic’s Integration Ambitions

The Slovak Republic’s interest in becoming part of the group of countries envisaged for enlargement was based mainly on Central East European regional perspectives as well as on the political necessity emerging from the transition to democracy and to a market-oriented economy. Both aspects of the transition were challenging for the new and small country. The Slovak Republic faced significant challenges, especially in the area of economic transition. In 1990, interim agreements covering trade and related issues of the Association agreements were signed, whereby the Slovak Republic—at the time part of the Czechoslovak Socialist Republic—gained access to financial instruments of the European Community (EC). To improve Czechoslovakia’s market access, the EC had already decided in 1989 to include it in the Generalized System of [Trade] Preferences (GSP) for imports from Poland and Hungary and to eliminate or suspend quantitative trade restrictions as of 1 January 1990 in all member states except Spain and Portugal. These measures were later extended to imports from Bulgaria and Romania. Albania and the Baltic States began to benefit from this scheme in 1992. The economic advantages significantly helped the Slovak Republic’s transition: its economy was basically divided into heavily subsidised agriculture and so-called heavy industry, the latter of which was curtailed as a part of the economic transition. The high priority sectors of economic transition in cooperation with the EC/EU therefore included agriculture, industry, energy, financial services, privatization, investment promotion, and environment protection (Mokrá 2017, 283).

The political requirements of the time referred to the need to have sustainable and reliable institutions. The Slovak Republic, after the dissolution of Czechoslovakia, basically built its institutional system from scratch. The creation of a fully functioning and independent parliament, elected by direct vote, was the first step towards meeting this requirement. The National Council of the Slovak Republic (Národná rada Slovenskej republiky) (as the national parliament) created the constitutional and legal prerequisites for a functioning institutional system, and its first act was to adopt the Constitution of the Slovak Republic. Its political, economic, and geopolitical interest in European integration and NATO was based on the 1989 Agreement on Trade in Industrial Products between the Czech and Slovak Federative Republic (CSFR, which existed from 1990 to 1992) and the EC. This agreement was replaced in 1990 by the Agreement on Trade and Economic Cooperation and the European Agreement on the Association of the Czech and Slovak Federative Republic with the European Community of 16 December 1991. The latter was never ratified because the CSFR dissolved into two separate countries in November 1992 (Euractiv 2005).

On 4 October 1993, the Association Agreement of the Slovak Republic with the EU was signed by prime minister Vladimír Mečiar. It was ratified by the European Parliament (EP) on 27 October and by the National Council of the Slovak Republic, the Slovak Parliament, on 15 December. As of 1 February 1995, the Slovak Republic became an EU associated country, and its official application for admission was presented by prime minister Mečiar on 27 June 1995 at the EU Summit in Cannes (SME 1995).

Political developments in the Slovak Republic before the official application for membership and also afterwards, however, provoked reactions from EU representatives who were concerned about the lack of fulfilment of the democracy criteria in the country. In fact, none of these criteria had been met. There was a lack of stability regarding institutions that guaranteed democracy, a lack of respect for the principle of the rule of law and for human rights, as well as respect for and the protection of minorities. The EU reacted to the developments after the parliamentary election of 1994 by sending a so-called demarche (political note) which was handed over on 23 and 24 November by the first German Ambassador to Slovakia Heike Zenker and French Ambassador Michel Perrin to the constitutional representatives of the Slovak Republic: president Michal Kováč, the president of the Slovak Parliament Ivan Gašparovič, and the acting prime minister Jozef Moravčík. Subsequently, on 25 October 1995, the EU representatives handed over another demarche expressing concern about the political situation in Slovakia to prime minister Mečiar (Malová, Láštic, and Rybář 2005).

As a result of these political notes, the European Commission on 16 July 1997 announced it had not included Slovakia among the candidates for EU accession talks. This assessment was subsequently reflected at the EU summit in Luxembourg on 12–16 December 1997, when the EU’s enlargement concept was discussed and finally approved. The Summit decided that the EU would conduct intensive membership negotiations with a first group of countries, namely Czechia, Hungary, Poland, Slovenia, Estonia, and Cyprus. Slovakia was included in the second group of countries, which had failed to fullfill the political criteria. The Slovak Republic found itself in a group with Lithuania, Latvia, Bulgaria, and Romania (Euractiv 2005).

The parliamentary elections held in Slovakia on 25 and 26 September 1998 brought the decisive change: On 1 October 1998, the EU assessed these elections as a positive step towards Slovakia’s EU integration, confirming the reciprocal positive political developments expressed at the meeting in London on 30 March 1998. On the same day, the European Commission and the Slovak Republic had confirmed the Partnership for Accession and the Slovak National Programme for the Adoption of the Acquis communautaire (Úrad Vlády Slovenskej Republiky 1998). In response to these developments, the European Parliament adopted a resolution on 3 December 1998 regarding Slovakia’s candidacy for EU accession. It recommended a flexible approach towards the Slovak Republic, recommending to the Vienna Summit a few days later that it review the situation in Slovakia and to the European Commission that it prepare a new report (European Parliament 1998).

A year later, at the EU summit in Helsinki on 10 December 1999, Slovakia was invited, together with Romania, Bulgaria, Latvia, Lithuania, and Malta, to start EU accession negotiations (European Council 1999). The so-called Accession Conference was held in Brussels on 15 February 2000. At the end of that year, the European Commission evaluated the Slovak Republic’s performance and praised its overall progress towards EU accession. For the first time, it was described as a functioning market economy, thus fulfilling one of the economic criteria (European Commission 2000).

After 2001, the EU assessed the political developments in the Slovak Republic positively, but reports addressed remaining shortcomings and called on its constitutional representatives to address them (Table 1). Economically, the year 1999 was the starting point for stable economic growth, which only temporarily and insignificantly slowed in the year of accession to the EU (Figure 1). The decisive meeting for the EU’s biggest enlargement to date was the Copenhagen Summit on 12–13 December 2002, when an agreement was reached on the conclusion of accession negotiations with the ten candidate countries. Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia were to be admitted on 1 May 2004.

Figure 1:

Annual GDP growth (%) in Slovakia, 1993–2004. Source: The World Bank Data. https://data.worldbank.org/indicator/NY.GDP.PCAP.CD (accessed 21 August 2023).

On 17 February 2003, in accordance with the Constitution, the Slovak president Rudolf Schuster called a referendum, to be held on 16 and 17 May 2003 on the question: “Do you agree that the Slovak Republic should become a member of the EU?” Of those who voted, 92.46 % were in favour; 6.2 % answered in the negative. More than half (52.15 %) of the citizens who were eligible to vote had gone to the polls (Štatistický úrad SR 2003). Meanwhile, on 9 April 2003, the European Parliament in Strasbourg approved the admission of Slovakia and the nine other countries. There were 521 MEPs who voted for Slovakia’s accession, 21 voted against and 25 abstained (Euractiv 2005). After the European Parliament, the EU Council, which is composed of the EU countries’ foreign ministers, formally approved the ten countries’ admission on 14 April 2003. Based on these votes and the referendum, the Treaty on the Accession of the Slovak Republic to the EU was signed by president Schuster and prime minister Mikuláš Dzurinda at the EU Summit in Athens on 16 April 2003. On 1 July 2003, the Slovak parliament agreed to the Treaty. Of the 140 voting members in the Slovak Parliament, 129 approved, 10 voted against, and 1 abstained from voting (Euractiv 2005). On 26 August 2003, president Schuster signed the instrument of ratification of the Treaty, thereby ratifying the country’s EU accession. Its first EU Commissioner was Ján, who had been the Republic’s chief EU negotiator. Following the elections of 13 June 2004, Figeľ was flanked by 14 members of the European Parliament (MEPs).

Neither the Constitution of the Slovak Republic nor the legal system as it emerged in connection with the establishment of the independent Slovak Republic on 1 January 1993 contained special provisions on the legal status of the regulations of the European Communities/European Union. Accordingly, a legal prerequisite for Slovakia’s membership in the EU was a modification of the Constitution so that it would allow accession to the EU and establish the primacy of EC and EU legal acts over the laws of the Slovak Republic (National Council of the Slovak Republic 2001).

Expectations and Capability Dilemma

From the very beginning, the expectations accompanying Slovakia’s EU membership were directed towards the achievement of the so-called “Western standard”, especially with respect to economic well-being as well as with respect to a fundamental qualitative shift of financial remuneration, economic, and labour market development and institutional reinforcement. Opinion polls conducted in 2003, shortly before accession, accentuate these expectations, even though fear had set in: a third of the citizens (34 %) had less positive expectations of EU membership, compared to five years earlier. Less than a fifth of respondents (18 %) said that their positive expectations had increased over these five years, and almost a third (31 %) said their expectations had not changed. 12 % did not have positive expectations at all. The most frequent respondents who reported such a decrease in positive expectations were 50–59 years old (41 %), unskilled workers (43 %), the unemployed (42 %), respondents from small cities with 10,000 to 50,000 inhabitants (42 %) and from those with over 100,000 inhabitants (40 %). Positive expectations remained particularly unchanged among people 40–49 year old (36 %), entrepreneurs (39 %), the university-educated (37 %), and employees (36 %). An increase in positive expectations was particularly characteristic of people 25–29 year old (26 %), entrepreneurs (33 %), the university-educated (24 %), and skilled workers (24 %). Those who answered indifferently were predominantly aged 60 and over or had only primary education (20 % each) (SME Domov 2003).

In terms of content, the same opinion poll showed that between 30 and 35 % of respondents expected EU accession to have a positive effect on the development of tourism, the protection of human rights—and especially the rights of national minorities—the alignment of the legal system with EU legislation, and the international position of Slovakia. The most sceptical expectations—improvement only after more than 20 years—prevailed in relation to the development of the standard of living. This was particularly evident in the answers of skilled workers (27 %) and the unemployed (26 %). No positive effects were expected from EU integration in addressing the situation of Slovakia’s Roma population or the development of agriculture (SME Domov 2003).

Ten years later, economic expectations especially had been fulfilled (Figure 2): Slovakia’s EU accession has had a positive impact on its gross domestic product (GDP), even if it was not the only factor facilitating this development. Thanks to EU membership, Slovakia was also able to mitigate the impact of the global economic crisis on its economy. Expressed in purchasing power parity, Slovakia’s economic performance rose from 57 % of the EU average in 2004 to 75 % in 2013. Comparing the four countries of the Visegrád group (V4), Slovakia showed the strongest growth in this first decade of EU membership (Figure 3).

Figure 2:

Real GDP growth of the EU and Slovakia (2004–2013) in %. Source: Fórum pre medzinárodnú politiku 2014. “Hodnotiaca správa o 10 rokoch členstva SR v EÚ.” 2 July. Bratislava. http://mepoforum.sk/kniznica/europa-k/slovenska-republika-k/zahranicna-politika-k/hodnotiaca-sprava-o-10-rokoch-clenstva-sr-v-eu/ (accessed 21 August 2023).

Figure 3:

Economic performance of the V4 countries as % of the EU27 average (GDP per capita in purchasing power parity). Source: Fórum pre medzinárodnú politiku 2014. “Hodnotiaca správa o 10 rokoch členstva SR v EÚ.” 2 July. Bratislava. http://mepoforum.sk/kniznica/europa-k/slovenska-republika-k/zahranicna-politika-k/hodnotiaca-sprava-o-10-rokoch-clenstva-sr-v-eu/ (accessed 21 August 2023).

These positive economic results notwithstanding, the fight against tax fraud and tax evasion remained a key challenge for Slovakia’s fiscal policy. In the field of value added tax (VAT) especially, the focus was on measures to effectively combat serious forms of fraud. For example, a rapid response mechanism was introduced, and the possibility of applying self-taxation to domestic transactions was extended. In the fields of direct taxation and administrative cooperation, the existing legislative instruments were improved, and new initiatives combatted tax fraud and tax evasion in line with the recommendations of the European Commission (Fórum pre medzinárodnú politiku 2014, 7).

After almost 20 years of EU membership, the expectations are still very high, reflecting both Slovakia’s economic development and a number of political ones. The Eurobarometer results of 2022 show that 73 % of Slovaks perceive the EU positively or neutrally. The perceived biggest benefits of membership remain connected to the common market and economic well-being, such as the free movement of people, goods, and services, peace between member states and the common currency, the euro, which Slovakia adopted on 1 January 2009. But more than half of the respondents are satisfied politically as well, seeing democracy in the EU as functioning and European institutions worthy of higher trust than national ones (Figure 4). In recent years, political trust in the EU has been above 40 %, and most European policies have been strongly supported by the Slovak population (Eurobarometer 2022).

Figure 4:

Comparison of trust of Slovak citizens in the EU and in the Slovak parliament and government (in %). Source: Eurobarometer Winter 2021–2022. Standard Eurobarometer 96.3. European Commission. Brussels. https://europa.eu/eurobarometer/api/deliverable/download/file?deliverableId=81534 (accessed 14 August 2023).

The recent crises brought additional benefits of EU membership, which were never part of any “expectations”. During the Covid-19 pandemic, the EU represented solidarity and togetherness when joint action and negotiations by the European Commission ensured that effective vaccines reached Slovakia at the same time as all other member states and facilitated the purchase of medical supplies. In response to Russia’s aggression against Ukraine, EU member states have joined forces and are taking joint action to support Ukraine (Zastúpenie na Slovensku 2022). In Slovakia, both the EU’s response to the pandemic and to the attack on Ukraine have additionally strengthened support for the EU. Paradoxically, however, despite their widespread support in opinion polls, Slovak citizens’ participation in the European Parliament’s elections and in European citizens’ initiatives has long been among the lowest, as we will show in the following section.

Political Standpoints

Examining the government program declarations (programové vyhlásenie vlády) since Slovakia’s EU accession, we shed light on what kind of EU Slovakia would like to see. Has it just been promoting EU values, or has it actually implemented them? Since the year of accession, 2004, Slovakia has seen eight governments. The first, legislative, period, which ended with early elections, was headed successively by Mikuláš Dzurinda (2002–2006), Robert Fico (2006–2010), Iveta Radičová (2010–2012). The second period saw first Robert Fico (2012–2016 and 2016–2018) at the helm and ended with a change of prime minister without early elections. In the third period first Peter Pellegrini (2018–2020) and then Igor Matovič (2020–2021) were in charge, and this period also ended with a change of prime minister without early elections: Eduard Heger (2021–2023). As of the time of writing this article, Ľudovít Ódor has been leading an interim government of experts installed by president Zuzana Čaputová and tasked with leading the country from May 2023 until the next elections take place in September.

Seven government programme declarations have been introduced since 2004. After becoming an EU member state, integration goals such as accession to the monetary union and the full application of the Schengen law were announced. The government under Mikuláš Dzurinda advocated for an EU that would “take due account of the influence of its member states, regardless of their size, as well as of the preservation of national identities in cultural and ethical matters” (Úrad Vlády Slovenskej Republiky 2002, 40). The subsequent government of Róbert Fico declared “a vigorous defence of national and state interests”, but this was qualified by the aim to “support the deepening of partnership and strategic cooperation within the EU”, as well as the European integration process, which included the envisaged ratification of the treaty establishing a constitution for Europe. At the time, Slovakia explicitly referred to the EU’s values as its own (Úrad Vlády Slovenskej Republiky 2006, 54).

A few years later, in 2010, Iveta Radičová’s government stressed the need to substantially strengthen EU level mechanisms “with a view to stabilis[ing] public finances in the eurozone in the long term”. Despite the fact that this government clearly called for due application of the principle of subsidiarity and proportionality, it explicitly declared, as the only government in Slovak history to do so, that Slovakia would “participate in the redistribution of migrants in the resettlement process, accept migrants from European Union countries affected by a large influx of migrants, respectively from countries for which humanitarian aid has been agreed at EU level”. This was, of course, a few years prior to the so-called refugee crisis when such redistribution mechanisms were to become more acute than ever (Úrad Vlády Slovenskej Republiky 2010, 47).

The second Fico government, which replaced Radičová’s in 2012 after early elections, abandoned the themes of migration and solidarity. It declared the necessity of a “deeper coordination of budgetary policies” and emphasized its “clear pro-European attitude”. A new important goal was to “bring the EU closer to its citizens so the deepening of integration processes following the adoption of the Lisbon Treaty would be better understood” (Úrad Vlády Slovenskej Republiky 2012, 7). The rule of law, resilience, the prevention of further fragmentation and enforcement of the internal market through the envisaged Energy Union, the Single Digital Market and Capital Markets Union were among the most important goals presented by the third Fico government. Peter Pellegrini, who replaced Róbert Fico as a prime minister in 2018 after massive civil protests, continued to adhere to these goals as he represented the same political party (Úrad Vlády Slovenskej Republiky 2016, 5).

The current government programme declaration, issued in 2021 and in force until 2024, shows continuity with previous programs and aims “to strengthen the perception of the EU agenda as a part of domestic policies […], full restoration, functioning and further development of the common market, as well as the elimination of all discriminatory barriers, […] enforcement of the rule of law” as long as the principle of subsidiarity is met. There is still a clear reservation towards EU migration policy as it denies the policy of compulsory relocations while claiming that the asylum process must remain in the competence of the member state (Úrad Vlády Slovenskej Republiky 2021, 116). The only area in which this standpoint was mitigated was rin connection with the refugee waves triggered by the Russian attack against Ukraine.

Slovakia’s governments have thus consistently proclaimed a compliance of national values with those of the EU. They all have welcomed a deeper integration at least when it comes to the Common Market, the Energy Union, the Single Digital Market and the Capital Markets Union. Moreover, a deeper coordination and effective enforcement has been welcomed in the fields of fiscal regulation and the rule of law. Slovakia was among the countries that ratified the then stalled Treaty Establishing a Constitution for Europe in 2005. The “Strategic Foresight for the Foreign and European Policy of the Slovak Republic”, an elaborate strategic programme issued by the Slovak Foreign Ministry in the face of the world’s multiple crises, further sustains Slovakia’s pro-EU orientation and was adopted across the entire political spectrum (MZV 2022).

The Eurobarometer survey of winter 2021–2022 testified to Slovak citizens agreeing to the pro-European ways of their government. A significant majority of Slovaks (76 %) perceive themselves as EU citizens. More than half (59 %) know what rights they enjoy as EU citizens. A path towards deepening integration, towards a European economic and monetary union, is perceived positively by 78 % of Slovaks, and so is the euro (60 %) (Eurobarometer 2022). To sum up, Slovak citizens comply with the outcomes of the Conference on the Future of Europe as much as with the continuous pro-EU attitude of their governments.

Comparing GDPs

We compared Slovakia’s levels of annual GDP growth (Figure 5) with the GDP per capita, PPP (Figure 6). The average GDP growth in Slovakia between 2004 and 2020 was 3.4 %. The GDP growth rose gradually until the 2008–2009 economic crisis, when it fell drastically to −5.5 %. From that point, the GDP growth reached a maximum of 6.3 % in 2010, which has not yet been superseded. Despite the deceleration, however, GDP growth remained positive for the next decade until the Covid-19 pandemic broke out (Figure 5).

Figure 5:

Annual GDP growth (%) in Slovakia, 2004–2020. Source: The World Bank Data. https://data.worldbank.org/indicator/NY.GDP.PCAP.CD (accessed 21 August 2023).

Figure 6:

GDP per capita, PPP (in $) in Slovakia, 2004–2020. Source: The World Bank Data. https://data.worldbank.org/indicator/NY.GDP.PCAP.CD (accessed 21 August 2023).

Surprisingly, these economic swings have not had a significant effect on the growth of GDP per capita, PPP in Slovakia (Figure 6). Since 2004, it has more than doubled from $15,226.34 to $31,356.46 in 2020. Moreover, despite the global economic crisis in 2008–2009 and the Covid-19 pandemic significantly lowering and slowing GDP growth, no similar effects to the GDP per capita, PPP occurred, which basically continues to be an increasing curve, lowering only a little, counting in hundreds of $ (from $23,725.86 in 2008 to $23,080.59 in 2009 and from $31,966.55 in 2019 to $31,356.46 in 2020).

What does the Slovak performance look like when compared to the EU15, i.e. the EU member states prior to the enlargement of 2004 (Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden, United Kingdom)? Has Slovakia caught up with them yet? And what can be said about the comparison with the fellow member states since 2004? Slovakia’s average GDP growth of 3.4 % was not matched by the EU15—here the average was only 1.1 % (Figure 7). But in the EU15 as well, slow GDP growth did not preclude the growth of GDP per capita, PPP (Figure 8).

Figure 7:

Annual GDP growth (%) – Slovak Republic versus EU15, 2004–2020. Source: The World Bank Data. https://data.worldbank.org/indicator/NY.GDP.PCAP.CD (accessed 21 August 2023).

Figure 8:

GDP per capita, PPP ($) – Slovak Republic versus EU15, 2004–2020. Source: The World Bank Data. https://data.worldbank.org/indicator/NY.GDP.PCAP.CD (accessed 21 August 2023).

Clearly, Slovakia has not reached the level of average GDP per capita, the PPP of the former EU15 group. But some improvement is observable: in 2004, the level of the Slovak GDP per capita was 45.85 % of the EU15 GDP, while in 2020 it was 56.32 %. It is also a fact that the Slovak GDP per capita in 2020 was still lower than the average EU15 GDP in 2004, even though it doubled in these 15 years (from $15,226 in 2004 to $31,356 in 2020). Without a doubt, the economic cooperation between EU member states, particularly the common market and competition regulation, influenced the growth trajectory.

The situation of the other member states that accessed to the EU in 2004 has been similar to Slovakia’s. They too suffered from economic swings, but, like Slovakia, their average annual GDP growth remained higher than the EU15 one (Figure 9). Of these countries, Malta and Poland had the highest average annual growth of GDP (3.7 %), followed by Slovakia (3.4 %), Lithuania (3.3 %), Estonia (2.8 %), Latvia (2.6 %), Cyprus (2.4 %), Czechia (2.0 %), Slovenia (1.9 %), and Hungary (1.9 %).

Figure 9:

Annual GDP growth (%) – 2004 enlargement states versus EU15, 2004–2020. Source: The World Bank Data. https://data.worldbank.org/indicator/NY.GDP.PCAP.CD (accessed 21 August 2023).

Like Slovakia, none of the other new member states managed to reach the average GDP per capita, PPP of the EU15 by 2020. Unlike Slovakia, however, there are states that exceeded previous EU15 averages and thus were effectively closer to “catching up” with them. In 2020, Cyprus ($42,461.25) and Malta ($41,608.03) exceeded the EU15’s average of 2010 ($41,206.01). Slovenia ($39,725.26), Czechia ($39,373.41), Lithuania ($38,880.55), and Estonia ($37,645.22) exceeded EU15’s average of 2006 ($37,629.72). Poland ($34,286.99) reached the EU15’s average of 2004 ($33,210.73). Hungary ($33,075.92) and Latvia ($31,482.68), like Slovakia ($31,356.46), did not even reach that average in 2020 (Figure 10).

Figure 10:

GDP per capita, PPP ($) – 2004 enlargement states, 2004–2020. Source: The World Bank Data. https://data.worldbank.org/indicator/NY.GDP.PCAP.CD (accessed 21 August 2023).

Slovakia’s economic indicators are not much better, even if we consider the EU28 in 2020, given that it is 25th. The only state from the EU15 which Slovakia managed to overtake is Greece. Croatia and Bulgaria are also behind Slovakia, but they accessed to the EU at a later stage (Figure 11). Given that the convergence of economies is one of the EU’s aims, the disparities are significant. It seems that politicians and lawmakers need to be reminded at every available possibility to keep sight of this in their policy making.

Figure 11:

GDP per capita, PPP ($) – EU28 in 2020. Source: The World Bank Data. https://data.worldbank.org/indicator/NY.GDP.PCAP.CD (accessed 21 August 2023).

Development of Trade Relations

Traditionally, Slovakia has been an export economy, which is why our data indicators retrieved from Eurostat focus on where Slovakia stands in intra-EU trade relations when it comes to trade. Between 2002 and 2021, Slovakia’s balance of intra-EU trade rose from 990 million to 2091 million euros. Its annual average export growth rate compared to other member states in that time period was 9.1 %, which put Slovakia in 6^th place of all member states (Figure 12). Moreover, if the spotlight is put on Slovakia’s performance in comparison with its fellow member states of 2004, it shows rather stable trade export relations (Figure 13).

Figure 12:

Annual average growth rate – Slovakia’s exports of goods within the EU (2002–2021). Source: Eurostat Database (DS-057009). Luxembourg. https://ec.europa.eu/eurostat/statistics-explained/index.php?oldid=452727 (accessed 21 August 2023).

Figure 13:

Intra-EU goods: exports divided by imports 2004–2021, enlargement states of 2004. Source: Eurostat Database (DS-057009). Eurostat. Luxembourg. https://ec.europa.eu/eurostat/statistics-explained/index.php?oldid=452727 (accessed 21 August 2023).

The Role of Foreign Direct Investments

Foreign Direct Investments (FDIs) are a component of the investments made in an economy. As such, they can play a role in spurring economic growth and the creation of jobs in the receiving economy. Moreover, the level of FDI may indicate—among many other factors—an economy’s particular attractiveness or competitiveness. Measuring the levels and trends of FDIs is thus a relevant exercise in assessing a country’s performance (European Commission 2020b).

The European Commission recently provided a Single Market Scoreboard for the period from 2017 to 2018. The accumulated indicators reflected the relative attractiveness of Slovakia and the other EU member states. Negative FDI flow data indicate reverse investment, or disinvestment, in which at least one of the three components of FDI (equity capital, reinvested earnings, or intracompany loans) was negative and not offset by positive amounts of the remaining components (European Commission, 2020b). Changes in the level of inward intra-EU FDI flows show that Slovakia, whose score is below 0, has tended to lose its attractiveness for investors (Figure 14). A negative trend for Slovakia also appeared in the level of outward intra-EU FDI flows (Figure 15). It may be that policy measures taken in other countries have contributed to modifying incentives or creating barriers to investment. Finally, the situation is even worse in inward extra-EU FDI flows (Figure 16) and almost the same in outward extra-EU FDI flows (Figure 17).

Figure 14:

Change in inward intra-EU FDI flows, 2017–2018. Source: European Commission 2020b. Single Market Scoreboard. Foreign Direct Investments. European Commission. Brussels. https://ec.europa.eu/internalmarket/scoreboard/docs/2020/07/integrationmarketopenness/fdien.pdf (accessed 14 August 2023).

Figure 15:

Change in outward intra-EU FDI flows, 2017–2018. Source: European Commission 2020b. Single Market Scoreboard. Foreign Direct Investments. European Commission. Brussels. https://ec.europa.eu/internalmarket/scoreboard/docs/2020/07/integrationmarketopenness/fdien.pdf (accessed 14 August 2023).

Figure 16:

Change in inward extra-EU FDI flows, 2017–2018. Source: European Commission 2020b. Single Market Scoreboard. Foreign Direct Investments. Brussels: European Commission. https://ec.europa.eu/internalmarket/scoreboard/docs/2020/07/integrationmarketopenness/fdien.pdf (accessed 14 August 2023).

Figure 17:

Change in outward extra-EU FDI flows, 2017–2018. Source: European Commission. 2020b. Single Market Scoreboard. Foreign Direct Investments. European Commission. Brussels. July. https://ec.europa.eu/internal_market/scoreboard/_docs/2020/07/integration_market_openness/fdi_en.pdf (accessed 14 August 2023).