Prague, Aug 24 (CTK) – Prices and unemployment are higher and wages lower in Slovakia than in the Czech Republic 25 years after the split of Czechoslovakia, for which not only the Slovak adoption of the euro is to blame, economist Hana Lipovska writes in Czech weekly Reflex out on Thursday.
A rising number of young Slovaks go to study at Czech universities. About 20,000 of them study there now, most of them in Brno. In the last academic year, Slovak students even prevailed over Czechs at the IT Faculty of Brno’s Masaryk University for the first time in history, Lipovska writes.
After all, the number of Slovaks leaving abroad has been increasing. The present number of Slovaks living abroad is estimated at 300,000, and further 150,000 shuttle to work abroad, Lipovska writes.
According to the Slovak Statistical Office, 52,400 Slovaks work in Austria, 39,000 in the Czech Republic and 24,500 in Germany, Lipovska writes.
She points at what she calls a “Czech-Slovak paradox.” On the one hand, Slovakia has been presented as an example for the Czechs with its smooth integration in the EU, adoption of the euro and the path of catching up with and overtaking its “Czech brother.”
On the other hand, Slovakia is experiencing an exodus of its very capable, skilled and hard working people, Lipovska writes.
The Slovak labour market is partly to blame for this. While the Czech unemployment rate has dropped to 2.9 percent, in Slovakia it keeps on 7,4 percent, she writes.
The unemployment rate of young people under 25 is 18 percent in Slovakia, twice as much as in the Czech Republic, she writes.
In spite of this, Slovakia’s development continues to be a favourite argument in support of the adoption of the euro by the Czech Republic. This argument is probably a remnant from the period before the economic crisis, when the euro zone was still naively considered an elite club, Lipovska writes.
However, at present, Slovakia is the only Visegrad Four (V4) country to use the euro. The remaining members, or the Czechs, Hungarians and Poles, do not seek euro zone entry and they watch Slovakia’s euro anabasis with scepticism, Lipovska writes.
Eight years after the introduction of the euro, food prices in Slovakia are 10 percent higher than in the Czech Republic and Hungary and one-third higher than in Poland, she continues.
Wages in Slovakia grew and tended to catch up with Czech wages – still very low compared with the West – until 2014 only. Since then, the Czech wages have been growing faster again, Lipovska writes.
The Slovak average monthly wage is 889 euro, compared with the Czech equivalent of 1,047 euros. The real purchasing power of Slovaks, with their lower wages and higher prices, is markedly weaker than that of Czechs, Lipovska writes.
If Moravian residents preferred doing weekend shopping across the border in Slovakia in 2007, which then newspaper headlines heralded, the shopping stream flows just in the opposite direction now, she writes.
Slovakia experienced the same situation once before in history, she writes.
It was 95 years ago, in inter-war Czechoslovakia, when an indignant author of a newspaper article complained about soaring prices that make a holiday stay in the High Tatra unaccessible to Slovaks “except of capitalists or our expatriate friends from America.”
Similar complaints re-emerged after the euro adoption in 2009. In the first year, the price shock was softened by the economic recession and the operation of the Price Council assigned to supervise price rises, Lipovska writes.
However, numerous sellers started raising prices shortly before the euro introduction, and therefore almost 60 percent of Slovaks consider the euro adoption connected with a price hike, Lipovska writes.
However, the euro is not the only factor to blame for the high prices in Slovakia. A role has also been played by the high VAT, the country’s worse geographical conditions and high prices of energy, Lipovska continues.
A quarter of century after its “velvet divorce” from the Czechs, Slovakia’s economy has quite a different structure than Czech economy, she says.
The Slovak use of the euro does not help fill the economic gap between the two countries. It is the thousands of Slovak students at Czech universities who still more contribute to a mutual, not only economic approximation, Lipovska concludes.
