Parliamentary problems, governmental grievances, and ebbing economic sectors – aside from the consequences of the current state of global affairs – have been the talk of the town in Slovakia, according to AKMCL Partner Martin Jurecko.
“When we speak to clients, we see some nervousness – the war has brought in a lot of uncertainties,” Jurecko begins. “In general, the market is fairly busy and transactions are happening, with perhaps a slightly higher than average rate of litigations taking place,” he continues, citing “usual business reasons” as the cause of the uptick in disputes. “People are becoming a bit nervous about their investments, which is normal when you consider everything that has taken place in recent times!”
However, there are issues that stall matters as well. “The government has made attempts to help out those industry sectors that were affected the most with subsidies, mainly seeking to help out with the prices of gas, electricity, and energy overall,” Jurecko explains. These efforts have reached a grinding halt, however, on account of “a true blunder. The parliament has been out of session for a few weeks due to a technical error – apparently, an MP has mistakenly unplugged, and then plugged back in, a computer in the parliament which led to a system reset that erased a good portion of all the parliamentary work of late,” Jurecko shares. “What was initially thought to have been a cyber-attack was, really, just an incredibly silly mishap.”
Still, all blunders aside, the Slovakian government has been active recently. “The government has been attempting to put certain EU fund resources to good use and to mitigate some of the COVID-19 pandemic fallout,” he says. Furthermore, a new “system of courts has been created and was set to take effect as of January 1, 2023, but problems occurred – the party that made this proposal has since left the government, leaving in control a party that was previously a minority,” Jurecko explains. “Similarly, the budget – which was presented recently – is also being criticized as not being effective enough in tackling all of the problems. Economic experts are pointing to there not being any spending limits and no cuts made, which means that there might be some loss of funds down the road,” he reports.
Reporting on the overall status of the Slovak economy, Jurecko states that there has been some turmoil as of late. “Real estate – which was booming in the first half of the year – has been heavily affected by the rising interest rates. Entire sectors are not performing as well as they were, including logistics, shopping malls, office construction, and residential,” he reports. Also, the construction industry seems to be struggling, with “some SME businesses potentially having problems,” he says.
Finally, Jurecko shares that “there has been a wave of eCommerce businesses filing for bankruptcy or restructuring (Dedoles). What was quite profitable during the onslaught of the pandemic has since lost its business allure, and adjusting to the current state of affairs has not been easy for some.” In conclusion, however, Jurecko remains an optimist, saying that he hopes “the overall tensions should decrease soon,” which could “have a positive impact on all aspects of business and life.”