Slovakia is one of the European Union countries that have suffered from the Russian-Ukrainian gas conflict but remained unaffected by the global financial crisis. Who does Bratislava blame for cutting gas supply to the Slovak Republic — Kyiv or Moscow? What is the secret of the economic strength of Slovakia which, unlike many of its EU neighbors, has withstood the current crisis and, besides, is the first ex-communist country to join the euro zone? What does Bratislava think about Ukraine’s aspiration to integrate into the European and Euro-Atlantic organizations? This is the subject of an interview granted to The Day by Urban RUSNAK, Ambassador Extraordinary and Plenipotentiary of the Slovak Republic to Ukraine.
Mr. Ambassador, who do you think is to blame for the fact that Slovakia is not receiving Russian gas, although you country has signed gas supply contracts?
“We see today that Slovak consumers and the economy as a whole have suffered from the inability of Russia and Ukraine to come to terms. Indeed, we do have a gas supply contract with Russia, not with Ukraine. We receive gas from the Ukrainian territory, in fact from Gazprom rather than from Naftohaz, so it is difficult for us to find a way out until Gazprom makes a deal with Naftohaz. The current situation is that we have fallen hostage to the Ukrainian-Russian bust-up about the price for the supply of gas to Ukraine and for the transit of gas to Europe. It is very sad, and I can only hope that the two sides will strike a deal as soon as possible on resuming the delivery of transit gas to the European Union across the territory of Ukraine. Until then, all we can do is rely on solidarity of the EU member states. The Czech Republic, Hungary, France, and Germany have shared their reserves with us.”
Do you see a commercial or a political aspect in this problem?
“Undoubtedly, this problem consists of many aspects — economic, political, and geopolitical. But responsibility for these disputes equally lies with Kyiv and Moscow. I cannot take a differential approach to this. Negotiations were in progress until December 31 and then suddenly stopped. Regrettably, we did not have reliable and concrete information from both Slovakia and the European Union. We had to rely on sources from Ukraine and Russia, which are accusing each other of lying. So it is of paramount importance for us that both sides send observers to the compressor stations and measuring points, where one can obtain true information on who is supplying gas, where from and in what quantities.”
Ukraine has already agreed to receive EU observers, while Russia is insisting on some kind of an international observer group...
“I think both sides should meet each other halfway. As far as I know, this kind of an international or expert group should be stationed at all the pipeline’s segments, beginning from the last Russian compressor station that pumps gas to Ukraine, as well as in Slovakia which is the first to receive gas on the EU territory. We cannot get a full picture otherwise. One should monitor the behavior and pressure of gas in all the transit directions.”
Mr. Ambassador, when your country receives gas, does it measure its quantity in cubic meters or in energy/heat capacity units?
“We measure the quality and quantity of gas against a number of physical parameters and express this in a unit of volume.”
And at what price is your country buying Russian gas now?
“The gas price for Slovakia is assessed by a formula which takes into account the parameters that reflect the price of oil for the past nine months. Today, it approaches what the Russian side calls average European price but we assume by the end of the year that it may go down approximately twofold.”
You must have heard Russian Premier Vladimir Putin say to Gazprom boss Aleksei Miller: “Go and show the contracts and the price at which Russian gas is being sold to Europe. Besides, one can easily find this information in the Internet, and there will be no disputes over the true market price for gas...
“I have not seen this so far. And our mass media have never revealed the price at which our country is buying Russian gas. Slovakia signed a frame contract with Gazprom on 20-year-long gas supplies as recently as December. As I said, it provides for a floating price.”
Mr. Ambassador, your country joined the euro zone on January 1, 2009, and the euro will have fully replaced the Slovak crown by January 17. How can you explain the success of your country which has in fact outdone all the other Eastern European countries which had joined the European Union even before you did?
“In the course of EU membership talks, Slovakia pledged to integrate, as fast as and if possible, all the entities that stand outside the basic political agreement. These are the Schengen zone and the European currency zone. We have met with all the economic requirements — the so-called Maastricht criteria. I will remind you that they are about inflation, public debts, and state budget deficit. Switching to the European currency requires well-balanced finances, budgetary discipline, and reduction of inflation to fewer than 3 percent. We were to keep up these indicators for at least two years. And the Slovak economy, as well as the rotating governments, have fulfilled this task. During the transit period, the Slovak crown was part of the European exchange rate mechanism and was pegged to the euro within specified limits. In this two-year period, the crown’s settlement rate, which allows for a margin of +15 percent, twice registered a rise. While the crown/euro exchange rate was at first 40 crowns per euro in 2006, it was 30.12 crowns per euro at the moment of adopting the EU currency. This exchange rate meets the balance of interests of the populace which has savings in the Slovak crowns, now being converted into the euro, as well as that of Slovak exporters who are interested in keeping the rate lower so that Slovak-made goods can be competitive on global markets. I think the current exchange rate allows the populace not to lose their savings and enables the economy to successfully work in these conditions. The National Bank of Slovakia estimates that adopting the euro will give the economy a one-percent boost owing to currency stabilization and the cancellation of exchange expenses. Businesses will not have to save in order to offset unexpected rate fluctuations because the vast majority of exports go to the euro zone, which gives Slovakia an edge over the other Central European countries which have not carried out this kind of conversion but which have committed themselves to adopt the euro in due time in their EU membership treaties.”
Has the crisis not affected the crown’s rate?
“Since July 2008, when the conversion rate was officially announced, the crown’s current rate has been about 30 crowns per euro. During the crisis the crown was ‘anchored’ by the euro and, unlike the currencies of the neighboring European countries, such as the forint and the zloty, which had nose-dived, the Slovak currency remained at the same level.”
How can you explain this stability of the crown?
“The point is there was no more interest in speculating on the currency because the economy is small in size and the crown was pegged to the euro. Besides, the state of the Slovak economy was giving quite positive outlooks, at least until the last days of 2008. Before the global economic crisis, the projected economic growth rate was 7 percent. Today, we have to lower expectations to 4 to 5 percent. Still it is one of the highest figures in the euro zone and the European Union.”
Mr. Ambassador, can you tell us about the secrets of Slovak economic stability, for, unlike many other EU neighbors, your economy has withstood the current crisis?
“The secret is simple and consists in obeying the clear-cut and universally-known rules. The political decisions of the Dzurinda and Fico cabinets on transition to the euro zone have been put into practice. Both cabinets maintained a rigid financial discipline, reduced state budget deficit, and kept inflation in check. If any country sets this kind of rules, it will come to a more sound financial condition. It was publicly promised to the European Union as well as to entrepreneurs and the populace that we would go through this process. We reached these results in a few years, as the government was pursuing an uninterrupted, well-planned and predictable budgetary policy. By contrast with our neighbors, who did not set themselves such goals or were under the influence of other factors, we managed to retain a stable economic growth rate and an ever-strengthening Slovak crown.”
And can the presidential elections slated for March 21, 2009, affect the country’s course?
“No. The Slovak president performs representative, rather than executive, functions. The president is the head of state; he is not part of the executive branch of power. The executive branch in Slovakia is headed by the prime minister. So presidential elections arouse no expectations about changing the country’s political course or some key parameters in the country’s policies.”
As is known, the Czech Republic has taken over the European Union presidency this year. The media have reported that the countries of Old Europe are doubtful that the Czech presidency will be successful because that country’s president is a Euroskeptic and, moreover, Prague has not yet ratified the Lisbon Treaty. What does Slovakia, the Czech Republic’s “cousin,” think of this?
“I am convinced that our Czech friends will fully cope with this difficult mission, even though, in the very first days of their presidency, they have to resolve the gas conflict between Ukraine and Russia, which has a direct impact on Slovakia and other EU countries. Prague also has to deal with a new flare-up of the conflict between Israel and HAMAS.
“As for European integration, its depth and speed, it is always the prerogative of member states. And one should take a calm attitude to the fact that some politicians have different viewpoints on this process. This is the essence and content of democracy in the European Union. There is nothing rigidly dictated, nor is there a single decision-making center. We must make a decision by consensus. Seeking a consensus in all the main issues gives us an advantage and guarantees that the interests of all countries — small, big, and medium-sized — will be taken into account in this process. But, on the other hand, this prevents one from making major leaps forward or unexpected breakthroughs in development.”
Mr. Ambassador, what do you think of the way Ukraine has been pursuing its goal to integrate into European organizations in the past year?
“I think the EU-Ukraine summit held in Paris last September produced essential results. A dialogue has opened on visa-free relations between the EU and Ukraine, talks are in progress on an associated membership treaty. Given the unbalanced domestic political situation in Ukraine and EU hesitations about the Lisbon Treaty, we made maximum use of the year 2008. Slovakia is taking an active part in this process. We regularly invite Ukrainian statesmen to Slovakia for consultations and transfer of the practical experience that we accumulated as we were successfully approaching the European Union and fulfilling our tasks, which finally enabled us to join the EU. We have people who remember the way it was going on. There is a very similar mentality and understanding that, in spite of all difficulties, these problems can be solved if one sets himself a goal to do so. You can also use some methods developed in Slovakia. I am sure that such an element in Ukraine’s Cabinet of Ministers as Bureau for European and Euro-Atlantic Integration will make it possible to improve coordination, as far as integration with Europe and the North Atlantic alliance is concerned. In my country, this approach has produced tangible results.“
Can we say that Ukraine’s integration into NATO is successful if this country never managed to obtain the MAP?
“You know, from the viewpoint of Euro-Atlantic integration, the last year was successful for Ukraine. Firstly, lets us take the results of the Bucharest summit. Never before has Euro-Atlantic integration been proceeding at such an early stage with the understanding that there is a final decision about this process. The North Atlantic alliance has promised Ukraine and Georgia that both countries will be NATO members when they are duly prepared for this. The problem of membership prospects has been solved.”
The train has left the station, as the NATO secretary-general said at a Brussels press conference after the meeting of the alliance’s foreign ministers...
“Yes, the train has left. I would even say more: we know the train’s destination. Naturally, it is not clear how fast it will be running. This will take more than one year.”
But Ukraine never obtained the MAP...
“The December meeting of foreign ministers in Brussels offered Ukraine an annual national program, which is in fact the MAP. Slovakia also used to accept this kind of MAP-style national programs. This program has the same content as the MAP does. Ukraine is entering today the penultimate stage of preparedness for North Atlantic alliance membership. There are two fundamental differences between the annual target plans that have existed before and the national program. Firstly, it is the alliance’s international secretariat that evaluates the fulfillment of a national program. Secondly, the program should spell out its goals and tasks as clearly as possible in order to make it easier to submit a report at the end of the year. In this case, one cannot say that something is being done or reformed, for example, ‘the plan has been 80-90 percent fulfilled.’ The question is: done or not done. This is quite a strong instrument, and we have felt this very well. For the assessment is made by experts who know very well the country’s conditions and the goals set and who point out, clearly and openly, the shortcomings. If a candidate wishes to work under this program and fulfill these instructions together with other countries, he will achieve the goal.
“What is also important, outside this program, is popular support because it is the entire country, not the political elite or a certain party, that enters NATO or the European Union. Ordinary people should understand what this is being done for.“
Can we say then that Ukraine may join NATO even without the MAP?
“The MAP remains behind. Nobody has canceled it. I think the main argument of the skeptics, who did not support the idea of granting the MAP, is that Ukraine is working on the declarative level only. When we see that annual programs are producing a concrete result on the practical, rather than declarative, level, then the main argument of the alliance skeptics will drop off by itself. I do not think that the alliance will be actively discussing the MAP question one or two years after the successful fulfillment of annual national programs, when it will be clear to everyone that Ukraine is seriously carrying out the reforms that are putting it step by step closer to the alliance.”
It has been widely suggested in the last while that the MAP is an instrument for implementing the reforms that Ukraine needs so badly. Do you think the Ukrainian elite is aware of this?
“This is a question not to me but to the Ukrainian elite. In late December, we held political consultations with Foreign Ministry officials, Vice-Prime Minister Hryhorii Nemyria, and a large number of players in Ukraine. I can say after those meetings that Ukrainian leaders are fully aware today that the national program really provides guidance for carrying out reforms. They understand that they should make use of this to reform Ukraine’s economy and bring the latter into line with basic EU and NATO requirements. We never stop emphasizing that the reforms that NATO needs are also indispensable for the European Union.”
You may have heard the arguments of those who oppose Ukraine’s accession to NATO. They claim we can carry out reforms even without joining the alliance...
“It is the same as your question about the introduction of the euro in Slovakia. You don’t have to go to the euro zone if you want to keep the inflation low and don’t want to boost the budget deficit or run up a foreign debt. It is clear to everybody what should be done to keep the economy and finances in good shape. But, for some reason, very few are doing this. For there is no external framework that would discipline politicians and force a new government to take over commitments from the previous one. It is external and domestic commitments to voters that can build this framework. Of course, reforms can be made without integration. But the question is: will you succeed without integration? Yes, one can go the way of the countries that are members of the European Union but not of NATO, such as Austria and Sweden. But how many years did it take these countries to effect the necessary changes? We should not forget that these countries have been politically and economically integrated (at least partially) into the European community since times immemorial. Slovakia’s European integration lasted for 20 years, but it took these countries 50 years to integrate. Therefore, European and Euro-Atlantic integration makes it possible to speed up the processes of modernization. One can also do without this. But in this case there should be wise and determined elites which will replace one another in the government and this will take much more time and energy. Besides, external factors should also be taken into account. For different countries cannot be in the same conditions.
“I am really convinced that post-communist countries can only modernize themselves by way of integration. We are so much stuck in the old legacy that it is impossible to take over the European experience and European standards and give the country a European look without this clear-cut framework. Our experience, mentality and surroundings will not let us perform this process on our own. What is more, this applies to both upper and lower strata. From top to bottom.”
Mr. Ambassador, and what is your attitude to the words of Verkhovna Rada Speaker Volodymyr Lytvyn who said in Moscow that NATO membership is not a pressing issue for Ukrainians and so Ukraine should think about netrality.
“I would not like to comment on the statements of certain Ukrainian politicians, including the Verkhovna Rada speaker. Their statements are part of the domestic policy. We are only watching and perceiving. Besides, statements and practical integration are different things. But they should be in unison at a certain moment. There should be no permanent difference between declarations and practical actions. This applies to both foreign or domestic policies. When declarations run counter to reality, this undermines trust in the country and its politicians on the part of voters. Declarations and reforms should go hand in hand in a country. Otherwise, this undermines the country’s authority.”
Mr. Ambassador, your country’s embassy is going to be NATO’s contact diplomatic office in this country for another two years. Are you tired of this work?
“No, we are not tired. We see that this is important. We must work with Ukraine. Ukraine is our closest neighbor on which we even greatly depend, as we see in the course of the gas dispute. I would very much like Ukraine to be a predictable and integrated country which works by the same principles and standards that we work in Slovakia. I am convinced that if Ukraine were at a more advanced stage of integration with the European Union and NATO, there would be no problem of gas supply to Slovakia of the kind that we see today.”
Are there any other problems in the relations between our countries?
“Gas is not a problem between Slovakia and Ukraine. We do not have specific contracts with Ukraine. But the problem in fact exists. I see no unresolved problems between Slovakia and Ukraine today. I see that our relations are really developing in the political, economic and cultural fields. And I am very pleased that I can take part in this process.”
