Eastern Europe 2011

The Euro and Cars Put Slovakia on the Map

Before 1993, Slovakia was a part of Czechoslovakia. After that it was just confused with Slovenia.

But adopting the euro in 2009 "helped the recognition of Slovakia," according to a presentation by Jozef Sikela, the CEO of Slovenska Sporitelna - the country's largest bank, owned by Austria's Erste Bank.

UNSPECIFIED - FEBRUARY 07: Cathedral in a city, St. Martin's Cathedral, Bratislava, Slovakia (Photo by DEA / W.BUSS/De Agostini/Getty Images)
Dea / W.buss

Sikela said that in the mid-1990s Slovakia had no sound economic policies and no tradition of fiscal discipline. But the goal of adopting the euro was the catalyst that gathered public support for painful reforms needed to consolidate state finances, Sikela said.

It was worth it, apparently. Slovakia is now, together with the Czech Republic, considered a  relative safe haven, more so than many other countries, both in Central and Eastern Europe and in the euro zone.

"Public finances are in good shape; the structure of the economy is very good," Gyula Toth, head of EEMEA FI/FX Strategy, UniCredit, told CNBC.com.

The country's membership in the European Union and the prospects of joining the euro, together with generous aid from the state and a flat tax introduced in 2004, have brought a wealth of foreign direct investment from famous multinational names. 

Car makers are by far the biggest, making up about half of industrial production and around 60 percent of exports, according to Slovak Statistics Office data.

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German carmaker Volkswagen has two factories and has taken on an additional 1,500 people to start production on their New Small Family range. France's Peugeot-Citroen and South Korean Kia also have factories in Slovakia.

The country's second-biggest industry is electronics. Samsung has its biggest unit in Europe in Slovakia, with 3,000 employees. According to some Slovak newspapers it is the biggest non-financial company in the country.

Other big consumer electronics groups present in Slovakia are Foxconn, which manufactures liquid crystal display TVs and have about 3,900 employees; and Panasonic, with two factories and a total of 1,226 employees.