VZCZCXRO5397
RR RUEHIK RUEHYG
DE RUEHSL #0461/01 1631004
ZNR UUUUU ZZH
R 121004Z JUN 06
FM AMEMBASSY BRATISLAVA
TO RUEHC/SECSTATE WASHDC 9929
INFO RUEHZG/NATO EU COLLECTIVE

UNCLAS SECTION 01 OF 02 BRATISLAVA 000461 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV ECON KPAO SCUL LO
SUBJECT: EDUCATION, EU FUNDS, AND ELECTIONS 
 
 ¶1. Summary.  Education has been a quiet issue in this 
campaign, but will be a primary target for post-election 
reform and spending initiatives.  The GOS has prioritized 
education and the "knowledge-based economy" both in its 2006 
budget and its recently approved 2007-2013 plan for over 11 
billion euro in new EU convergence funds.  Other parties are 
eager to push their own education initiatives, but it is 
unclear whether they would use EU funds for education to the 
same extent that the GOS and especially Finance Minister Ivan 
Miklos would like.  In any case, EU funds serve to justify 
every party's promises to simultaneously cut taxes and 
increase spending, on education and elsewhere, without a 
concrete plan for how EU funds should be used.  End Summary. 
 
Problems and Promises 
--------------------- 
 
¶2. Throughout Slovakia, SDKU billboards with pictures of 
Finance Minister Miklos carry the slogan, "It's about 
Education."  The choice of slogan is an attempt to frame 
education -- which has remained untouched by the "reform 
agenda" over the past eight years -- as the GOS' top policy 
target for the next four years.  (Miklos himself has told 
people that he wouldn't mind being Minister of Education in 
the next government.)  Complaints about the education sector 
include the following: university graduates not meeting the 
needs of foreign investors, low teacher pay and quality, rote 
learning in secondary schools, large class sizes, weak 
university accreditation standards, poorly equipped 
tuition-free universities, and a shortage of quality 
technical schools.  To address these concerns, the Ministry 
of Finance pushed forward a 6.1 percent increase in the 2006 
education budget.  Mr. Miklos is also the architect of the 
Minerva Project, Slovakia's plan to become the next Ireland 
by upgrading the country's education system, science, 
research and development, business environment, and 
information technologies.  Future plans for the Minerva 
program are hazily defined in SDKU campaign literature, and 
the party's education platform provides few departures from 
current policy other than that public universities should 
have the right to charge tuition. 
 
¶3. SDKU's rivals provide more detailed campaign promises on 
education.  Smer calls for raising education expenditures 
from 4.4% to 5% of GDP, increasing science and research 
funding from 0.6% to 0.8%, and maintaining tuition-free 
university education.  SMK, a coalition partner, also calls 
for 5% GDP expenditure and for raising teacher salaries to 
the average national wage.  KDH goes further, calling for 
teachers to receive 120% of the average national wage.  HZDS 
calls for a near-tripling of science and research funding to 
1.5% of GDP and calls for more teachers and smaller class 
sizes.  Slobodne Forum would up the ante to 6% of GDP on 
education.  SNS, the nationalist party, keeps it simple: 
education is free. 
 
EU funds: how to spend 14 billion dollars? 
------------------------------------------ 
 
¶4. When discussing plans for education, taxes, health care, 
etc., parties do not talk directly about the elephant in the 
room -- European Union convergence funds.  Over the timeframe 
2007-2013, Slovakia will receive 11.24 billion euro from the 
European Union convergence fund, plus another 123 million in 
other EU funds for Bratislava, which is already above the EU 
average GDP threshold and therefore ineligible for 
convergence funds.  Divided over seven years, this amounts to 
approximately 63 billion SKK, or just over USD 2 billion per 
year.  Considering that the 2006 state budget is 330 billion 
SKK and all public expenditures equal 717 billion SKK, EU 
funds will add 19 percent to the state budget and over 8 
percent of all public expenditures.  It is questionable 
whether the GOS can even spend these funds effectively, 
considering that as of May it had only drawn 21 percent of 
the 1.2 billion euro in EU funds that it had been allocated 
for the 2004-2006 period. 
 
¶5. In May the GOS announced its National Strategic Reference 
Framework for EU funds for 2007-2013, i.e., it's preliminary 
allocations for EU funds.  Under this plan, 3.4 billion euro 
will be dedicated to transportation infrastructure, 2.6 
billion to the knowledge-based economy, 1.5 billion to 
regional programs, 1.45 billion to environmental protection, 
and roughly 1.43 billion to education, with the remainder 
left for other programs.  This breakdown is not so different 
from programs proposed by neighboring new EU members, but the 
amounts Slovakia has dedicated to transportation and 
education are higher than average.  This is especially true 
since its knowledge-based economy allocations appear to be 
direct investments in universities and related R&D.  The 
education and knowledge-based economy sections are the least 
clear portions of the plan, however, which leave room open 
for flexibility (and political rewards).  Transportation 
 
BRATISLAVA 00000461  002 OF 002 
 
 
funds, in contrast, are focused on specific highway projects 
such as Bratislava-Kosice and Zilina-Poland. 
 
¶6. These allocation levels can easily be changed each year. 
In fact, the new plan is already something of a dead letter, 
since officials from the poor eastern provinces of Kosice and 
Presov point out that under this plan their regions obtain 
less from cohesion funds than what EU regulations allow. 
Looking forward, any new government will likely make 
significant changes to EU funding priorities in order to 
fulfill its campaign promises.  Smer, for example, with its 
emphasis on health care, has indicated that it would 
dramatically increase spending in the health sector.  To 
accomplish this goal, it would certainly spend much more than 
the GOS' currently projected 200 million euro in EU funds on 
health, which suggests less funding available for education 
spending.  No political party has issued a concrete statement 
on exactly how EU funds should be used, as far as we can 
determine. 
 
Outlook 
------- 
¶7. Education is an issue that parties feel free to use as a 
laboratory, since EU convergence funds are available to 
underwrite almost any new policy initiative.  Each party's 
lack of discipline in putting together a clear platform for 
education and EU fund usage leaves it open to question 
whether an effective education program can be carried out 
over the next four years. 
VALLEE