Electronic Library of Scientific Literature




Vol. VIII / No 1 / 1999


3 Príhovor šéfredaktora - Editorial


5 Jacques Santer

10 Years after the Velvet Revolution - The Enlargement Process is Irreversible
10 rokov po zamatovej revolúcii - Proces rozširovania je nezvratný

17 Grigorij Mesežnikov

Prezentácia vzťahu Európska únia - Slovensko hlavnými politickými aktérmi SR
Presentation of Relationship between the European Union and Slovakia by the Main Political Actors in the Slovak Republic

52 Dušan Dacho

Rada Európy ako východisková základňa pre členstvo v Európskej únii
The Council of Europe as a Platform for Membership in the European Union

82 Stanislav Košecký, Jozef Reinvart

Európa bez hraníc a hranice komunikácie
Europe without Borders and Limits of Communication

98 Daniel Futej

The EBRD and its Financing
Európska banka pre obnovu a rozvoj a formy jej financovania

110 Daneš Brzica

Analýza hospodárskych reforiem v Číne a pohľad na vývoj provincií Jiangsu a Hebei
China’s Economic Reforms and Development of Jiangsu and Hebei Provinces: An Analysis


136 Veronika Lombardini, Ján Kuderjavý, Milan Kurucz

Cesta Slovenska do Európskej únie
Slovakia’s Way to the European Union

144 Jozef Komorník

International Trends in Financial Risk Management
Medzinárodné trendy v manažmente finančného rizika

155 Daniela Nováčková

Contractual Obligations between the Slovak Republic and the European Community and its Member States with a Focus on the Approximation of Law
Zmluvné záväzky medzi Slovenskou republikou a Európskymi spoločenstvami a ich členskými štátmi so zreteľom na zbližovanie práva

165 Vlasta Kunová

Princíp subsidiarity
The Principle of Subsidiarity

173 Zbigniew Brzezinski

The Washington Summit and the ”Open Doors” Formula
Washingtonský summit a “otvorené dvere”


176 Peter Juza

J. V. Tichonravov: Geopolitika

181 Milan Koščo

7. Zasadnutie Ministerskej rady Organizácie pre bezpečnosť a spoluprácu v Európe
7th Meeting of the OSCE Council of Ministers


Grigorij Mesežnikov: Presentation of Relationship between the European Union and Slovakia by the Main Political Actors the Slovak Republic

Relations with the European Union presents one of the key dimensions of foreign policy of Slovak republic (SR). Preparation of the country to join EU is an important factor of its economic and political transformation. Situation of SR in this issue in 1998 considerably differed from the situation of other associated countries. On EU summit in Luxembourg in December 1997 Slovakia was the only one among all associated states evaluated as the country which does not respond to political criteria for entering EU and it was not included into the group of countries with which EU would start negotiations on the entrance. The analysis of interpretation of relations between European Union and Slovakia, given by the main political actors in Slovakia, helps to understand Slovakia’s failure in the integration process.

This article offers the presentation of relationship between EU and Slovakia by main political actors in SR. It contains description and brief analysis of reactions of political parties and state organs to selected ”communication events” related to the process of Slovakia’s integration into EU during the 1996-1998 period. The above mentioned ”communication events” included the sessions of the common integration entities of EU and SR and results of the debates, carried out within them, the published statements of the EU organs (European Commission, European Parliament) which regarded the level of preparedness of SR to begin negotiations about Slovakia’s entrance into EU and evaluated the different aspects of political development in SR (demarches, resolutions, judgements), the decisions of EU high organs, visits of EU representatives to Slovakia, statements of individual EU representatives and significant politicians from key EU country-members. Article contains analyses of the statements of Slovak politicians related to Slovakia’s involvement in the integration process and presented at different meetings (conferences, party meetings, assemblies organised by civic associations, discussions in media, etc.). It summarises arguments of the Slovak advocates and opponents of Slovakia’s membership in EU.

”Eurooptimistic” political parties (KDH, DU, DS, MK, SDĽ, SDSS a SZS), justifying the necessity to enter EU, refer to:

”Euroskeptical” political parties (HZDS, SNS, ZRS) which assumed negative (or at least unclear) attitude toward idea of Slovakia’s membership in EU, justified their approach using the following arguments:

Analysing the reactions of representatives of political parties and prominent state officials to ”communication events” related to the process of EU enlargement and Slovakia’s involvement in this process, we can make a conclusion that the most controversial feature about relations between SR and EU in the previous period was the evaluation of the level of Slovakia’s preparedness for membership in EU. Arguments used by the government representatives as well as the representatives of the then government coalition parties (HZDS, SNS, ZRS) opposing to statements and decisions of EU and justifying their own attitude among the domestic audience can be summarised as following:

Politicians from the then opposition parties agreed with critical evaluation of the different aspects of domestic development in Slovakia made by representatives and bodies of EU. There were no rejective or negative reactions of opposition parties to decisions of EU dealing with SR. Reactions of opposition parties considerably differed from reactions of the then government coalition parties. Although we can speak about certain ideologisation of the issue of Slovakia’s entrance to EU by all political formations, its necessary to add that representatives of the former opposition parties used predominantly non-ideological arguments.

As the controversial issues dealing with relations between EU and government of SR in 1996-1998 were connected with the distinct attitudes toward solution of domestic political problems, it was possible to predict that only in case of the radical changes in political development and fulfilment of required political criteria these issues can be solved. Results of the Slovak parliamentary elections in September 1998 and creation of the broad coalition of democratic ”eurooptimistic” parties (SDK-SDĽ-SMK-SOP) made more favourable conditions for such a variant of development.


Dušan Dacho: The Council of Europe as a Platform for Membership in the European Union

The Council of Europe will celebrate its 50th anniversary on 5 May 1999. This occasion offers a special opportunity to contemplate on the role this organisation has played in the history of Europe since the Second World War, on its present place in the system of European and trans-Atlantic structures, on the relation of Slovakia to this important pan-European organisation and, last but not least, on the contribution by the Council to the process of creation of democratic states in the region of Central and Eastern Europe and in the long run to their getting nearer to the integration to the EU, NATO and OECD.

The Council of Europe was founded by ten West-European States with the aim of bringing the states into a closer association, maintenance and further realisation of the ideals and principles which were their common heritage and in the interests of economic and social progress. Today the Council consists of 40 member states. Since its creation in 1949 the Council has the attributes of an association of European states which united in order to preserve and promote ”democratic stability”. In the Preamble of the Council’s Status the founding member states confirmed their ”devotion to the spiritual and moral values which are the common heritage of their peoples and the true source of individual freedom, political liberty and the rule of law, principles which form the basis of genuine democracy”. One of the basic obligations of a member state is, according to Article 3 of the Status, to accept the principles of the rule of law and of enjoyment by all persons of human rights and fundamental freedoms and to collaborate in the realisation of the aim of the Council laid down in Article 1 of the Status.

Over the 50 years of its history the Council has become a recognised international institution for the human rights dimension, a creator of a complex system of European agreements but also a parliamentary forum for discussions between representatives of different political parties and civic associations. The Council established the most elaborated regional mechanism for protection of human rights and fundamental freedoms, with a vast source of jurisdiction on their violations. As a forum for discussions on the most urgent problems of European society the Council covers a broad spectrum of humanitarian, economic, social, educational, cultural and ecological questions. More and more attention has been paid to questions of political character which are narrowly connected to the basis of the democratic political system.

States admitted to the Council over the last seven years, including Slovakia, are bound by identical obligations as the former member states and they identified themselves with the principles and goals of the Organisation. At the same time they took up the obligation to adopt all necessary measures for creation of a firm basis for respect for basic principles and values of democracy. The goal of the enlargement of the Council was to shape conditions for a peaceful transition of the countries of Central and Eastern Europe to pluralistic parliamentary democracies with functioning democratic institutions and mechanisms of a civic society.

As a result of political changes in Europe after 1990 the Council increased the attention paid to questions of security and stability on the continent. Its new political mandate determines the Council’s place in the system of international organisations and in the shaping of a new European security model. The Council’s mandate sets the goal of uniting European nations in understanding and realisation of democratic society and integration of the Organisation member states efforts in the settlement of urgent continental problems.

The character and structure of the Council of Europe are unique. Since its founding the Organisation has preserved the character of an inter-governmental institution, represented by ministers of foreign affairs of the member states in the Council of Ministers, which is the highest decision making body.

The Parliamentary Assembly of the Council, which is the oldest European parliamentary assembly, is the main consultative body. The Assembly is a very important body from a political point of view as it adopts resolutions on a broad spectrum of standing European issues and recommendations for the Council of Ministers and the member states.

Another advisory body of the Council of Europe is the Congress of Local and Regional Authorities of Europe which consists of representatives elected in communal elections in the member states.

From the above-said facts it derives that the Council of Europe encompasses in a unique form elements of executive and legislative power and self-government.

An important element in the structure of the Council of Europe is the mechanism supervising the implementation of the obligations stemming from the European Agreement on the Protection of Human Rights and Fundamental Freedoms. As a regional instrument of international protection of human rights the agreement is more elaborated as the Universal Declaration of Human Rights, adopted by the United Nations in 1949. The monitoring mechanism, created by the Agreement, enables the European Court of Human Rights to receive and take decisions on complaints alleging violations of the Agreement by the member states.

The Council of Ministers adopted another specific procedure for regular monitoring of the implementation by the member states of political obligations.

On the turn of the millennia the Council of Europe like other international organisations seeks its proper place in the shaping system of European institutions. This oldest European institution created originally as a union for democracy should play in the new European structure the role of an important stabilising element in the newly admitted member states from Central and Eastern Europe. In this sense the Council of Europe should be considered a preparatory platform for the membership in the European Union. The Council should be therefor understood not only as a partial international forum where Slovakia can promote its interests and seek its goals but it should be also perceived in a broader context as a paramount stage in the process of integration into the European Union.

The National Council of the Slovak Republic identified itself with the values of democratic countries in its Proclamation to the Parliaments and Peoples of the World of 3 December 1992. In the Proclamation it declared i.a. its readiness to accept the membership in the Council of Europe with the related obligations. Slovakia became member of the Council on 30 June 1993.

A basic prerequisite for qualitative and effective fulfilment of the adopted obligations by member states is the existence of a monitoring mechanism. Within the Council of Europe the monitoring is realised at three separate levels: at the level of the Council of Ministers, at the level of the Parliamentary Assembly and at the level of the European Court of Human Rights. The last of the listed is the oldest control mechanism of the Council and is of exclusively legal character. The subject of its control is the fulfilment of the obligations stemming from the European Agreement on Human Rights.

The core of the foreign policy of Slovakia towards the Council of Europe in the nearest future should be the definition of national priorities and the priorities of the Council itself as contained in the Plan of Action adopted by the Second Summit of the Council of Europe in 1997. Its expression should become the contribution by Slovakia to the confirmation of mutual values of the Council - democracy, human rights, the rule of law, personal security, social cohesion and cultural diversity. All the listed values are enshrined also in the Constitution of the Slovak Republic and the documents constituting the political basis of the Slovak statehood. Through the fulfilment of these priorities Slovakia can at the same time bring its contribution to the settlement of issues identified by the Council and in this way confirm its firm orientation towards the values of stable democratic Europe and create conditions conducive for its admission into the European Union. These premises should lay in the basis of the Slovak foreign policy towards the Council of Europe.

At the national level the standing task is strenuous participation in activities of the Council and the harmonisation of national legal norms with those agreements of the Council to which Slovakia is a party. As the agreements of the Council form the socio-humanitarian background of the economic norms of the European Union the harmonisation of legal norms of Slovakia with them is at the same time an inseparable part of the process of approximation of the Slovak codex of law to the law of the European Union.

The Council of Europe is built up on the same values as the European Union. Active work in the Council therefor assists Slovakia in getting closer to the Union. The better Slovakia performs in the Council the closer it is to the integration into the Union. The same pattern is valid in the case of the NATO. The road to the NATO, for Slovakia, leads, also through meeting ”democratic stability” criteria in Council of Europe. A nation which would have grave problems from point of view of the Council can hardly hope to be admitted into NATO and vice versa.

Over the second half of the 20th century the Council of Europe has become one of the most important European organisations encompassing almost all European states. Its original goal was the renaissance of traditional European values and on their basis the unification of those states that support these values. Although history took a different turn and the European Union became ”the hard core” of the unification process, the Council contributed in an important way to prevention of creation of new dividing lines on the continent after the Cold War. Since its creation by a group of present member states of the European Union, the Council of Europe has thus become a mechanism not only of their unification but step by step has evolved into a platform for preparation of the candidates for membership in the Union and for bringing nearer to the European values those states which do not aspire for the membership in the European Union, at least not yet.


Stanislav Košecký, Jozef Reinvart: Europe without Borders and Limits of Communication

The unification process of Europe, the integration process is characterised by elimination of the existing barriers. The process is not only an economic-political process or social-legislative but it has also dimensions that are in the shadow of its material dimension at the moment. If we want to have Europe as a multinational and equal community of members it is not possible to neglect any sphere of the whole process and therefore also the sphere of the international communication which is the foundation of cultural integration and it concerns all spheres.

The article 217 of the Treaties of Rome is the legal base for the EU language policy that has practically embodied the principle of language equality applied at present.

In comparison with the EU, the United Nations has started since its beginning to implement a principle of language selection based on a ”six language communication” on the background of 185 member countries. However it is a serious violation of the basic human rights referred to in the Charter of the UN and the Universal Declaration of Human Rights.

The EU language order seems to be at the first look without any problem till the moment when we start to deliberate upon a technical and economical side of the problem.

The EU already now is not able to ensure a full interpretation at the current status of 11 official languages and their 110 two-way interpretation channels. The EU makes an effort to reduce the enormous expenditure for these services by means of the so called ”relay interpretation”. The practice shows that the use of this kind of interpretation increases significantly the possibility of errors and misunderstandings. As there is no primary language selection in the EU, in practice it applies the so called secondary, i.e. internal selection differentiating among important or less important languages.

What is the perspective for the EU in case of enlargement? The associated countries of the first group expressed unambiguously during the common opening of negotiations in March 1998 their request for acknowledgement of their own languages for EU official languages at the moment of their accession to the organisation. The expected increase of the number of languages and the number of two-way interpretation channels will be extremely high (at 15 languages - 210 two-way interpretation channels and 18 languages - 306 channels) which the EU may not be able to ensure from the financial and technical point of view at all.

We can mention some options that have been proposed in order to solve the complicated language communication, for instance: to continue in the complete equality of languages, accompanied however, by a considerable cut of expenditures; the citizens of European countries should master better more languages; to be contented with passive knowledge of more languages; to make possible competition of languages; to introduce a so called ”lingua franca”, i.e. leading national language, or to use an existing neutral non-ethnic planned language; to limit a number of languages; to divide the EU into ”subunions” and in each of them choose a common language for group of states.

It is necessary that the EU Member Countries start a frank and democratic discussion on the topic, establish which of the mentioned options comply with the EU democratic principles and seek an option acceptable for the all EU Member Countries and the countries of the future unified Europe.

A Working Group on the language problem in the EU studies the possible solutions to the language problem in the context of the future EU enlargement. In its conclusions and recommendations presented in Brussels in November 1996, the Working Group has presented three options: 1. all languages have to be treated the same; 2. one national or common language must fulfil the function of interethnic communication; 3. two foreign languages, i.e. one neutral language model and one national language. According to the Working Group the most convenient option would be the use of two foreign languages, i.e. a combination of an effective interethnic communication and a protection of cultural and language diversity. The first foreign language that would be a neural language model could guarantee equality, efficiency and interethnic (multilateral) communication. The second foreign language could be any national language of personal preference. It will be necessary to adopt a political decision on the recommended option that would enable to start with scientific studies on neutral language models (planned languages).

The EU basic documents, the Treaty of Maastricht but also the Treaty of Amsterdam devote to the question of language use and language policy only marginal attention. But the European Policy Centre in Brussels draws attention to the need of finding a solution of the problem in its analytical material and among the tasks of high urgency solutions i.e. ”reforms needed before enlargement” it gives a task of ”reform of language system”. Generally valid is a fact that the language problem remains a strict taboo. It is demonstrated also by the fact that there is no reference or allusion on a reform of the EU language system in the Agenda 2000, the document for a stronger and wider Union.

A lecture event dealing with the taboo sphere was organised in the House of Europe, in Bratislava, in October 1998 under the title ”Europe and the language problem - present situation and perspectives”. The secretary of the Working Group on the language problem in the EU, Hans Erasmus from The Netherlands, explained the language problem in the EU and the present concept of its solution in a form of ”multilingualism” developing in practice thus far without control. From the 3 mentioned options he recommended as an optimal the use of two foreign languages, i.e. alongside with the native tongue one common planned language easy to learn, such as Esperanto which meets extraordinarily well all the standards, principles and political aims of modern society, the democratic countries and the International Organisations: equality, language and cultural diversity, non-discrimination, efficiency, transparency, European dimension and multililingualism. He provided an information on the experimental project NEIGHBOUR that has been submitted to the professional public by the Chair of Interlinguistics and Esperanto of the University of Amsterdam. The project aim is through a neutral, easier to learn language to help European citizens in study of foreign languages and in a final consequence to simplify the communication and make it equal and less expensive in all spheres of international interaction. The second guest of the House of Europe, President of the International Academy of Sciences in San Marino, Helmar Frank, from Germany provided a retrospective on the international language communication from the Middle Ages and highlighted the positive role of Latin, the language without ethnic representative, a neutral language that met appropriately the role of a communication vehicle in the society, community of multiethnic composition.

The President of the Association for European Consciousness in Maribor Z. Tišljar highlights in his study ”European Ideology” a fact that the EU needs a movement which would encourage a European consciousness and identity as a primary identity of each citizen of being a European. Such a consciousness requires the most important sign of the identity, i.e. an European language. Enforcing a national language as a vehicle of supranational identity could have serious consequences for the process of integration and could lead even to violation of its cohesion. It is important to bear in mind the negative examples of the imposition of Russian in the former Soviet Union or of Serbian in former Yugoslavia.

Unlike politicians and national or international bureaucrats, primarily the linguists, the experts dealing with the Interlinguistics (planned languages) and communication in multilingual Europe begin to take into consideration the urgency of a solution to the relevant questions by respecting the already mentioned principles. They met at the preparatory conference in Oegstgeeste, The Netherlands, in October 1998 under the title ”Which Languages for Europe?”. The experts discussed languages in civil Europe - education, communication and identity, languages in political Europe -communication, representation and democratic control, and new language policies for Europe.

In the interest of further successful enlargement and integration the EU has begun with a language reform and to prepare a new language policy for the future, first of all for a politically strong integrated Europe, even though economies of the associated countries will be integrated at different speeds. The conclusions and recommendations of the preparatory conference will be presented at a conference under the same name to MPs of the European Parliament in Brussels in April 1999. Perhaps it will be the appropriate impulse for politicians to start serious discussions on the unresolved sphere of the European integration process.

The highlighted problems that accompany the development of ideas for a future unified Europe can not be ignored or tabooed. It is necessary to discuss them on a partner level in order to search and apply democratic political solutions. This is the way how to strengthen mutual trust, cohesion and create a new higher quality in the international relations on our continent.


Daniel Futej: Európska banka pre obnovu a rozvoj a formy jej financovania

Európska banka pre obnovu a rozvoj (ďalej len “EBOR” alebo “banka”) vznikla v apríli roku 1991 ako prejav dramatických politických, ekonomických a sociálnych zmien v strednej a východnej Európe. Zmluva o založení Európskej banky pre obnovu a rozvoj (ďalej len “Zmluva”) bola podpísaná v Paríži dňa 29. mája 1990 39-timi krajinami, spolu s Európskou úniou a Európskou investičnou bankou. V súčasnosti má 60 členov (58 štátov, Európske spoločenstvo a Európska investičná banka). Je to prvá nadnárodná inštitúcia, ktorej osobitným poslaním je podporovať krajiny strednej a východnej Európy pri ich prechode na trhové hospodárstvo.

Najväčšími európskymi akcionármi sú Francúzsko, Nemecko, Taliansko a Veľká Británia, z ktorých každý má podiel na základnom kapitáli vo výške 8,5%. Najväčšími akcionármi mimo Európy sú Spojené štáty americké s podielom 10% a Japonsko s podielom 8,5% zo základného kapitálu banky. Bývalý ZSSR má podiel 6% na základnom kapitáli banky. Pôvodný základný kapitál banky bol 10 miliárd ECU. V apríli 1997 Rada guvernérov rozhodla o jeho zvýšení na súčasných 20 miliárd ECU. Slovensko sa stalo členom EBOR 1. januára 1993. Napriek tomu, že je členským štátom, pre ktorý vyplývajú práva a povinnosti najmä zo Zmluvy o založení Európskej banky pre obnovu a rozvoj, Slovensko doteraz túto zmluvu nepublikovalo v Zbierke zákonov. V tomto zmysle Slovensko nenaplňuje literu článku 54 Zmluvy, ktorá hovorí, že všetky členské štáty sú povinné prijať také opatrenia, ktoré by umožnili právne vynútiť príslušné ustanovenia Zmluvy.

Každá členská krajina je zastúpená v Rade guvernérov (Board of Governors) jedným guvernérom a jedným náhradníkom. Rada guvernérov ako jediný orgán je oprávnená schvaľovať audítorskú správu, určovať výšku rezerv banky, ako aj rozdelenie čistého zisku banky. Okrem toho si môže vyhradiť rozhodovanie o akejkoľvek veci, a to aj o takej, ktorú predtým delegovala na Radu riaditeľov (Board - of Directors). Rada guvernérov však nie je oprávnená delegovať na Radu riaditeľov nasledujúce oprávnenia: (i) rozhodovať o prijímaní nových členov a určovať podmienky ich prijatia, (ii) zvýšiť alebo znížiť základný kapitál banky, (iii) pozastaviť členstvo v banke, (iv) rozhodovať o odvolaní ohľadne interpretácie alebo aplikácie Zmluvy, (v) schvaľovať uzatvorenie zmlúv o kooperácii s inými medzinárodnými organizáciami, (vi) rozhodovať o ukončení pôsobenia banky a o rozdelení majetku medzi jednotlivých členov v prípade zániku EBOR a (vii) rozhodovať o zmenách Zmluvy. Rada guvernérov volí členov Rady riaditeľov a Prezidenta banky a schvaľuje ich odmeny.

Napriek tomu, že sídlo banky sa nachádza v Londýne, na koordináciu svojej činnosti má banka vo viacerých krajinách strednej a východnej Európy zriadené svoje stále zastúpenia. V súčasnej dobe je zriadených 28 zastúpení. V porovnaní s inými medzinárodnými finančnými inštitúciami má EBOR okrem svojho regionálneho zamerania schopnosť pôsobiť vo forme poskytovania finančných zdrojov vo verejnom a súkromnom sektore. Táto banka je ocenená najvyššou triedou bankovej bonity (ocenenie AAA), a môže preto na medzinárodných kapitálových trhoch získavať finančné prostriedky za cenovo najlepších podmienok. Koncom roka 1997 zisk banky bol 193,8 miliónov ECU, a bolo to takmer dvakrát viac ako v roku 1996.

Úlohou banky je pomáhať krajinám strednej a východnej Európy pri ich prechode na trhové hospodárstvo a podporovať najmä rozvoj súkromného sektora v týchto ekonomikách. V porovnaní so súkromnými komerčnými bankami spočívajú hlavné prednosti EBOR najmä v jej schopnosti brať na seba väčšie riziko, a to aj politické, čo vyplýva z jej akcionárskej štruktúry. Táto jej schopnosť umožňuje jej pôsobenie v geografických oblastiach, ktoré sú pre medzinárodnú bankovú sféru zatiaľ nepreskúmané a neznáme. V tomto zmysle má EBOR úlohu finančného prieskumníka, ktorý mapuje riziko spojené s financovaním projektov v jednotlivých krajinách, v ktorých banka vyvíja svoju činnosť.

Banka poskytuje priame financovanie v oblasti súkromného a verejného sektora, reštrukturalizácie a privatizácie alebo financovanie infraštruktúry, ktorá podporuje tieto činnosti. Štandardná minimálna čiastka úveru vyžadovaná od banky je 5 miliónov ECU, avšak táto čiastka môže byť aj nižšia, ak má projekt pre krajinu zásadný význam. I keď priame financovanie malých a stredných podnikov nie je prioritou financovania banky, má niekoľko nástrojov, ktorými dokáže napomôcť ich financovanie (záruky, podielové fondy, úvery). V praxi sa priemerná výška úveru poskytnutého bankou pohybuje okolo 18 miliónov ECU; s tým, že v súkromnom sektore je to 16 miliónov ECU a vo verejnom sektore 25 miliónov ECU.

Formy financovania, prostredníctvom ktorých banka realizuje svoj mandát, sú nasledovné:

V Slovenskej republike sa javí, že Banka by sa mala usilovať zvýšiť financovanie vo forme majetkových vkladov (ekvitné financovanie) na podporu budúceho rastu spoločností na Slovensku. Za účelom získania ekvitných mandátov by mal príslušný slovenský tím Banky pripraviť jasný marketingový plán pre akcionárov, keďže pri rozhodovaní o zvyšovaní kapitálu sú títo rovnako dôležití ako manažéri. Zdá sa byť užitočným, ponúknuť financovanie veľkým priemyselným holdingovým spoločnostiam a rôznym finančným skupinám. V prípade úverového financovania bude potrebné, aby si Banka osvojila pružný prístup, využila svoje skúsenosti a neobávala sa navrhovať inovačné formy financovania. Na druhej strane by však tam, kde je to vhodné, štruktúra obchodov mala byť čo najjednoduchšia (len majetkový podiel alebo len čisté úvery a vyhnúť sa kombinácii úverov a majetkových podielov alebo použitiu neprehľadných finančných nástrojov). Banka by mala vylepšiť manažment svojich projektov v zmysle riadenia procesu, predvídania a dodržiavania časového plánu. Bankou používaná právna dokumentácia, ktorá je často veľmi ťažkopádna, by sa mala zjednodušiť.

Zdá sa, že Banka by mala posilniť svoje zameranie na Slovenskú republiku obzvlášť pri podporovaní privatizácie, reštrukturalizácie a napomáhaní financovania dlhodobých úverov a financovania majetkových podielov, ako aj zlepšovaní riadenia novoprivatizovaných spoločností.


Daneš Brzica: China’s Economic Reforms and Development of Jiangsu and Hebei Provinces: An analysis

The paper covers those areas of economic reforms where success or failure will have direct influence on China’s development - macro economic policy, foreign direct investment (FDI), foreign trade, financial market, education, state enterprises and the banking sector. Although these issues do not cover all reform topics, they are very important for the pace of economic growth. The paper gives also some more information on two of the most developed provinces of China, Hebei and Jiangsu. Both represent coastal areas with high presence of foreign investors. These provinces also support cooperation with other countries and they can serve as representatives of the ”developed area” part of China.

Unlike small transforming economies, large ones have a limited possibility to use external support for solving their instabilities. During several decades some transformation models have been developed. Among them often quoted are the Russian radical transformation model and the Chinese gradualist model. Economic reforms in China are based on the principle ”development through stability.” With respect to large population in the country and to the results of the Russian reform such process is slower but socially more stable. As it was recently announced by the Prime Minister Zhu Rongji, China wants to complete reforms in certain areas - mentioned were housing, state enterprises and financial system - until the end of year 2000.

Economic and political goals of the government can have substantial impact on macro economic development. For the period 1998-2000 China has decided to invest into infrastructure projects 1.2 bn USD. Its priorities, as, e.g., short-term growth and regulations, are important factors of the development. As concerns the currency, RMB, the government wants to maintain its stability. High trade surplus and substantial volume of foreign reserves, approximately 140 bn USD, give possibility to maintain the currency’s stability. According to the Chinese experts the financial situation in 1997 was stable especially thanks to continuation of banking sphere reform, the improved mechanism of monetary adjustment, changes in mechanisms of risk prevention and tighter supervision and control over financial institutions. It was especially the reform of banking and the enterprise sphere that is important for economic stability. Pressures on currency exist but it is not probable to expect, according to local experts, in the future some changes in the exchange rate of RMB. Since early 1980s until 1995 its exchange rate toward USD devaluated from 1.5-3.0 RMB per 1 USD to 8 RMB per USD. Savings at the end of 1997 reached 8.239 bn RMB, which was increased by 18.6% more than in 1996. Enterprise savings increased by 18.4% and represented 2865.6 bn RMB. At the end of the year the volume of monetary aggregate was M0 1017.8 bn RMB (increase by 15.6%), M1 3482.6 bn RMB (16.5%) and M2 9099.5 bn RMB (17.3%). Following its regulation and policy of fighting inflation the government could use also state enterprises.

With deterioration of the economic situation in the Asian region also China tries to follow more pragmatic approach toward FDI. In the past FDI represented an important stimulus for the economy. FDI expressed as an average percentage share on gross formation of domestic capital for the period 1991-1996 represented in FDI outflow 1.4% and for FDI outflow 13.8%. Whereas in early 1990s foreign firms were eager to gain a position on the market, now they are more careful and evaluate their presence on foreign markets. Despite some restrictions for foreign firms to remain in certain areas, e.g., in banking and telecommunications, where behavior of managers and state officials is more pragmatic. The attempt to help investors is given by worsening prospects of domestic firms to compete in global competition. The social factor is an attempt to maintain employment in large state enterprises where reduction due to restructuring has reached so far about eight million workers. Another, economic, reasons for such pragmatism is lack of capital and technologies.

Foreign direct investments are a priority of foreign economic relations. Their importance is given by several advantages. One of them is the fact that unlike of portfolio investment they are stable element supporting long-term growth and efficiency of domestic enterprises. Another advantage is the absence of risk of the outflow of investment from a country, a feature typical in portfolio investment. Characteristic feature for FDI inflows is that in the past years substantial volume of investment entered China via Hong Kong and from Chinese business people living abroad. Only smaller part was from transnational corporations.

China continues to use its position for gaining advantageous agreements for technology transfers and offers foreign investors some new incentives. Now foreign investors have the same tax relieves as have domestic enterprises. In Pudong development area investors operating in high-technologies can pay their land rental payment on annual basis instead of traditional 50 or more years advanced payments. However, there are voices that whereas development zones have helped to economic development, direct incentives to foreign investors as some advantages have negative impact.

China has been more involved in international economic cooperation. This is reflected also in growth of its role as one of Asian economic leaders. According to experts China is the second most important growth engine in Asia. With the dismantling of multi-fibre agreement and introduction of the Uruguay round agreements, international environment can become favorable not only for exports of products from traditional labor-intensive Chinese industries, but also for technology-intensive goods. Improvements in trade will, to a large degree, depend on speed and smoothness of transition of the Chinese domestic methods for regulation of the economy toward the international trade regime and international rules. Foreign trade continued in 1997 in its development. Total volume of imports and exports reached in 1997 325.1 bn USD, which represented a 12.1% increase compared to the previous year. Exports grew much quicker than imports, which resulted in trade surplus of 40.3 bn USD. Volume of imports and exports of FIEs increased in 1997 by 11.3% in comparison with the previous year. Multi-market strategy of foreign trade has been increasing followed by higher trade activity with Latin America and Africa. Chinese production has been for many years a problem for some countries, especially for the USA. China´s high trade surplus is seen in the growth of foreign reserves, which can finance yearly volume of Chinese imports. On the other hand, in 1997 the pace of exports declined which lead to some worries and to orientation of some firms more on the domestic market.

Chinese state enterprises need reform, but the problem is the risk of high unemployment that the government wants to avoid by following ”crowding out” policy. This policy means that state enterprises are crowded out by new non-state firms. The process is supported by inflow of FDI. In 1997 China signed contracts for capital in volume of 61.7 bn USD. In comparison with 1996 this represented a decrease by 24.2%, but the capital used recorded the increase by 8.5%. Realization of contracts and the structure of foreign investments has improved. One serious problem is general decline of state enterprises’ economic results. Chinese economists want to analyze what is the position of state enterprise in the system of Chinese economy and why, after several years of reforms, the state enterprises are not able to solve their business problems and how they can efficiently integrate into market economy. The paper provides more detailed data about their performance comparing town and village enterprises performance with that of state enterprises. As foreign research shows, total factor productivity grew more in non state enterprises and the share of town and village enterprises grew dynamically from 4% in 1980 to one-third in 1993. Mentioned are reasons why it will be difficult to reform these state enterprises. One way is to use standard bankruptcy procedures. Existing regulation is discussed in more details in the text.

However, the state sector in China still dominates, both in number of firms and structure. The number of state industrial enterprises on total industrial enterprises represented recently more than 1%, 53.7% in total assets, more than one third in income from sales and less than one third in number of employees. Important is their role in some important industries. They hold for example 77.7% in mining industry and 95.4% in petrol and gas industry. State firms dominate also in finance, communications, railways and air transport.

Capital market plays an important role in China but it is still underdeveloped if compared to developed countries’ standards. An exemption is the Hong Kong stock exchange which has a tradition. However, the process of standardization and tighter supervision continues. In 1997, 188 companies issued A-type shares at stock exchanges in Shanghai and Shenzhen. Number of companies with issued A-type shares listed on these stock exchanges increased between 1996 and 1997 from 530 to 745 with total value of 1752.9 bn RMB. Other types of shares and bonds abroad has brought capital in volume of 8.1 bn USD. Problems remain with the high share of bad debts provided by state banks. Some problems are linked to the non banking financial institutions and to various kind of bank operations. In the future the role of the capital market will probably increase as this can be another source of money now provided by state banks often on non-market criteria. Necessary bank restructuring therefore is expected.

Education is a basic precondition of successful reform and this holds also for China. There are some problems like the fact that education abroad can be offered only to small number of students and it is not clear how many of them will later return home. Development of scientific contacts is a consequence of higher interest of the young Chinese generation in study of English language. Communication barriers, however, still continue to be among the factors hampering development of international relations on wide-range bases. Education system was represented in 1996 by more than one thousand of universities, approximately one hundred schools of secondary education and nearly 650 thousand elementary schools. In the institutions of higher education only 4% of people from the age group 18-21 years were enrolled in mid-90s. With growing urbanization can be expected that conditions for education will improve.

As concerns regional policy, in China today live nearly one-third of the whole population in urban areas and the rest in rural ones. This distribution of population shows high differences in living standards. In the first period of reforms regional policy had concentrated on economic development by creating of coastal business zones. The plan to support economic growth also in fewer developed areas starts after the period of high dynamics of these areas. The hand over of Hong Kong represented strengthening of the Chinese economy. But in the future Hong Kong’s position will not be such as in the past. Competition between provinces and cities is growing and Hong Kong will face important competitors, among them Shanghai, the biggest trade center of the country with approximately 17 mn people.

Change in regional policy, by shifts of support priorities from coastal provinces to other areas, is not enough for equalization of regions. It is also important to stimulate domestic demand to maintain growth rates. Central government sets as a growth target 8 percent growth but it is ”orientation goal” rather than ”obligatory” one. The goal to establish ”poles of development” lead in the past to creation of special economic zones (”special zones”) and later also economic and technological development zones (”economic zones”). Whereas special zones were established first on the south and after 1984 they have spread to all important parts of coastal areas, economic zones were established in fourteen open coastal cities. An important role in regional development is played by developed coastal provinces in East and South-East China. Among them are also Jiangsu and Hebei provinces. The Jiangsu province has recorded great success in trade, in attracting FDI and other economic areas, since 1978, when Chinese economic reform and open-up policy started. The Jiangsu province is located in the center of the Eastern coast of China and has population of 71.48 mn. Under the province administration is 13 cities and under them 64 regions and region-level cities. The gross national product of the province increased from 24.90 bn RMB in 1978 to 668 bn RMB in 1997. It represents average growth of 12%, which is more than national average. The province ranks first in China as far as number of research institutes and institutes of higher education and science is concerned and is among the most developed provinces. This region also in the past had participated in the strategy of export-oriented economy. Following this strategy lead to the development of foreign trade and to FDI inflows. Province population support two key changes - deepening reform as an incentive factor and an adjustment of structures as a goal. The capital of the Jiangsu province is Nanjing. It is a large city in the Yangtze river basin and after Shanghai it is also the second most important center in Eastern China. The city uses economic growth based on activities of secondary and tertiary sectors. Quickly are developing tertiary industries and value added represents 43% of its GDP. Also export of the Jiangsu province has quickly increased. Whereas its total volume for the province in 1981 was only 1.097 bn USD, then in 1996 it reached 15.218 bn USD, a fourteen fold increase in 17 years. At the end of 1997 the number of passed foreign investment projects in the Jiangsu province reached 35000. The total contracted foreign capital reached 63.6 bn USD and used foreign capital was 30.3 bn USD. In the province invested foreign firms from 120 countries and regions, among them 164 important financial groups and multinational corporations. Today the province has its own representatives in more than 20 countries and regions. The province has gained a good position in foreign-trade relations by introducing strategy of internationalization and multilateral agreements. It has created good trade relations with Kazakhstan, Russia, Belorussia, Germany and other countries. Another important city is Lianyungang, which also uses open-up policy for its own development.

The Hebei province, located on the Eastern coast, has good connections with Beijing and other important cities and good transportation infrastructure including several large ports. Qinhuangdao port ranks second among Chinese coastal ports. Currently the province has created economic and trade linkages with more than 160 countries and regions and 43 ”sister cities.” At the end of 1997 the total volume of foreign investment was more than six billion USD and 2780 firms with foreign participation were established. The province has nearly eleven thousand enterprises with annual volume of sales over five million RMB and more than 1100 large and medium-sized enterprises.

The paper could not cover the complexity of problems the Chinese government is facing in reform process. On the other hand, facts shows that with respect to the need to solve basic problems as, e.g., to deliver food to the growing number of populations, to ensure the social consensus for the future development and to maintain sustainable growth, represents current reform process a positive feature of the Chinese economic policy. Possible changes of external conditions because of Asian financial crisis or longer-term structural processes can influence the Chinese economy. On the other hand, the large domestic market enables a possibility to produce efficiently using economy of scale also inside its own borders. There exist several development scenarios, but it is not clear, which one will be followed because of wider political and economic aspects. However, it is possible to expect that the economic position of this country will increase as will deepen these parts of reforms we have mentioned here.

It is difficult to analyze the situation in China with respect to an uncertain orientation and changing pace of reforms. A rapid start is followed by slower periods and the state administration permanently adjust imbalances and priorities as new challenges have occurred. Our description of the situation leads to the conclusion stressing importance of dualism for Chinese reforms. Nevertheless, there are many issues to be solved in the near future to maintain current dynamics. This requires to do some more things than what has been done so far. However, the size of the local market and high rate of savings can contribute to the increase of GDP growth.


Veronika Lombardini, Ján Kuderjavý, Milan Kurucz: Slovakia’s way to the European Union

When Slovakia signed the European Agreement in 1993, there was no doubt about its simultaneous accession invo the European Union with other three countries of the Visegrad group. The Slovak Republic delivered its formal application for accession to the European Union in 1995. Due to non-standard political circumstances, the Luxembourg Summit in 1997 decided not to invite Slovakia to start the accession negotiations, but it didn’t exclude the country from the enlargement process.

The elections in autumn 1998 brought fundamental changes in country’s internal politics. Intensive participation of the SR in the integration process has become the dominant issue of the Slovak foreign policy. The European Commission has decided to express its support for the new development in Slovakia and to reassure their common interest in taking off the shortages of the preparation for EU"membership as soon as possible. The High Level Working Group of the Commission and the Slovak Government has been established in order to speed up the pre-accession process.

Common institutions, established under the European Agreement, represent significant support of Slovakia’s integration efforts. The 7th session of the Joint Parliamentary Committee of the EU and the SR as well as the 5th meeting of the Association Committee which took place in January 1999, have been in comparison with the past carried out in considerably new atmosphere.

Within a short period of time extensive changes took place in the structure of the institutions responsible for the European Integration. Ministerial Council for European Integration as a political body has been set up in order to coordinate policies of individual ministries.

An action plan for short-term priorities fulfillment in the field of the European integration was adopted by the Government, covering key areas of the pre-accession strategy. It consists of measures to be taken in political sphere, economy, harmonization of legislation, protection of environment, public administration reform, etc. which are inevitable in order to join the Common Market.

In 1998 the National Program for the Adoption of Acquis was elaborated and approved. This key document of the pre-accession strategy is based upon the Accession Partnership priorities and sets out both legislative tasks and plans for financial, organizational, institutional and personal strengthening of administrative capacity of Union’s legislation implementation and enforcement. Renewal of the economic balance and re-structuring of the economy, including its financial and banking sectors is one of the most important tasks of the pre-accession strategy.

Slovakia is entering the phase of bilateral screening in spring 1999, which is a substantial part of the preparation for accession negotiations. Slovak Government is expecting that the Helsinki summit decides to open accession negotiations with some countries of the second wave including the Slovak Republic.


Jozef Komorník: Medzinárodné trendy v manažmente finančného rizika

Z pohľadu firmy je možné definovať veľkosť rizika ako mieru neurčitosti budúcich hodnôt (volatilitu) majetku alebo jej hotovostných tokov.

Finančné riziko súvisí s možnými stratami na finančných trhoch spôsobených pohybmi finančných veličín, ako sú úrokové miery a devízové výmenné kurzy.

Finančné inštitúcie sa usilujú o aktívny manažment rizika. Uvedomujú si, že musia vedieť analyzovať a merať riziko, aby ho vedeli správne kontrolovať a oceňovať. Manažment finančného rizika sa stal dôležitým nástrojom pre prežitie všetkých ekonomických subjektov. Najdôležitejším dôvodom pre rast odvetvia manažmentu rizika bola zvýšená premenlivosť finančných veličín v priebehu posledných troch desaťročí.

Po zrušení systému fixných výmenných kurzov v roku 1971 sa prudko zvýšila ich variabilita. Napríklad ročné kolísanie výmenného kurzu USD a DM predstavuje často 10-15%, čo môže úplne vynulovať typickú ziskovú maržu firiem s významnými medzinárodnými aktivitami.

Po roku 1973 prišli prudké výkyvy cien ropy sprevádzané v rozvinutých i rozvojových štátoch vysokou infláciou a dramatickými zmenami úrokových mier.

V októbri 1987 padli americké akcie o 23%, čo znamenalo sumárne zníženie hodnoty kapitálu o vyše miliardu USD.

Po roku 1989 padla hodnota japonských akcií za 3 roky o 2,7 bilióna dolárov. Neobvykle vysoká volatilita základných finančných veličín vyvolala prudký rozvoj finančných derivátov, ktoré poskytujú tvorivé spôsoby pre prevenciu finančného rizika, ako aj pre špekulácie na ňom založené.

Existuje niekoľko typov finančných derivátov vrátane forwardov, futurít, swapov a opcií. Riziko výmenných kurzov možno eliminovať devízovými (menovými) forwardmi, futuritami (futures), swapmi a opciami. Slovenské banky v súčasnosti kótujú forwardy na USD, DM a ATS (na 1, 2 a 3 mesiace), devízové opcie na USD a DM (pri cenách kontraktov nad 1 milión USD) a devízové swapy (medzibankové kontrakty s hodnotami okolo 3 až 5 miliónov USD). Úrokové riziko možno eliminovať použitím úrokových swapov, forwardov, futurít a opcií. Na Slovensku sa používajú úrokové swapy a forwardy (FRA).

Celková hodnota podkladových aktív finančných derivátov (ktorých trhy expandovali od polovice 80-tych rokov) dosahuje 70 miliónov USD, čo je 10-násobok hrubého národného produktu USA. Avšak v období 1993 až 1995 utrpeli niektorí účastníci trhov s derivátmi náhle obrovské straty, ktoré v štyroch prípadoch prevýšili miliardu USD. Tieto udalosti našli odozvu v návrhu na doplnenie takzvaných Bazilejských dohôd, čo viedlo k prijatiu rizikovo založených kapitálových štandardov. Podľa týchto štandardov musí mať každá banka vystavená významnej miere finančného rizika rezervný kapitál primeraný tomuto riziku. Navrhuje sa používanie tzv. interného modelu rizika, ktorý zahŕňa denný výpočet hodnoty tzv. VAR (value at risk).

VAR predstavuje odhad hodnoty, o ktorú sa môže pozícia príslušnej banky znížiť v dôsledku pohybov finančného trhu za dané obdobie s predpísanou pravdepodobnosťou. VAR je vlastne kvantilom štatistického rozdelenia možných strát na zvolenej hladine spoľahlivosti.

Úspešný manažment rizika predpokladá investície do infraštruktúry banky a jej doplnenie špecializovanými odborníkmi. Napríklad bratislavská pobočka ING Barings hľadala nedávno odborníka na VAR (so vzdelaním v matematike a ekonómii).

Banky sa však nemôžu spoliehať len na formálne aplikácie matematicko-štatistických metód. Špičkoví manažéri bánk by mali rozumieť ekonomickým dôsledkom finančného rizika a nových regulačných pravidiel.


Daniela Nováčková: Zmluvné záväzky medzi Slovenskou republikou a Európskymi spoločenstvami a ich členskými štátmi so zreteľom na zbližovanie práva

V Slovenskej republike je v súčasnosti čo v najširšom kontexte vnímaná skutočnosť, že Slovensko sa pripravuje na plnoprávne členstvo v Európskej únii. Medzinárodnoprávne záväzky a formy spolupráce medzi Slovenskou republikou a členskými štátmi Európskych spoločenstiev sú koncipované v Európskej dohode o pridružení, ktorá vstúpila do platnosti 1. 2. 1995.

Tento rozsiahly medzinárodnoprávny dokument tvorí základný právny rámec kooperačných aktivít medzi uvedenými zmluvnými subjektami a zároveň vytvára koordinovaný súbor všeobecných opatrení predvstupovej stratégie na integráciu do vnútorného trhu.

Podľa ustanovení článku O Zmluvy o Európskej únii “každý európsky štát môže požiadať o členstvo v Európskej únii. Svoju žiadosť adresuje Rade. Táto sa uznáša jednomyseľne po konzultáciách s Komisiou a po vyslovení súhlasného stanoviska Európskeho parlamentu, ktorý rozhodol absolútnou väčšinou hlasov poslancov”.

Európske spoločenstvo ako subjekt medzinárodného práva môže uzatvárať s jedným alebo s viacerými tretími krajinami alebo s medzinárodnými organizáciami dohody o pridružení, ktoré určia vzájomné práva a povinnosti spoločných programov a osobitné postupy. Uvedené ustanovenia sú definované v článku 238 Zmluvy o Európskom spoločenstve a tvoria zároveň všeobecný právny základ. Článok 238 Zmluvy o Európskom spoločenstve zakladá pre Slovenskú republiku inštitút pridruženia.

Európska dohoda o pridružení je medzinárodnou zmluvou, jej ustanovenia majú prednosť pred vnútroštátnym právom. Z hľadiska európskeho práva môžeme Európsku dohodou o pridružení považovať za pramene práva Európskej únie.

Európske dohody o pridružení sa považujú za najrozsiahlejšie dohody, ku ktorým EÚ vo svojej doterajšej histórii pristúpila. Ich význam v tomto smere podčiarkli aj závery kodanského a essenského summitu.

V súlade s ustanoveniami zakotvenými v preambule Európskej dohody o pridružení má “pridruženie” napomáhať dosiahnutie konečného cieľa, ktorým je nepochybne prijatie Slovenskej republiky za plnoprávneho člena v Európskej únii. Slovenskej republike, samozrejme, týmto nevzniká právny nárok na členstvo v Európskej únii ani po splnení záväzkov deklarovaných v Európskej dohode o pridružení a cieľov vytýčených v Bielej knihe.

Od Slovenskej republiky sa očakáva, že si sama určí priority na úspešnú integráciu do vnútorného trhu v súlade s cieľmi definovanými primárnou a sekundárnou legislatívou ES. Od napojenia na vnútorný trh sa očakáva, že posilní ekonomickú reformu a reštrukturalizáciu priemyslu a rozvoj podnikateľských aktivít.

Dôležitým návodom na zbližovanie práva je Biela kniha z roku 1995 určená krajinám strednej a východnej Európy na integráciu do vnútorného trhu, ktorá je výsledkom rokovaní v Essene v roku 1994. Bielu knihu tvoria dve časti. Prvá analyzuje cieľ, kontext, charakter a koncepciu Bielej knihy. Popisuje spôsoby odstránenia rôznych druhov prekážok voľného trhu s aktívnou súťažou. Druhá časť Bielej knihy je rozdelená do 23 sektorov vnútorného trhu a metodologickým spôsobom popisuje stratégiu implementácie komunitárneho práva do slovenského právneho poriadku a právnej kultúry.

Významným nástrojom zbližovania práva v procese európskej integrácie je Národný program prispôsobovania právneho poriadku Slovenskej republiky k právu EÚ v oblasti vnútorného trhu. Tento rozsiahly koncept právnej integrácie obsahuje základné legislatívne riešenia na odstránenie právnych prekážok a vytvorenie čiastočne kompatibilného a v niektorých prípadoch aj úplne kompatibilného právneho prostredia, kde bude zabezpečená realizácia základných štyroch slobôd vnútorného trhu definovaných v článku 7a Zmluvy o Európskom spoločenstve.


Vlasta Kunová: The Principle of Subsidiarity

A Subsidiarity principle is an important characteristic of the European Law. As a result of long-term discussions between the European Communities lawyers and politologists a definition of subsidiarity has appeared in the text of the Treaty on European Community, which due to its position on pages of the European Law’s primary authorities is the most comprehensive one.

Pursuant to the Article 3b of the Statutes of the Treaty on European Community (hereinafter referred to as ”the Treaty”), the Community shall act within the limits of the powers conferred upon it by this Treaty and of the objectives assigned to it therein. In areas, which do not fall within its exclusive competence, the Community shall take action in accordance with the principle of subsidiarity only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States and can therefore, by reasons of the scale or effects of the proposed action, be better achieved by the Community. Any action by the Community shall not go beyond what is necessary to achieve objectives of this Treaty.

In this context the subsidiarity principle may be understood as an effective tool of pushing through the Community Law in Member States. Subsidiarity of the law’s application begins just where a standard of competence ends.

Aiming at a correct interpretation and understanding of a matter-of-fact nature of the subsidiarity principle, it is possible to apply Statutes of the Article 100 of the Treaty on European Community, which stated as follows: “As a result of the Commission’s suggestion and the European Parliament and the Economic and Social Committee’s consultation, the Council unanimously issues guidelines aiming at approximation of those acts and other Member States´ appointments, which have a direct impact on establishing or functioning of the Common Market”.

This is a reason why under the present situation it is necessary to understand the subsidiarity principle as a means of Commission, that has to search for and to find the most adequate tools for its application. As to the Commission, there is always a tendency to apply the legal regulations of EU towards a deeper integration, which causes that by means of subsidiarity application of law the European Union leads the Member States to closer approximation of their opinions and standpoints.

Exercise of the Article 3b of the Treaty on European Community is declared in the Common Conception for the Subsidiarity Principle Application dated on 12 December, 1992.

The European Union is based on the subsidiarity principle, as it is stated in the Articles A and B of the Treaty on European Union. The principle facilitates to keep the identity of the individual Member States as well as their competencies. This enables decisions accepted within the framework of the European Union would be - regarding the citizens - as close as possible.

The subsidiarity principle does not effect the European Community´s competencies given to it on the basis of the Treaty in line with the Court of Justice interpretation and cannot even infirm these competencies. This is an instruction how these competencies should be exercised upon the level of the Community, particularly when executing the Article 235 of the Treaty. This principle must be exercised in accordance with general articles of the Maastricht Treaty, whereas neither a prior position of Community Law must be jeopardized, nor a principle stated in the Article F Section 3 of the Treaty on European Union must be infirmed. This is secured by the fact, that the Union disposes of means necessary for attaining its objectives and execution of its policies.

Subsidiarity is a dynamic principle which should be applied with consideration to acquiring objectives of the Treaty. It enables an expansion of the scope of the Community activities, if it is necessary because of circumstances, and vice-versa a limitation or prohibition of activity, if this is not considered justifiable.

If - upon the basis of the subsidiarity principle - the Community´s activity is out of question, then the Member States in their decisions are obliged to follow general statutes of the Article 5 of “the Treaty” which comprises all the measures adequate in their nature for performance of duties resulting from the Treaty; an application of all those measures which might jeopardize fulfillment of the objectives are not allowed.

The subsidiarity principle cannot be perceived as being directly effective, however the Court of Justice takes care of interpretation of this principle and supervises its observance by Community´s institutions in areas falling within the Treaty establishing the European Communities.