BUSINESSWEEK ONLINE: MAY 17, 1999 ISSUE

International -- Spotlight

An Ethnic Minority Breathes Easier...As Politicians Try to Clean Up a Mess (int'l edition)

On the first Saturday in every month, Eniko Horvathy boards a ferry at the sleepy south Slovak river port of Sturovo for the half-hour trip across to Hungary. ''My sister lives in Esztergom,'' the 75-year-old grandmother grumbles. ''I've had to take this bloody ferry to see her for the last 55 years. I used to be able to walk across.''

Once upon a time, Sturovo and Esztergom were bustling trade partners linked by a handsome suspension bridge. Retreating Germans destroyed it at the end of World War II, and all that remains are a few rusting stumps of iron. But soon, Horvathy may be able to stroll across again. The Hungarian and Slovak governments plan to start rebuilding the bridge this summer--for reasons having to do with trade and geopolitics, but also to damp down the kind of ethnic tensions now tearing apart the Balkans.

Like 560,000 other inhabitants of the Danube's north bank--95% of the people there--Horvathy is an ethnic Hungarian. And for 1,000 years, until the collapse of the Austro-Hungarian empire and the formation of the Czechoslovak state in 1918, Hungary ruled most of present-day Slovakia. ''They did their best to 'Magyarize' us,'' recalls Fergus Serko, a Slovak journalist. ''They banned us from talking Slovak, they suppressed our literature. We haven't forgotten about this.''

With the fall of the Iron Curtain and Slovakia's split from Czechoslovakia in 1993, then Slovak Prime Minister Vladimir Meciar started getting his own back. A law making Slovak the state's only official language banned other locals from speaking their mother tongue in their day-to-day affairs. In disgust, both NATO and the European Union passed over Slovakia for fast-track membership.

But since an anti-Meciar coalition won power in general elections six months ago, Bratislava has been shifting course. Bilingual signs have reappeared in the streets of Sturovo, and the language law may soon be rescinded. The government plans to transfer nursery schools and basic schools to municipal control, while Hungarian universities are even planning to open branches here. In part, the rapprochement is designed to keep the fragile coalition's Hungarian parties happy. But the new regime admits it was also prompted by hard-nosed commercial considerations. ''The protection of ethnic minority languages is a prerequisite for entry into the EU,'' concedes Prime Minister Mikulas Dzurinda. ''And by God, we want to enter the EU.''

He has a good chance. Talks about admitting Slovakia at the same time as its Czech, Polish, and Hungarian neighbors--probably within 10 years--have begun. And with a spanking new bridge in place, the odds are that investment would flow into the North Bank, which shares a common language with its neighbor but gets 40% lower wages. ''There'll be more businesses like us coming in, and hooray for that,'' says Rick Wiley, chief financial officer of U.S. luggage manufacturer Samsonite Corp., which 18 months ago set up a plant in the town of Samorin to complement its main operation in Hungary. So the bridge, which points south, may prove to be a bridge to the West.


It wasn't just ethnic Magyars who breathed a sigh of relief when Meciar was finally voted out of office last September. For most of the 1990s, he headed an unlikely alliance of far-right nationalists, unrepentant communists, and unprincipled pragmatists. Police are currently investigating Meciar aides, who allegedly planted explosives at opposition party meetings, kidnapped the son of former President Michal Kovac, and sold off state-owned industry to their cronies at knock-down prices.

The trouble is, pessimists point out, the current coalition--which comprises Christian Democrats, Hungarian parties, and even the legal successor to the Communist Party--seems just as artificial as its predecessor. And with austerity measures such as a recently imposed a public-sector wage freeze starting to bite, there's danger that Slovaks could get nostalgic for Meciar's era of false prosperity, fueled by reckless borrowing.

So far, though, support for Dzurinda remains firm. Meciar is running for President next month, but opinion polls suggest he won't win. Even so, he could open a lot of old wounds trying. If he does, then early parliamentary elections could be on the horizon.

By James Drake in Sturovo



MAP: Slovakia and Hungary






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An Ethnic Minority Breathes Easier...As Politicians Try to Clean Up a Mess (int'l edition)

MAP: Slovakia and Hungary

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