Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Slovak Credit Pioneer to Curb Slovak Premier’s Dominance

Businessman Andrej Kiska
Businessman Andrej Kiska speaks during a meeting to his supporters prior to Slovakia's presidential election, on Monday, March 10, in Bratislava. Photographer: Samuel Kubani/AFP via Getty Images

March 31 (Bloomberg) -- Andrej Kiska, a Slovak businessman-turned-philanthropist who foiled Prime Minister Robert Fico’s bid to be president, adds a new independent voice to balance the premier’s political ambitions.

Kiska clinched 59.4 percent of votes in a March 29 runoff to become the country’s fourth president since it was founded in 1993, compared with Fico’s 40.6 percent, the Slovak Statistics Office said yesterday. Fico remains the premier and will still be instrumental in setting the country’s policies because his Smer party has a majority in parliament.

Fico, who is halfway into his second term as premier, sought to extend his lock on power by becoming the president and hand-picking his successor to lead the cabinet. Voters disappointed by Fico’s unfulfilled pledges to tackle corruption and boost job creation punished him at the ballot box even as investors reward his economic policies with record-low yields.

“Kiska succeeded in rallying the anti-Fico group of voters, which usually divides its loyalties among a wide array of center-right parties,” Otilia Dhand, an analyst at political risk evaluator Teneo Intelligence, said by phone. “He has positioned himself as a future counterweight to the government and will likely become its vocal critic.”

Smer has a majority of 83 seats in the 150-member Slovak parliament and can push through most legislation without opposition support.

Mopping Floors

Kiska, 51, went from mopping floors in Delanco, New Jersey, shortly after the fall of communism in 1989 to founding Slovakia’s biggest consumer-loan business in mid-1990s.

He co-founded two consumer-credit companies, which he sold to the Slovak unit of Intesa Sanpaolo SpA in 2005. He collected about 10 million euros ($13.8 million) for his stake.

Since then, he’s focused on philanthropy, having donated at least 2.5 million euros to the nation’s largest charity, Good Angel, which he founded.

“The president should be a counterweight to the government,” Kiska told TA3 news television channel in an interview yesterday. “I will always defend the interests of those who elected me to the post, that means the interests of citizens,” he said, adding he doesn’t want to “incite conflicts.”

Still, he will probably have “only limited policy influence, given the relatively weak position of the president in the Slovak political system,” Dhand said.

Kiska will take over the presidency from Ivan Gasparovic on June 15.

Protecting Slovaks

Fico’s campaign around the country of 5.4 million centered on his promotion of the government’s achievements in protecting Slovaks from the impact of the global economic crisis.

His cabinet introduced special levies for selected industries and raised income taxes for corporations and the country’s highest earners to raise revenue, in line with pledges not to let poorer citizens feel the impact of fiscal consolidation.

The yield on the benchmark bond due 2023 rose 3 basis points, or 0.03 percentage point, to 2.19 percent today, after falling to a record low on March 28. The country’s borrowing costs are below those of similar maturity in higher-rated Belgium, according to generic data compiled by Bloomberg.

While investors have rewarded Fico’s administration for succeeding in cutting the budget deficit, Slovaks have remained unimpressed and opted to vote for the political rookie instead, analysts said.

Wrong Direction

As many as 63 percent of Slovaks, including two-fifths of Smer voters, said the country is heading in the wrong direction, according to a poll by the Institute for Public Affairs conducted Nov. 5-13 among 1,049 people.

Three-quarters said the chances of finding a job worsened after Fico’s second cabinet took power, while almost two-thirds see corruption as a bigger problem than during the 2010-2012 rule of Prime Minister Iveta Radicova.

Fico’s Smer party would win general elections with 42 percent if the ballot had been held last month, according to an opinion poll by Bratislava-based Median SK company, conducted among 1,094 people between Feb. 2 and March 2 and published today. Median didn’t give the margin of error for its survey.

The presidential election result weakens the position of Fico and his party as the dominant force in the euro-member country’s politics, according to Grigorij Meseznikov, the head of the Institute for Public Affairs.

In the runoff, Fico got 893,841 votes. In 2012 general elections, Smer received 1.134 million votes, or 44.4 percent of cast ballots. When Fico conceded his defeat on March 29, he said he will take a few days to analyze the election result.

“For Fico’s Smer, this could be the beginning of its end,” Meseznikov said by phone. “It will surely score much less in the 2016 general elections.”

To contact the reporters on this story: Peter Laca in Prague at placa@bloomberg.net; Radoslav Tomek in Bratislava, Slovakia at rtomek@bloomberg.net

To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net; James M. Gomez at jagomez@bloomberg.net Andrea Dudik, James M. Gomez

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.