A EUROPEAN SUCCESS STORY

National Day receptions are annual events in diplomatic life, but this year's celebration by the embassy of Slovakia was an unprecedented triple header. The event simultaneously marked Slovakia's marriage to, and subsequent peaceful divorce from the Czech Republic – the centennial of the birth of Czechoslovakia in 1918, and the 25th anniversary of Slovakia's independence following the separation of the two nations in 1993. In addition, both Slovakia and the Czech Republic remembered the 50th anniversary of the Prague Spring, the Czechoslovak communist party's bid to introduce democracy blocked by the Soviet Union. U.S. Congressman Rod Blum (R-Iowa), and U.S. Congressman Peter Visclosky (D-Indiana), joint-chairs of the CongreFssional Slovak Caucus, were among the guests at the well attended reception at which Ambassador Peter Kmec spoke of his country's "transition" from Soviet satellite to liberal democracy and "integration" into the European Union and NATO. Ambassador Kmec has something to brag about: Slovakia (population: 5 million) is one of the success stories of the European Union, with a growth rate above three percent. Alone among the four members of the Visegrad 4, the regional grouping which also includes Poland, Hungary, and the Czech Republic, Slovakia switched to the euro shortly after joining the European Union; but thanks to sound economic reforms (including the introduction of the flat tax) the Slovaks managed to escape the worst effects of the 2008 fiscal crisis. As an EU member, Slovakia has proved less combative than the other three Visegrad countries in its dealings with Brussels. It has even detached itself from the quartet's united front against EU-imposed refugee quotas and -- according to an exclusive Diplomatic Connections interview with Ambassador Kmec -- has reached a compromise to admit an acceptable number of Syrians and other immigrants. Bratislava's other challenge is managing its relationship with an increasingly aggressive Russia, following Moscow's incursion into Ukraine, Slovakia's neighbor. Slovakia has taken steps to diversify its gas supplies to avoid a repetition of the energy crisis in the winter of 2009, when Russia cut off its supplies of natural gas to Europe. Slovakia's other objective, Ambassador Kmec said, is to reduce its dependence on Russia for weapons supplies that dates back to the Cold War. The ambassador also indicated that once Brexit was dealt with the EU would turn its attention to the discussion of its future, including plans for a more robust European military mechanism reflecting the growing conviction that in these uncertain times, Europe needed to be self-reliant in its own defense and security.

Diplomatic Connections: I'd like to start by asking you to talk about the current state of U.S.-Slovak relations…

Ambassador Kmec: The modern phase of Slovak-American relations started on January 1, 1993, so 25 years of bilateral relations, and we are preparing a series of celebrations, kicking off with our National Day reception at the Library of Congress.

Diplomatic Connections: As is the U.S. Embassy in Bratislava

Ambassador Kmec: Yes, and we actually have joint celebrations with the Czech Republic to mark the centennial of Czechoslovak relations with the United States. So actually, there are two celebrations -- with Slovakia since becoming an independent entity, and as part of Czechoslovakia. Relations have been very intense since Slovakia's independence. Slovakia went through a transformation from a totalitarian regime to a democracy, and the United States played a very critical role in this transformation. Then there was an integration period during which Slovakia joined the European Union and NATO in 2004. The U.S. played a critical role in both. There are a number of success stories in this cooperation, including robust U.S. investment in the Slovak economy. Now the ties are really close – political, economic, cultural, but also people-to-people.

Diplomatic Connections: What is the size of bilateral trade?

Ambassador Kmec: We are net exporters, because of our very strong industrial base, Slovakia being the largest per capita producer of automobiles in the world. We export a huge amount of cars and machinery, and one of the primary destinations is the U.S. market.

Diplomatic Connections: What are the current totals of this bilateral trade?

Ambassador Kmec: The Slovak economy, of course, can't compete in size with that of Germany or France, so we are speaking in billions of U.S. dollars rather than tens or hundreds of billions. The U.S. is in the top ten of Slovakia's trading partners.

Diplomatic Connections: You personally have served in Washington once before as deputy chief of mission between 2003 and 2005. Do you find that Washington has changed from your earlier posting?

Ambassador Kmec: Every country changes, but my agenda has also changed from my first stay. When I served as DCM, my agenda was the integration of Slovakia into NATO. So my mission was to work with the U.S. Senate on the ratification [of Slovakia's entry] and we achieved a very good result: a hundred percent of the senators present voted in favor of admitting Slovakia to NATO. We really fulfilled our criteria, and Slovakia became a full-fledged member. For me it was a mission accomplished – a big success story in my personal career. As ambassador, of course, my agenda is much broader. The bilateral agenda is our main concentration, however, through different dimensions. Mostly, the focus is on continuing to make progress in trade and economic development. Our goal is to establish an institution-based cooperation; thus, we've been working on the creation of a business council which was set up last year. To this extent, we have a number of companies helping us to promote a trade and innovation agenda here in the United Sates. But also we encourage Slovak companies to be more active in the U.S. Market; subsequently, several success stories can now be told and hopefully, there will be many more to come.

Diplomatic Connections: Is that difficult?

Ambassador Kmec: It is difficult because of the distance. Slovak companies try to compete on the European market because it's much easier.

Diplomatic Connections: Presumably, Slovakia's number one trading partner is the European Union, is that not so?

Ambassador Kmec: It is. Eighty percent of our exports go to the European market, but we're trying to encourage the Slovak small and medium sized businesses to enter the U.S. market because it's a very well integrated market – highly competitive, but most rewarding.

Diplomatic Connections: How big is the Slovak diaspora in the United States with which you have to stay in contact?

Ambassador Kmec: All round the world we count something like two million people with Slovak roots. Given the five million population of our country, it's a vast emigration, and most of it has been directed to the United States. We used to have around one million Slovaks in the U.S. but the numbers diminished through assimilation of earlier generations into American society. Currently, there are approximately 400,000 to 500,000 Slovaks in the U.S. The current emigration has been much lower than in the 20th century because of the economic improvement. Slovakia offers more opportunities than it did a hundred years ago, so the emigration dropped. But still we rely a great deal on the Slovak diaspora here, both the "historical" immigration, and the modern immigrants who (are employed) mainly in innovation, research, start-ups – remarkably advanced companies in the U.S. market. We don't necessarily speak about brain gain and brain drain. But brain circulation – Slovaks using the know-how from the U.S. They don't necessarily have to move physically back to Slovakia, but their help is enormous.

Diplomatic Connections: When I said change, I was also thinking of the change in the city itself in the seven years since your last assignment.

Ambassador Kmec: That's the second part of my assessment of being in the U.S. ten years ago and now: The United States has undergone enormous changes as a result of globalization. The structure of the U.S. economy has changed: added-value jobs have increased, you lost a number of manufacturing jobs through globalization, and this is the reason for a number of challenges in the society; but most of the developed countries have faced this dilemma, how to keep the manufacturing jobs, while bringing more added-value jobs to increase earnings and make people better off. This is the challenge that the U.S. and the Western European economies have been dealing with, of course. And D.C. has changed enormously: it's a booming capital, with a lot of new neighborhoods. The quality of life improved considerably, the crime rate has gone down, which is also due to the new jobs created in the Washington metro area. I am very impressed by the development since my previous posting.

Diplomatic Connections: Slovakia is a member of the Visegrad 4, and one of the remarkable stories of the 20th century is the transformation of yourselves, the Poles, the Hungarians, and the Czechs from Soviet satellites to liberal democracies in a very short time, helped by the United States, and by European encouragement, setting up a structure to help develop your institutions. But it also required a certain amount of internal will. Where did this determination – four nations, but of course let's focus on Slovakia – suddenly knowing where they wanted to go originate? Especially in the case of Slovakia, which is one of the good news stories of the European Union, avoiding the financial crisis (of 2008), sustaining a growth rate of 3.5 percent, and doing pretty well. How does a nation find the will to do this?

Ambassador Kmec: Slovakia is a success story due to several developments, and I would combine three main components in the 1990s and (early) 2000s: One is globalization, second is transformation, and the third is integration. All these three combined actually brought huge opportunities for Slovakia. Your question is how we dealt with and embraced those processes. Transformation and integration have been real success stories and now we're trying to cope with globalization.

Diplomatic Connections: Yes, but one question is why they were successful?

Ambassador Kmec: One of the reasons is that we were lucky to have really enlightened leaders who understood the challenges of those times. The government of Mikulas Dzurinda, which was in power in 1998, understood those challenges. We had to catch up with our neighbors, because we had a difficult time embracing liberal democratic governance and the period between 1994-1998 had been very demanding from this perspective. And that motivated the public: when they saw that our neighbors had been integrated much faster than Slovakia was, they revolted against the government, and in 1998 brought to power reform forces. So the period between 1998 and 2006 was a time of significant change. Slovakia introduced economic reforms, including the flat tax – that was the very first reform of its kind in Europe. This attracted a lot of investors, in spite of the fact that our neighbors had been much more popular destinations.

Diplomatic Connections: Add the fact that Slovakia was the only one of the Visegrad countries that converted to the euro.

Ambassador Kmec: Yes. As soon as we joined in 2004, the political consensus in Slovakia was to deepen integration as much as possible, so in 2007 Slovakia joined the Schengen zone, and in 2009 the euro zone.

Diplomatic Connections: On the other hand, there is still Russia sitting nearby. At this point, what is Slovakia's relationship with Russia?

Ambassador Kmec: Since the break, we have been trying to play a positive role to integrate a new Russia into the European, transatlantic and global cooperation. There have been ups and downs, both in internal developments in Russia and in our relationship. The occupation of Crimea and the Western Ukraine doesn't really contribute to improving ties, and we have been holding back in our cooperation. So we have to sort out this relationship. Russia has to observe the basic rules, inviolability of borders, respecting sovereignty, and also the choice of different countries to cooperate with different players, such as the European Union and NATO. We have to emphasize these principles, because that's what played in our favor.

Diplomatic Connections: There are various ongoing challenges in the context of Slovakia's relations with Russia. One is energy dependence. The other is dependence on weapons supplies from Russia. So you have to deal with these on a continuous basis. The other is the issue of EU sanctions. There was a time when Slovakia and some other member states were advising the EU not to be too tough on the Russians because of the Russians could retaliate. Is that correct?

Ambassador Kmec: Regarding energy security, Slovakia has made a lot of progress in terms of becoming independent from exclusively Russian imports of gas. In the famous gas crisis of 2009 [when Moscow shut off gas supplies to western countries], Slovakia was one of the most exposed countries: gas deliveries from Russia through the pipeline from Ukraine were stopped for two weeks, the Slovak economy suffered, as did other countries. Since that time Slovakia has made efforts to diversify deliveries of imported gas, and now we are connected to the southern pipeline via Hungary, and through the western network via Austria, and we are building a connector with Poland, to become connected with the Polish energy terminal. Diversification has been implemented when it comes to supply routes. Currently there is a lot of discussion about LNG (Liquid Natural Gas) deliveries from the United States: that could be a game changer in terms of diversification of sources. The LNG terminal in Poland has been functioning as well as an LNG terminal in Croatia is being discussed. So there will be much more security when it comes to energy distribution. Concerning the subject of military, we have already made some progress in terms of modernization and phasing out the old Soviet military equipment. In recent years we have signed an agreement with the United States to buy Blackhawk helicopters to phase out the (Russian) helicopters. Slovakia has already reached 20 percent of military expenditure in terms of modernization expenditure.

Diplomatic Connections: And the EU sanctions?

Ambassador Kmec: Sanctions were introduced following Russia's aggression into the Ukraine. Before the first phase there was a heated discussion both on the domestic political level and on the EU and NATO level about how not to harm our individual trade with Russia. We had some concerns about modeling the sanctions to put pressure on Russia to comply with some principles -- without punishing our businesses. In the end the compliance with principles prevailed over domestic economic interests and Slovakia has supported the sanctions since they were introduced. We try to appeal (to the EU) to review the sanctions every period to determine their efficiency in pressuring Russia to comply, but our position is that sanctions should stay in place.

Diplomatic Connections: What would you hope the sanctions will achieve regarding Ukraine?

Ambassador Kmec: The sanctions mechanism is aimed at persuading Russia to sit at the table and discuss cooperation both with Ukraine and with the European Community. So far we have been taking very small steps towards the resolution of the conflict, so there's a long way to go.

Diplomatic Connections: What are Slovakia's relations with the Ukraine?

Ambassador Kmec: Ukraine is our neighbor so we understand that the better our relations are the more it helps Ukraine to integrate closely with the European and transatlantic structures. So we try to help Ukraine both in integration and also in bilateral cooperation. We are trying to share stories of success from our transformation process; furthermore, former prime minister Dzurinda and the former minister of finance Miklos have been advising the current government for several years.

Diplomatic Connections: Do Slovaks feel nervous about their proximity to Ukraine, or do their ties to Western Europe give them sufficient reassurance?

Ambassador Kmec: We feel that being part of the European Union and NATO makes us more secure and lowers the concerns of Slovakia about what is going on in Ukraine, but we should be very cautious. Continuous dialogue and engagement with Russia can bring some positive results in the long term. So far, we have maintained good bilateral relations with Russia.

Diplomatic Connections: In your view, the Ukraine hasn't reached the stage in its transition that it can actually join the EU, has it?

Ambassador Kmec: Currently we don't speak about the date of accession [into the European Union] for Ukraine; it's a gradual process. It will take longer than was the case of the Central Europeans when there were a number of factors that played into fast integration; but the most important thing is the political commitment of Ukraine to be integrated into Western and transatlantic structures.

Diplomatic Connections: If there were a referendum in Slovakia tomorrow on staying in the European Union, would the pro-EU side win?

Ambassador Kmec: I'm confident that there would be a "yes" vote. Seventy plus percent of the Slovak population fully supports our membership of the European Union. It's been challenged by different factors – radical forces and anti-EU propaganda mostly emanating from the east – but so far Slovak membership in the EU has been a success story, so the population fully supports it.

Diplomatic Connections: There will be no Slovak Brexit…

Ambassador Kmec: No Slexit so far…

Diplomatic Connections: There are differences of approach within Visegrad towards Brussels, ranging from the Hungarian position, to the Polish position, and the Czech approach, and then Slovakia. The one issue in which you are united is refugees. All four Visegrad members reject the EU quota system. So, in fact, does Visegrad count for much?

Ambassador Kmec: It depends how you weigh the influence. For us, Visegrad is a kind of coordination mechanism of four countries on different topics. It used to be a much more important political tool when we were in transition. As soon as we joined NATO and the EU there was a period of soul-searching for Visegrad. On specific topics in the EU and sometimes on the NATO agenda we try to seek joint positions, and it has played well; therefore, coordination meetings are held before each European Council. It has made a substantial impact for us in promoting our interests in multiple forums and in European structures. So, we decided to keep the Visegrad and it is regarded as a very important regional instrument.

Diplomatic Connections: As a group, Visegrad reject the EU refugee quota system whereby Brussels allots a certain number of refugees to each member state. Is that correct?

Ambassador Kmec: The quota system as a mechanism has been very controversial; all four Visegrad countries have raised their concerns. Some of them decided to challenge it in the European Court. Slovakia since its more radical position at the very beginning totally rejecting the quotas has come into some kind of understanding, discussing this very complicated issue with Brussels and the European structures on a combination of providing the financial assistance and accepting a certain number of immigrants while working on the protection of external borders. We see it as a package solution so, yes, we have moved our position.

Diplomatic Connections: And the numbers we are talking about?

Ambassador Kmec: No member state is meeting the required numbers. It's very difficult to judge where we stand. Nevertheless, we have started receiving some immigrants from Syria as well as immigrants that come from Eastern Europe [Ukraine and further east]. So there is a continuous dialogue.

Diplomatic Connections: In other words Slovakia is now accepting a certain number of Syrians, in addition to some from countries outside the EU. Is that the situation?

Ambassador Kmec: Yes, we are now discussing with the European Union the model – how to meet certain numbers. Each country has its own immigration rules and requirements, and very often those immigrants are without documents; thus, there is an ongoing vetting process. So I can't tell you exact numbers that we have received in relation to those we have committed to receive.

Diplomatic Connections: That is a different position from the Czechs, to say nothing of the Hungarians.

Ambassador Kmec: It's not a complete change because we have been challenging the quota distribution. Our immigration policy hasn't changed when it comes to helping asylum seekers and providing humanitarian assistance.

Diplomatic Connections: For Slovakia, what would be the ideal post-Brexit development in the European Union?

Ambassador Kmec: It's difficult to envision a two-speed Europe [in which member countries follow two European integration agendas] because it can discourage a number of countries from being integrated deeper. We want to deepen the integration in order to make the EU more competitive in the global arena, but it's a very sensitive process. Everyone has been waiting for the German-French suggestions, so we need the German government to be in place, so that their recommendations can be discussed among the 28. Of course, Slovakia would like to remain in the core of integration, and we will be part of the conversation. Our aim is to make the EU competitive and much more efficient. And, our objective in external affairs is to play an important role in world decision making, but also to make the domestic processes much more productive. So we have to find the proper balance between the national competencies and the EU competencies.

Diplomatic Connections: What about a full scale eurozone fiscal policy and a common budget?

Ambassador Kmec: They are certainly subjects for discussion. The EU does not collect taxes. So a very important part of the conversation would be whether the EU should collect taxes. If the EU wants to have teeth it has to have money, so we need to discuss these fiscal and budgetary issues, as part of the bigger picture.

Diplomatic Connections: And speaking of teeth, what about the defense dimension of the EU?

Ambassador Kmec: There is a very positive prospect in moving this agenda forward. The Europeans have been discussing how to enhance their military capabilities within the EU, as part of the transatlantic military capabilities. In the future we'll see more European independence in decision making.

Diplomatic Connections: Independent of the transatlantic link?

Ambassador Kmec: Yes.

Diplomatic Connections: Is this something the Europeans want, or something they think is inevitable?

Ambassador Kmec: The overwhelming dominance in terms of a fiscal contribution by the United States needs to be balanced. As soon as we put in more financial resources there will be an increasing amount of independent decision making: so it comes hand-in-hand, Europe contributing more into defense capabilities, but also being more independent in decision making.

Diplomatic Connections: Thank you, Ambassador Kmec. This has been a very insightful interview into your great nation of Slovakia. May I take this moment to personally extend my congratulations on the 25th anniversary of Slovakia's independence.