Page 17 - Central & Southeast Outlook 2020

in 2019 and to fluctuate around 6% in 2020 and 2021. After strengthening in 2019 due to a tight labour market and strong salary increases in the public sector, salary growth is expected to ease slightly in 2020 and 2021.
Policy uncertainty regarding trade and a further slowdown in export markets, particularly in Germany, remain the main negative risks to Slovakia’s exports and investment, which are therefore very likely to be held back. Exports are expected to grow gradually, most likely by 4.5% in 2021. Slovakia's trade balance should also gradually recover in 2020 and 2021, depending on the prospects in Slovakia’s key trading partners, and any developments affecting the automotive industry.
2.0​ ​Politics
2.1 ​Politics - Czech Republic
In 2020, the Czech political environment will be challenged by the reopened fraud investigation into Prime Minister Andrej Babis​in the Stork's Nest case as well as the European Commission audit into conflicts of interest related to Babis’ conglomerate Agrofert. The Czech Republic will have to submit its comments and response to the draft audit report of the Commission in cooperation with all ministries concerned in the first two months of 2020.
Justice reform remains a contentious issue in the Czech Republic. In 2019 Marie Benesova’s appointment to the minister of justice post sparked the largest protests in the Czech Republic since 1989. There are claims Benesova is biased in Babis’ favour and will obstruct an independent investigation into the Stork’s Nest case. Also her attempts to reform the justice system are likely to be perceived as politically biased.
Within the reform of the justice system, the Ministry of Justice has submitted a draft law on disciplinary proceedings concerning judges, prosecutors and executors. Benesova plans changes to the procedure and advocates a different composition of the Disciplinary Chambers.
Also in 2020, the Czech parliament will discuss the 7% digital tax for international companies, such as Google, Facebook, Apple and Amazon, approved by the Czech government in November 2019. If approved by the parliament, the tax is likely to threaten Czech-US relations.
17​ CESE Outlook 2020​ ​ ​www.intellinews.com