This month, Slovak economy unpleasantly surprised the Slovak government, when the newly released economic numbers showed a relatively significant drop in the growth rate of the economy compared with the earlier expectations.
Compared with the government expected rate of growth at the level of 3.7 %, the actual numbers came in at 1.9 %. This shows an unexpected drop and puts Slovak politics into reality with the hints of the recession coming from Germany and China.
Besides the political and economic consequences that this may cause in Slovakia with the coming parliamentary election, the European context can be even more crucial.
Given that the main motor of the European economy and the main export partner of Slovakia is entering (or has, in fact, already officially entered) recession, the newly formed European Commission will be faced with a mounting pressure to prove it can set the agenda right for the European economy under the difficult circumstances.
The capacity to deliver an efficient approach to the crisis will define the fate of the European integration and may give the populists a fuel to build up the anti-European sentiments.
The task is, of course, hardly an easy one, given that the economy naturally goes in cycles.
However, we are facing a potential burst in the bubble economy compound with technological transformations, which will dictate the need to choose the right way out of the conundrum.
What may prevent the Commission from adopting the right way is the expectation with which it was brought in and many goals it has set for itself.
An example of this is the vision of the European minimum wage or the gender quotas for company boards, announced by the new president of the Commission, Ursula von der Leyen.
It may be very soon that the European Commission will need to sober up from these social goals and realize that the challenges facing it has become much more economic and may see much of the EU face the recession or a full-blown crisis. The challenges will be much more concrete – reform of the education systems, completion of the infrastructure – both physical and digital, – and the deregulation of the business sector across the EU.
A large coalition needed to approve the agenda that includes a left-wing and progressive voices in Europe means that the economic programme of the Commission may have to avoid the necessary steps that the EU can take to make the crisis as short as possible.
This situation may result in a political triumph of the anti-European populists across Europe and potential further disruption of the European project along the lines of Brexit. If the European leaders want to avoid this, they need to take the early signs seriously and fight the attempts to reflate the bubble and postpone the reforms.
Otherwise, they will pay a larger price than they are willing to.