It's perfectly understandable that Ivan Miklos, Slovakia's finance minister, greets visitors with a confident smile on his face. Never mind the 15.6 percent unemployment rate in this mountainous country of 5.4 million people, the budget deficit running at 4.6 percent of the economy's output, or the daily pillorying of the government in Slovakia's rambunctious press.
On Jan. 1, the government enacted Miklos's radical fiscal package, making Slovakia the largest country in Europe to adopt a flat tax on income, corporate profits and retail sales, in this case, 19 percent across the board.
Last year, similar market-oriented changes were introduced in the health care, pension and education systems, as Miklos and the center-right coalition government of Prime Minister Mikulas Dzurinda try to turn Slovakia from one of the poorest of the European Union's new members into a Central European tiger.
Miklos's reform package goes beyond the Union's demands for new members. In fact, he said he had struggled to get it approved before Slovakia joined the Union on May 1, fearing that some of his proposals would be too radical to pass once the country was an EU member.
The retirement age was raised to 62 from 58 for women with children and from 60 for men, private contributions are now a required part of the state pension plans, hospital funding has been overhauled and much authority on school spending has been turned over to towns and regions. Local authorities have also begun assessing and collecting taxes for their own budgets.
"We want to make Slovakia business friendly," Miklos said, plunging into the details of his policies and predicting that Slovakia could set an example for the rest of Europe.
"If we continue these reforms," he added, "growth will be so high and job creation so strong that we can repeat the example of Ireland."
Miklos added, "Slovakia will be saturated with foreign investment."
He may be right. Already, the French carmaker PSA Peugeot-Citroën has confirmed that it will build a plant costing €700 million, or $899 million, to make about 300,000 automobiles a year in Trnava, northeast of Bratislava. Volkswagen, which 10 years ago bought a car factory near Bratislava, is the country's largest private employer. Other major investors include U.S. Steel, Whirlpool and MOL, the Hungarian oil and gas company. Hyundai has just put Slovakia on the short list for a car plant it wants to locate in Central Europe.
Slovakia's economy is expected to grow at close to 5 percent for the next several years, but the Economist Intelligence Unit estimates that it could take 38 years or more before the average income in Slovakia catches up with the average income across the current 15 members of the European Union.
This situation, Miklos argues, is why Slovakia needs his brand of shock therapy after four years of a politically fractured government following six years of stagnation when the country was under the sway of the leftist-nationalist prime minister, Vladimir Meciar. His authoritarian policies, crony capitalism and free spending ways left Slovakia an impoverished outcast, waiting years to be invited to join NATO (in 2002) and the EU (in 1999).
"The train was going ahead without Slovakia — so when we came to power in 1998, the job was to get Slovakia back on track," said Jan Figel, a member of Parliament from the government coalition and the man who negotiated Slovakia's entry into the Union.
Dzurinda's first four-year term was wasted in political squabbling, but since his coalition won re-election in 2002, it has passed more than 150 key reform laws.
The World Bank has given Miklos's policies its approval and has financed programs to help train Slovak bureaucrats to carry out the changes.
But getting back on track has not been painless. Average incomes in Slovakia today are about €250 per month, and while near the capital Bratislava incomes are about 90 percent of the EU average, they are a third of that in the impoverished east of the country near the Ukrainian border. Struggling Slovaks blame Miklos and his fellow ministers.
"They have no idea how we have to live," said Andrea Csibova, a single mother who says she drives a taxi seven days a week to support her 13-year-old daughter.
The government's recipe for bringing Slovakia up to EU standards, Csibova said, will just increase the pain.
That's also how Robert Fico sees things. Fico, a 39-year-old lawyer, leads Slovakia's strongest party, the center-left Smer (the name means "direction"), which came from nowhere to take 13.46 percent of the vote in last year's parliamentary elections. He said the country was in for a "post-entry shock."
Fico calls himself a "Euro-realist," not a "Euro-optimist." He backed Slovakia's bid to join the Union but said that the government had given away too much for membership and that he wanted early elections.
"The question is how can someone survive on €250 a month," Fico said. "You know what you can buy for €250 in Brussels? It's a good dinner."
Flat taxes and the abolition of the inheritance tax in particular bother Fico. Slovaks, he said, have an inborn egalitarian streak. "If this type of policy continues," Fico said, "there will be a very narrow group of rich people and 85 percent of the people will have difficulty surviving."
Experts wonder if the country can pull it off. "The question mark is the implementation of the reforms," said Ingrid Brockova, resident director in Slovakia for the World Bank, "and the ability of the line ministries to carry them out."
The World Bank has made two major loan packages to Slovakia, including one just to train officials and bureaucrats during the transition to EU membership. But Brockova also fears that the government may be alienating voters.
"The government does think about the most vulnerable part of society," she said, "but the government doesn't do much to explain what the reforms are about for the ordinary citizen and why they have to be done."
Dzurinda's coalition won power promising to take Slovakia into Europe and make it rich. But it has not prepared its citizens for the inevitable pain of transition, and winning that support will not be easy. The chaos of the Meciar era left many Slovaks disillusioned with politics and politicians.
"Political memory in Slovakia is very short, so there is no pressure from society to solve these problems," said Grigorij Meseznikov, president of the Institute for Public Affairs, a Slovak policy group.
Disappointment with the government is rising, said Olga Gyarfasova, a sociologist. "The economic impact is one pillar of the disappointment," she said. "The other is the domestic political situation."
Polls show that Slovaks are confused. While about two-thirds expect life to improve after joining the European Union, as many as 80 percent still feel that the country is headed in the wrong direction.
Slovak labor unions are petitioning for a referendum to force parliamentary elections in the late spring, when Slovaks will also vote for president. The incumbent, Rudolf Schuster, a center-left independent, opposes the government and wants to slow many reforms. A poll last month gave the current coalition less than 15 percent of the vote.
Despite the high cost of transition, Fero Alexander, a chemistry professor in Bratislava, is pleased that his country has reached the end of the long road to Europe. "It is very nice to know that at last we will not be third-class citizens in Europe," Alexander said, "but second class."
Peter S. Green is a journalist and writer based in Prague.