BUSH'S FENCE-MENDING EURO TOUR IS GIVING A SMALL, LITTLE-KNOWN CAPITAL A CHANCE TO STRUT ITS STUFF

Not long ago, the notion of holding such a high-level meeting in the Slovakian capital would have been unthinkable. But since its citizens elected a center-right government in 1998--ousting populist strongman Vladimir Meciar--the central European nation has been one of Washington's staunchest supporters. Its government provoked little public outcry when it was one of the first to publicly declare support for the United States in its war on Iraq and to deploy a small contingent of Slovak soldiers there.

That support undoubtedly played a role in the White House's approval of the city as the venue for the Bush-Putin encounter, the final meeting in the U.S. president's fence-mending five-day European tour. In an interview with the Slovak daily newspaper Sme published on Monday, Bush praised Slovakia's leaders and said he wanted to come to Slovakia to congratulate its people on their move from totalitarianism to democracy.

For Slovaks, the real importance of the meeting is less its outcome than the opportunity it gives their country to preen on the global stage. "Having these two presidents meet here is hugely symbolic--it sends a clear signal to investors that Slovakia is a democratic country where people can do business," says Bratislava Mayor Andrej Durkovsky.

Bratislava may never boast the appeal or quaintness of better-known neighbors like Prague. Unlike the well-preserved Czech capital, much of the Slovak city's historic buildings were crudely razed by its communist rulers, leaving it dark, dingy and dotted with deserted buildings.

But the last few years have brought enormous changes. Today, Bratislava's streets are lively and its cafes overflowing. Thousands of day tourists from neighboring Austria now cross the border for a cheap night of dinner and the opera at Bratislava's elegant National Opera House. Overall, tourist numbers rose 28 per cent last year, with the biggest growth seen from the United States, Britain and France, says Durkovsky. During the same period, the number of passengers passing through Bratislava airport last year almost doubled to 900,000. "Bratislava has come an incredibly long way in the last decade. Back then it was dark, dirty and deserted. Now it has been completely renovated and is really buzzing," says Jake Slegers, director of the American Chamber of Commerce in Slovakia.

For many, the capital's facelift also symbolizes the country's economic transformation. Prime Minister Mikulas Dzurinda's government introduced a tough reform package over the last two years, including a flat 19 per cent tax rate, a shake-up of social benefits, pension reform and the introduction of direct healthcare payments. The program hit hard at the pockets of many Slovaks, but both the World Bank and International Monetary Fund have praised its effects.

Investors have proven eager to take advantage of such far-reaching economic reforms, especially since Slovakia's wages are the lowest in the European Union--which the country joined in 2004. Last year, the country attracted $2.4 billion worth of foreign funds, a six-fold rise from 2002. Much of the new money came from the automotive industry, putting the nation, with a population of just 5.4 million, on track to be the world's largest per-capita car manufacturer and home to three automotive manufacturing plants--Volkswagen, Kia and PSA Peugeot Citroen--by 2007.

Inevitably, Slovakia still faces serious problems. A 5.9 percent inflation rate, high unemployment in some provinces, mainly in the east; widespread poverty among the country's large Roma minority and public dissatisfaction at the cost of the economic reform package will continue to pose problems for the government and its people.

But for this week, at least, the mood will be upbeat as local officials promote their country to the outside world. "Many people still don't know that Slovakia and Slovenia are two different countries or that it is no longer Czechoslovakia," says Beata Lukacova, marketing director at the Slovak Tourist Authority. Nor have many residents forgotten that once CNN infamously confused Switzerland and Slovakia on a map.

That, they hope, is about to change. "Slovakia is a bridge between East and West," former president Rudolf Schuster told NEWSWEEK. "Bratislava and Slovakia will go down in history thanks to this summit." The main items on the Bush-Putin agenda might be terrorism and Moscow's latest political restrictions, but for Slovakia, the real importance of the encounter lies in the where, not the what.

BUSH'S FENCE-MENDING EURO TOUR IS GIVING A SMALL, LITTLE-KNOWN CAPITAL A CHANCE TO STRUT ITS STUFF | News