SLOVAKIA had the highest state debt in its history, €42.3 billion or 58.4 percent of GDP in late March, based on the Eurostat statistics. The debt increased by 3 percentage points y/y. The Finance Ministry says that the debt increased because the state managed to borrow money from investors for low interests. It expects that the debt will return to near to 55 percent of GDP by year’s end. If the debt were to exceed 57 percent at the end of the year, the so-called debt brake would automatically kick in and force the government to have a balanced budget next year, meaning billions in spending cuts.

“The Finance Ministry used the historically most advantageous conditions for the sale of state bonds, by which we have created a cash reserve,” Alexandra Gogová, spokesperson of the Finance Ministry, told the public broadcaster RTVS. “Closer to the end of 2014 the debt should only decrease.”

Andrej Arady, analyst with VÚB Banka, explained that the state issued a relatively large portion of state bonds from the whole-year plan during the first quarter of 2014, by which it has created a relatively good position to acquire during the coming months some of its earlier state bonds sold under less advantageous conditions.