Employers outline €6.5 billion in spending cuts, but Fico fires back

In a country grappling with high deficits and mounting pressure to consolidate its finances, Slovakia’s leading employers have unveiled a detailed cost-cutting plan they claim could save the state €6.5 billion – without raising taxes.

“Raising taxes is the easy way out of poor fiscal management,” said Republic Union of Employers (RÚZ) president Miroslav Kiraľvarga.

The proposal, revealed on Wednesday by the Republic Union of Employers, was submitted to Finance Minister Ladislav Kamenický earlier this month but had not been made public until now, according to Denník N. It comes as Kamenický, a member of the ruling left-wing Smer party, seeks to cut next year’s budget deficit by €1.8 billion.

21 proposals

RÚZ’s 21-point plan calls for sweeping reforms in public administration, including a gradual 15 percent reduction in civil service employment. Over the past 15 years, the number of public sector workers has risen by 100,000, the union claims, now accounting for one in five jobs in the country. RÚZ argues that attrition through retirements – without replacements – could generate substantial savings, notably up to €2 billion in the long term.

Other proposed measures include a three-year freeze on public sector wages, the elimination of two national holidays as days off, and the scrapping of schemes such as vacation vouchers and housing loan subsidies. The group also proposes cancelling early retirement benefits – a move it says could save €400 million – arguing that existing unemployment and sickness support can serve as fallback mechanisms.

RÚZ further calls for the consolidation or abolition of redundant state agencies, including the Gambling Regulation Authority.

The organisation insists its proposals would not only stabilise public finances but also preserve Slovakia’s economic competitiveness.

Employers slammed by Fico

However, Prime Minister Robert Fico, who returned to power in 2023, swiftly rejected the proposals. Speaking during an inspection visit to the Finance Ministry last week, he accused employers of targeting vulnerable groups. “You want the government to take money from pensioners?” he asked rhetorically. “Strangely, you haven’t mentioned sacrifices from your own ranks.”

Fico, who has styled himself as a defender of the welfare state, cited employer-backed suggestions such as scrapping the 13th pension, ending free rail travel for students and pensioners, and cutting free school lunches. “That’s a €35–40 million cost, and we need billions,” he said, suggesting instead that Slovakia consider progressive taxation for higher earners.

RÚZ denies it proposed abolishing the 13th pension outright. “We support better targeting of benefits, but we’re not calling for its complete abolition,” Kiraľvarga clarified.

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While his cabinet’s previous consolidation package focused on tax increases, Fico said last week that he is prepared to implement significant savings within the state apparatus, pointing to potential cuts in the number of civil servants, local governments, and even members of parliament. He also floated the idea of raising the threshold for parties to enter parliament. However, he expressed doubt that his proposals would gain support from his two coalition partners or the opposition.