THE FALL of Slovakia’s four-party coalition government could endanger the credit rating of the country and increase the cost of servicing state debt, according to analysts from Moody’s rating agency. It commented that the uncertain political situation could threaten fiscal consolidation of the state budget, the SITA newswire reported.
The coalition government had promised to lower the public finance deficit to less than 3 percent of GDP in 2013. Moody’s wrote that recent polls indicate that Smer party could win the early parliamentary elections scheduled for March 10 and considers that possibility a potential risk because the past government led by Smer had accelerated the country’s indebtedness.
“Smer still has not confirmed its intention to observe these commitments to reduce the deficit under 3 percent if it gains power again,” stated Moody’s, as quoted by SITA.
Moody’s stated that a new government must reject loosening its fiscal policy if it wants to eliminate what the rating agency called fiscal imbalances and negative effects of the sovereign debt crisis in Europe.
