INTERVIEW WITH ING CHIEF ANALYST

Ján Tóth: Cheaper energy popular with voters

The Slovak Spectator (TSS): Would you agree that the new finance minister, Ján Počiatek, is less visible in the current government than former minister Ivan Mikloš? What is the difference between Počiatek and Mikloš?

Ján Tóth (JT): Ján Počiatek is a finance minister who [unlike Mikoš] is not also a deputy prime minister of the Slovak government. He is only a regular member of the [Smer] party, which nominated him to the post. He does not face any of the tough issues around making painful reforms but is rather in the position of maintaining the current state of affairs.


TSS: How do foreign markets or investors react to this new situation?

JT: The financial markets never took any notice of Počiatek before he took up his post, and therefore they had no experience of the politics he would be promoting. Due to his weak position in the party, the markets reacted sensitively to the verbal shootout between the PM and the finance minister on the adoption of the euro immediately after the elections. Therefore, there is a risk that if the finance minister gets into a conflict with someone who has a stronger position within the party, the markets might see it as risky.


TSS: What does the market feel about Economy Minister Ľubomír Jahnátek's efforts to achieve greater regulation of energy prices? Could it have a negative impact on economic development in Slovakia, and why do you think the new government is focusing on cheaper energy?

JT: Finance ministers in general are perceived as the defenders of market principles. Until now, economy ministers have been seen rather as lobbyists from whom structural reforms cannot be expected, and who mainly deal with state property rights in state-owned companies.

The Economy Ministry has also not undergone any reform, while the Finance Ministry managed to attract some talent after laying off 30 percent of its [former] staff [following an audit carried out under Mikloš - ed. note]. The conflict between the finance and economy ministers has elements of a conflict between market principles and the interests of narrow lobby groups.

Cheaper energy is a popular topic for voters, but it also helps fulfill the strict Maastricht inflation criterion. However, under certain circumstances it could also mean a transfer of profits from monopolies partly owned by the state to certain private companies.


- Martina Jurinová

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