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State budget approved by parliament

THE RULING coalition approved the state budget for 2007 in parliament yesterday with the support of all 85 MPs for government MPs in the 150-seat legislature.

The deficit is set at Sk38.4 billion in revenues of Sk310.5 billion and expenditures of Sk348.9 billion. At 2.94 percent of GDP, the forecast shortfall is below the 3 percent of GDP ceiling set by the Maastricht criteria for adopting the euro.

Slovakia plans to adopt the euro on January 1, 2009, and meeting the deficit criterion in this budget was regarded as the first real test of the leftist-populist Robert Fico government’s sincerity about achieving that goal.

The political opposition, all 65 of whose MPs voted against the measure, criticized the budget mainly for raising spending on agriculture at the expense of education, R&D and building the “knowledge economy”. Former Finance Minister Ivan Mikloš also noted that some spending promises for next year were not covered in the budget, and that at a time when Slovakia is experiencing 7-8 percent economic growth, the government should be trying to achieve at least a balanced budget, if not a surplus.

However, Finance Minister Ján Počiatek expressed satisfaction with the document, while Prime Minister Robert Fico said that it finally put paid to fears that his government after June elections would “tear down reforms and be bury the so-called great successes of the previous government”.

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