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World Bank wants Slovakia to meet euro schedule

THE WORLD Bank is still optimistic about Slovakia's economic development, but it says the country should do everything in its power to adopt the euro as planned on January 1, 2009 and continue its fiscal consolidation.

THE WORLD Bank is still optimistic about Slovakia's economic development, but it says the country should do everything in its power to adopt the euro as planned on January 1, 2009 and continue its fiscal consolidation.

Slovakia must confirm its current economic success by sustaining it in the future, said Anton Marcinčin, an economist for the World Bank for Slovakia, as the bank released its regular report on EU newcomers.

If Eurostat increases Slovakia's general government deficit by several tenths of a percentage point, due to the EU statistics body's doubts over the government's deficit calculations, it won't be that important, Marcinčin said

"The thing that matters is whether the government and the parliament consistently do everything they must to meet the euro adoption plan," he told the media.

The cabinet and the parliament should carefully think over all their economic policy proposals and any statements that could impact decisions on euro adoption, Marcinčin said.

Slovakia should continue with its fiscal consolidation and be careful in making decisions that could harm the economy in the future, he said. That includes public-private partnership (PPP) projects, which the Slovak cabinet intends to use for speeding up the process of highway construction, the bank said.

The government must also guard against weakening the so-called capitalisation pillar in the old age pension system, where pension funds are administered by private fund management companies, by moving some savings into the pay-as-you-go pillar administered by the state insurer Sociálna Poisťovňa.

World Bank report also criticised the latest changes to the Slovak Labour Code. The new law weakens the flexibility of the labour market and increases the employment costs, the report said. The bank said the 2007 changes to the law reversed positive changes made to the code in 2003.

The World Bank released its Regular Economic Report of EU8+2 on Slovakia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovenia and Bulgaria and Romania on September 27.


- With press reports

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