Slovakia's main left-wing party, the former communist SDĽ, has prepared an economic plan of action for the country that bears little trace of traditional socialist thinking. Following the example of Great Britain and the US, where left-wing parties have adopted many of the policies of the right, the SDĽ advocates reduced government spending, tax breaks for small and medium enterprises and lower interest rates as the best way to turn the economy around.
Brigita Schmögnerová, the SDĽ's vice-chairperson and resident economic expert, outlined her party's economic policy for The Slovak Spectator.
"In the first month of the new government we will try to consolidate the economy," Schmögne-rová said. "We are concerned mostly about the growing current account deficit and the growing fiscal deficit." The first areas of concern, she explained, would be "some big changes in exchange rate policy," as well as reviving sectors such as "the healthcare and transportation industries, which are very close to collapse."
But repairing the damage to these sectors would not lead to runaway spending, Schmögnerová maintained. "We would like to decrease government investment in some projects, like highways, the building of hydroelectric dams, and we also want to slow investments in local government buildings," she said. "We have to cope with the growing misuse of money in the state sector."
Not only would spending be slashed, but revenues would be given a boost through more efficient tax collection. "On the income side, which will take some more time, we would like to improve the collection of taxes, which is very poor and getting poorer and poorer," declared Schmögnerová.
Having fixed some of the country's gravest macroeconomic problems, the SDĽ would turn its gaze on the troubled small and medium enterprise sector. "Credits have become very expensive for small and medium enterprises, and the bureaucracy very oppressive compared to the situation for big companies which have close contacts with the government.," Schmögnerová said. The SDĽ would simplify economic legislation: "We would like to give very small entrepreneurs the option not to pay taxes, but to buy licence for their businesses instead, which would make their operations easier from the administrative point of view."
The other half of the SDĽ plan would involve developing a "service sector" for small businesses, which would offer assistance in preparing projects to support marketing and export activities. Schmögnerová called for the government to get more involved, and for the Chamber of Commerce to be mobilized.
The increased economic stability created by spending cuts and simplified legislation Schmögnerová concluded, would eventually win a greater share of FDI for Slovakia. "We would like to give foreign investors, both large and small, easier administrative access to the country than they presently enjoy," she said. "But of course it will take some time before we overcome the low credibility of this country."