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The world according to Fico ... and why it cannot work

ROBERT Fico's opposition party Smer offered Slovaks a new "vision" in which the poor see their income rise and the rich are forced to demonstrate solidarity and pay more to the state piggy bank.

ROBERT Fico's opposition party Smer offered Slovaks a new "vision" in which the poor see their income rise and the rich are forced to demonstrate solidarity and pay more to the state piggy bank.

In this new world order, the state would regain control of strategic industries. At the very least, further privatization of state property would be stopped.

Education would be free of charge and, by some miracle, there would be enough money left over to develop universities and research centres.

In the world according to Smer, healthcare would radically improve and physicians would see an increase in income. The word "corruption" would become a thing of the past, a vintage of previous regimes.

This is the impression one gets after the Smer party congress on December 3, in which it released a document outlining its basic principles.

Indeed, Smer has been trying to shed the image of economic and financial amateur. It wants to present itself as a party that can support its statements with concrete proposals, one that can offer viable, thought-out alternatives to the ruling coalition.

Analysts admit that Smer's document, The Return to Human Dignity, represents the party's first serious effort at presenting a complex concept underpinning its statements about "lifting the living standards of Slovaks".

The problem for Fico, however, is that analysts think Smer's concepts are simply not destined to work in a way that the party would like them to.

Smer pledged that if it was voted into power, it would kill the flat tax that has brought more publicity to Slovakia than any other governmental campaign.

In Fico's world, people with the lowest incomes would see their taxes drop to 15 percent. However, Finance Minister Ivan Mikloš, the father of the flat tax, argues that in "his world", people with the lowest incomes pay no taxes at all.

In Fico's world, the VAT on select goods, such as food and books, would be lower. Advocates of the current tax reform argue that trials in other countries show that lowering the VAT does not necessarily lead to lower prices for consumers. Besides, lowering VAT would simply benefit those wealthy enough to consume.

The governmental Institute of Finance Policies estimates that Fico's proposals would deepen the public finance deficit by Sk9 billion (€230 million) annually. Financial analysts say economics is simply not Fico's strong suit.

Mikloš warned that Smer's plans threaten the efficacy of tax collection, while Fico's proposal for tax bonuses and exemptions alongside high tax rates would usher in tax evasion.

The finance minister considers Smer's plan an irresponsible compilation of models that have failed in wealthier countries than Slovakia.

Smer's document promises a few surprises to foreign investors in Slovakia as well.

The new "dignity" concept prepared by Fico's finance man, Igor Šulaj, says that profits made by foreign companies in Slovakia should be taxed. However, he claims that he would want to motivate the businesses "not to spend their earned money but rather invest".

Who knows whether Smer has ever seen the EU directive, which says that EU states should not burden the dividends of the daughter company of a foreign investor by tax if the investor comes from another EU country.

Results of the recent regional elections showed that people in the poorest regions do not necessarily vote for leftist parties - especially if the leftist ideas are offered under the Smer brand.

In fact, the outcome of regional elections did not favour Smer at all, which is not surprising, given that the party historically performs far worse in elections than in public opinion polls. Although Smer enjoyed 30 percent support in surveys, Smer was not a clear winner in the elections (if Smer could be declared a winner at all).

Fico's political fight is tougher than it was in 1998, when any party was considered better than the government of Vladimír Mečiar, which pushed Slovakia into international isolation.

The current government does not have a flawless record. Unemployment is still high. The gap between the wealthy West and poor East is deep. There are valleys of poverty and people at many levels of society struggle to make ends meet out of their monthly wage. This is a fact that cannot be erased by praise for reforms from international organizations.

But still, Fico would have to offer something that presents some feeble guarantee of substance to his statements about a world more just to the poor, otherwise his agenda will remain populist, a political stain that he will never manage to wash off.

Smer claims that its programme is a standard social-democratic programme, which is based on the country's constitution.

It is not that Slovakia does not hunger for serious social-democratic policies and a determined leftist force. The fact is, leftist voters are in danger of falling prey to the ideologies of the Communist Party and nationalist parties because these groups pretend to offer solutions. Let's hope that these same people do not fall into Smer's hands because this party, too, is pretending to offer an alternative.

By Beata Balogová

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