Goodbye to magical realism

THIS year Slovakia has had to worry about the adoption of two budgets. The first, Slovakia's state budget for 2006, has already been passed. The second still lingers in the purgatory of the draft proposal.

THIS year Slovakia has had to worry about the adoption of two budgets. The first, Slovakia's state budget for 2006, has already been passed. The second still lingers in the purgatory of the draft proposal.

The passage of Slovakia's state budget was smooth and almost painless compared to the complications surrounding the EU budget proposal for 2007-2013.

Slovaks often remain indifferent about European Union issues. However, the discourse surrounding the EU draft budget received intense media attention at home. In some ways it upstaged the 2006 state budget story, which many consider the "most important legislative act" the country can perform.

Prime Minister Mikuláš Dzurinda and his closest ally, Finance Minister Ivan Mikloš, most likely prepared for the worst, anticipating endless and fruitless debate, obstruction on the part of the opposition in any and all imaginable forms, and last minute amendments that would inevitably deepen the public finance deficit.

None of this happened. Though the opposition was critical of Minister Mikloš' budget proposal in general - they found little to sink their teeth into. The government managed to push through the 2006 budget in a single go. Even members of the opposition found the coalition government's draft legislation "reasonable".

The budget assumes a deficit at 2.9 percent of the GDP, which is 0.5 percent lower than the 2005 budget deficit. Revenues should reach Sk272.717 billion (€7.2 billion) and expenditures Sk330.2 billion (€8.76 billion), resulting in a deficit of Sk57.468 billion (€1.52 billion) after all amendment proposals are incorporated.

Dzurinda thanked parliamen-tary deputies for not burning a bigger hole in the state's pockets. But some warn that the budget's adherence to the original 2.9 percent-of-GDP headline gap provides some fiscal leeway for the present government at the expense of the next. According to these critics, the 2007 government will have to adopt a relatively strict fiscal stance to deliver the all-inclusive fiscal gap target of 3.0 percent of GDP.

Certainly there are justified reasons for the state's reluctance to immediately reduce spending. But the ministries should not get too proud of themselves for trimming down in 2006, as most of these small reductions represent a momentary fast rather than the true diet they will eventually have to undergo.

Historically, the opposition has used debate over the state budget to punish the government for its perceived sins over the past year.

A couple of weeks ago, political analysts still expected the state budget's passage to be one of the Herculean tasks bound to cost Dzurinda political capital. The prime minister was expected to make compromises on the budget's behalf that voters would not like.

The opposition did raise the issue of coalition bribing, suggesting that the minority government might try to buy the votes of independent deputies to pass the state budget. However, it remained a hypothetical blame-game rather than a serious accusation.

On the other hand, perhaps voters will never really know the true cost of the budget's smooth passage. Was it really the soundness of the draft proposal that made parliamentary deputies push "yes" in favour of the draft legislation?

The Slovak media has suggested that the real victor of the state budget is Education Minister Martin Fronc. He managed to wrangle an additional Sk3 billion (€80 million) for his department.

However, one look at Fronc's empire is to wish him several times the spoils.

There should be no illusion about the declining state of Slovakia's education sector. The Academic Ranking and Ratings Agency ranked and evaluated 19 universities and high schools in Slovakia. To regard the results as "not as good as they should be" would be a euphemism.

The ratings agency released its results with the caveat that its findings were designed to give students information on various schools so that students could make learned choices about where to enrol. The goal was not to criticize various institutions. Nevertheless, the ratings agency's findings were disturbing.

The majority of universities have very weak or no science and research programmes. Although the government has initiated an effort to move towards a knowledge-based economy, universities that lack basic research facilities can hardly pave the way.

It would be naive to think that an additional Sk3 billion crowns will save the country's alma maters. Without the adoption of a reasonable educational reform package, progress can hardly be made in the education sector.

But still, Sk3 billion might save some schools from shutting down in November because they lack the funds to pay the heating bills.

It is true that there were fewer anomalies in this year's draft budget plan, less obvious flaws for the opposition to tear into and dwell upon. Also, these days, the public is more demanding. They expect to see from where the money flows and how it is used.

The so-called "creative" or "magical-realist" approach to drafting and preparing the state budget, so characteristic of the Vladimír Mečiar government of the 1990s, is over. Even if there are political bargains being made behind closed doors, state funds are much less destined to flow into black holes. Let's hope that gone are the days where the hapless citizen is told that funds, having disappeared, were used "in the public's interest".

By Beata Balogová

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