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Fico: A 'back door' solution needed in times of crisis

If next year's expectations for the Slovak economy growth don't come to fruition, the Slovak Government has to have a 'back door' solution for the public finances, Prime Minister Robert Fico told the TASR newswire on December 28. The 'back door' solution, according to Fico, could either be across-the-board cutting of budget expenses, or an increase in the already passed budget deficit proposal. Due to the global economic crisis, the Finance Ministry already re-evaluated the economic growth prognoses earlier in 2008 - from initial 6.5 percent to 4.7 percent. The coalition decided to increase the public-finance deficit from 1.7 percent to 2.08 percent of GDP. Fico admitted, however, that the real development could be even worse.

If next year's expectations for the Slovak economy growth don't come to fruition, the Slovak Government has to have a 'back door' solution for the public finances, Prime Minister Robert Fico told the TASR newswire on December 28. The 'back door' solution, according to Fico, could either be across-the-board cutting of budget expenses, or an increase in the already passed budget deficit proposal.

Due to the global economic crisis, the Finance Ministry already re-evaluated the economic growth prognoses earlier in 2008 - from initial 6.5 percent to 4.7 percent. The coalition decided to increase the public-finance deficit from 1.7 percent to 2.08 percent of GDP. Fico admitted, however, that the real development could be even worse.

"This explains the 'back door' solution," he stated.

As far as the across-the-board cutting of budget expenses is concerned, Fico pointed out that it wouldn't concern social programs.

"Social programs and economic growth boosts will stay untouched. We'll look for other possibilities for cuts somewhere else," he said. The PM doesn't exclude the possibility of the public-finance deficit increasing. "I can't exclude it now, since all of the countries are leaving this option open in case the economic crisis worsens ... no country would then hesitate over deficit increase. I guarantee you, nobody will hesitate."

Conceding that during the times of a crisis a balanced budget by 2011 is not the priority, Fico thinks the most important thing is to survive these difficult times in a way that the crisis affects ordinary people as little as possible. TASR

Compiled by Zuzana Vilikovská from press reports
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