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Austrian economist predicts Slovak economic stagnation in 2010

The Slovak economy will stagnate in 2010 even if the economies of Slovakia’s biggest customers, such as Germany and the Czech Republic, recover, TASR was told by Zdenek Lukáš, an economist from the Vienna Institute for International Economic Studies, on Sunday, October 11.

The Slovak economy will stagnate in 2010 even if the economies of Slovakia’s biggest customers, such as Germany and the Czech Republic, recover, TASR was told by Zdenek Lukáš, an economist from the Vienna Institute for International Economic Studies, on Sunday, October 11.

Lukáš views the fact that the government wants to reduce the public-finance deficit in 2010 to 5.5 percent of GDP as positive. He views the tools with which the government wants to do this as insufficient, however.

“It's illusionary to expect that tax incomes for next year will grow without reforms. A significant recovery in the economy would be necessary for this. We don't expect one, however,” said the economist.

According to Lukáš, no substantial consolidation of public finances, by which the Government aims to cut the deficit to 3 percent of GDP by 2012, will be possible without increasing tax incomes. “This can be achieved by radical changes on the side of incomes, including by raising taxes,” he added.

The government expects that it will manage to draw €3.5 billion from EU funds in 2010 but Lukáš views its chances of success as low. “Completely-prepared and clearly-defined projects and lobbying in Brussels are missing in particular,” he said, adding that these problems are common among new EU-member countries. TASR

Compiled by Zuzana Vilikovská from press reports
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