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Budget passes easily; opposition slams deficit

THE LAW authorising Slovakia’s state budget for 2010 skipped through parliament in early November with a relative ease surprising for this kind of legislation, which sometimes has the potential to bring governments to their knees.

THE LAW authorising Slovakia’s state budget for 2010 skipped through parliament in early November with a relative ease surprising for this kind of legislation, which sometimes has the potential to bring governments to their knees.

There was not much of a tug-of-war among the ruling coalition partners either, other than a surprise bonus of €700,000 that the Slovak National Party (SNS) squeezed from the state purse for one of its favourite cultural organisations, Matica Slovenská. What the opposition parties found disturbing is that next year’s budget deficit will reach nearly €3.75 billion, one of the highest deficits ever, even though the deficit as a percentage of GDP is expected to shrink from this year’s 6.3 percent to 5.5 percent next year.

Prime Minister Robert Fico said passing the state budget is another step towards the economic stabilisation of Slovakia. According to Fico, the budget is not only part of the fight against the economic crisis but respects social standards. The prime minister also took the opportunity to lash out at the opposition parties.

“Their only point was to ensure that the situation in Slovakia is as bad as possible; that the budget wouldn’t be approved and that Slovakia would be cast in an unfavourable light both at home and abroad,” Fico said, as quoted by the TASR newswire.

The 2010 budget, which assumes revenues of €12.53 billion and expenditures of €16.28 billion, was backed by 83 of the 139 deputies present, with 53 MPs voting against. Three deputies abstained.

The opposition complained that the ruling coalition was determined to scrap every amendment they proposed and that not a single one was approved by parliament.

Ivan Štefanec, a deputy for the Slovak Democratic and Christian Union (SDKÚ), said that his party considers the most serious flaw in the budget to be the drop in spending in social areas, for people in material need or people with serious health impairments.

“We submitted amending proposals which solve these issues while not pumping up the deficit but rather by reducing government spending, for example, in the unnecessary National Property Fund [the government privatisation agency] or a lower budget for the Supreme Court,” Štefanec told The Slovak Spectator. “The freezing of salaries of government officials was proposed as well. Since the ruling coalition has not been judging proposals based on their content but based on who is submitting them, these did not go through.”

Finance Minister and Smer nominee Ján Počiatek said that one of the main responsibilities of this budget is to not create debt for the future.

“We are sending a clear message to financial markets that we are serious about consolidation of public finances,” the minister said.

Regarding the statements by ruling coalition politicians that the approved state budget is “consolidating”, Štefanec termed it nonsense.

“The best proof of this nonsense is the record highest deficit in the history of Slovakia, reaching €3.7 billion,” Štefanec said. “The government is indebting every citizen of Slovakia by at least €700 and thus not only currently robbing people but also robbing them of their future.”

Prime Minister Fico said that by passing the budget the government has made sure that ordinary people will not foot the bill for the crisis which he said was caused by foreign financial speculators, according to the Sme daily.

“It is absolutely clear that people will have to pay the bill for the wasting by government, which is the sole institution that has not reduced its spending,” Štefanec told The Slovak Spectator. “The ruling coalition has pushed through three laws already in October through which it is increasing taxes. Robert Fico is not solving what he has to: the record swelling unemployment rate, scary debts and flourishing corruption; rather he has tried to divert attention from people’s dropping social standards by socialist nationalisation.”

During the debate the opposition Christian Democratic Movement (KDH) demanded that the salaries of state civil servants be frozen; the SDKÚ wanted more money earmarked for social inclusion projects; and the Hungarian Coalition Party (SMK) asked for more funds to flow to regional governments.

The Ministry of Construction and Regional Development will see the biggest percentage increase in authorised spending, a 29.3 percent year-on-year boost with expenditure of both EU funds and national co-financing reaching €494.380 million.

The Ministries of Agriculture and Economy will also see their budgets boosted, both by 18.7 percent year-on-year, with the Agriculture Ministry being authorised to spend €1.159 billion and the Economy Ministry having €319.167 million at its disposal, according to SITA.

The Health Ministry will see its budget increase by 10.3 percent year-on-year to reach €1.440 billion, while €2.348 billion will flow to the Education Ministry, an 8.2-percent year-on-year increase. The Labour Ministry will see a 4.1-percent increase, to €1.967 billion.

The departments of defence, interior, culture and foreign affairs will need to tighten their belts next year. The Ministry of Defence’s budget will shrink by 21.3 percent to €822.944 million while the Ministry of Foreign Affairs will get 18.1 percent less than last year, with €107.954 million. The Culture Ministry’s budget will shrink by 9.8 percent to €169.773 million and the Interior Ministry will see a 9.7 percent cut to €838.575 million.

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