Finance Minister Mikloš says planned deficit of 5.5 percent of GDP is an illusion

Slovakia is unlikely to reach its planned deficit of 5.5 percent of GDP in 2010, with the new Finance Minister, Ivan Mikloš, saying that “the projected deficit is a mere illusion”, the TASR was told on Wednesday, July 14. Speaking after a government session, Mikloš questioned statements made by former finance minister Ján Počiatek regarding the feasibility of keeping to the original goal. Mikloš said the plan cannot be reached especially because collected taxes and payroll deductions are €1 billion lower than estimates made when the budget for this year was being drafted.

Slovakia is unlikely to reach its planned deficit of 5.5 percent of GDP in 2010, with the new Finance Minister, Ivan Mikloš, saying that “the projected deficit is a mere illusion”, the TASR was told on Wednesday, July 14. Speaking after a government session, Mikloš questioned statements made by former finance minister Ján Počiatek regarding the feasibility of keeping to the original goal.

Mikloš said the plan cannot be reached especially because collected taxes and payroll deductions are €1 billion lower than estimates made when the budget for this year was being drafted.

“Just think about this fact, €1 billion is about 1.5 percent of GDP, which means a 7-percent deficit, rather than 5.5 percent,” said Mikloš to TASR. He added that in addition there will be unplanned expenditures such as resolving the issue of cash-strapped towns and villages and paying for the damage caused by the recent floods.

He said the bad state of public finances is also due to contracts with unfavourable conditions for the state and court cases. “We'll analyse and make public all these things. We'll make public all contracts that were signed by the state or public institutions,” said the minister.

Mikloš said public finances are unlikely to become healthier until next year’s budget is adopted.

The Finance Ministry is obliged to try and bring down the deficit as much as possible, said Peter Kazimír, the previous finance ministry state secretary, in reaction to Mikloš's statement that meeting the deficit target for 2010 of 5.5 percent of GDP is 'an illusion'. Kazimír said the new government is now supposed to deliver on its pre-election promises regarding more efficient spending of public funds.

Source: TASR

Compiled by Zuzana Vilikovská from press reports
The Slovak Spectator cannot vouch for the accuracy of the information presented in its Flash News postings.

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