INEKO: State companies added considerably to 2009 deficit

State-run railways, medical facilities and the public-service media put a heavy burden on public finances, increasing the 2009 deficit by 1.1 percent of GDP, compared to 0.7 percent in 2008 and 0.6 percent in 2007, according to data in an analysis released by the INEKO think tank on August 17.

State-run railways, medical facilities and the public-service media put a heavy burden on public finances, increasing the 2009 deficit by 1.1 percent of GDP, compared to 0.7 percent in 2008 and 0.6 percent in 2007, according to data in an analysis released by the INEKO think tank on August 17.

“The biggest burden on the state is represented by the three rail companies, which last year received €400 million in subsidies but still ended 2009 with a loss of €200 million,” said INEKO director Peter Goliaš of the analysis, which was drawn up in co-operation with Michal Mušák, an analyst with the Slovenská Sporiteľňa savings bank. Examining the financial performance of 33 majority- or wholly-owned state companies, the document further revealed hospitals as the second-biggest loss-maker with an estimated combined loss of at least €50 million. Slovak Radio and Slovak Television received €15 million in subsidies between them on top of income from licence fees, but the latter still ended the year in the red to the tune of almost €6 million.

Meanwhile, companies that do make a profit, such as the Slovak Post Office, forestry company Lesy SR, the Slovak Guarantee and Development Bank, Eximbanka and, in 2007 and 2008, Bratislava Airport, produced inadequate returns on capital. “That means that, solely in financial terms, the state would be better off selling this property and depositing the money in a fixed-term account or retiring state debt bearing 4 percent or so interest,” said Goliaš. According to INEKO, the financial burden on the state could be relieved by the partial or complete privatisation of state enterprises. The state could then buy the services it needs from them instead of subsidising them.

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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