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Governing parties agree 2012 state budget

All four governing parties reached an agreement on the 2012 state budget proposal on Wednesday, November 16, setting the upper limit for the state deficit as 4.6 percent of GDP. They also agreed that if the upper limit were later to be reduced, this would require the unanimous agreement of the Slovak Democratic and Christian Union (SDKÚ), Christian Democratic Movement (KDH), Freedom and Solidarity (SaS) and Most-Híd.

All four governing parties reached an agreement on the 2012 state budget proposal on Wednesday, November 16, setting the upper limit for the state deficit as 4.6 percent of GDP. They also agreed that if the upper limit were later to be reduced, this would require the unanimous agreement of the Slovak Democratic and Christian Union (SDKÚ), Christian Democratic Movement (KDH), Freedom and Solidarity (SaS) and Most-Híd.

"We view passing the state budget as an important stabilisation element for both citizens and the financial markets," said Prime Minister Iveta Radičová, as quoted by the TASR newswire, adding that MPs from the four parties had promised not to submit amendments that would lead to any increase in the agreed deficit. "The agreement we have reached is a good foundation for passage of the 2012 state budget in parliament," Radičová stated.

The state deficit was previously forecast to be 3.8 percent of GDP. However, the amount increased by more than €800 million after various additional expenditures were projected for 2012, such as €690 million needed to cover costs arising from lower-than-expected economic growth (which is now estimated to be only 1.7 percent next year), €70 million for increased health-care costs, €61 million for regional authorities and €28 million for the cost of an early general election in March. On the other hand, income in 2012 should also grow: €103 million will come from changes in the overall forecast, another €47 million from European Union funds, €7 million will be saved by freezing the salaries of public officials, and €120 million is expected to be paid to the state in the form of dividends by gas utility Slovenský Plynárenský Priemysel (SPP). "Therefore, the balance will be minus €573 million, amounting to a rise in the deficit from 3.8 to 4.6 percent," according to Finance Minister Ivan Mikloš (SDKÚ).

Source: TASR

Compiled by Zuzana Vilikovská from press reports
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