A proposal calling for fast-track legislative handling of the proposed Constitutional Act on Budgetary Responsibility – drafted by the Finance Ministry – was approved at the cabinet session on November 23 and will be debated at the next parliamentary session scheduled for November 29, the TASR newswire reported.
"Today's economic situation calls for measures that would help reduce the impact of the financial crisis on eurozone countries and stabilise monetary and economic systems in Slovakia," stated the finance ministry's rationale, as quoted by TASR.
Slovakia’s current public debt is over 40 percent of GDP and according to the legislative proposal if it crosses a 50-percent threshold, a letter explaining why the public debt is so high – with proposed remedial steps – must be written by the finance minister and presented to parliament.
If public debt reaches 53 percent of GDP, the government will be obliged to adopt a package of measures and freeze their own salaries. At 55 percent, expenditures cannot be increased for the upcoming year. At 57 percent, the government must prepare a balanced budget. If these measures do not succeed and public debt reaches a 60-percent ceiling, an automatic no-confidence vote in the government is to be held.
The 60-percent limit will apply until 2017 and then it will be lowered each year down to 50 percent. The proposed law provides three exceptions to these sanctions: a deep recession, a bail-out for banks and tackling the effects of a huge catastrophe. An independent council consisting of 15 experts will be established by the law to oversee financial management of the state.
Compiled by Zuzana Vilikovská from press reports
The Slovak Spectator cannot vouch for the accuracy of the information presented in its Flash News postings.
24. Nov 2011 at 10:00