A Constitutional Law on Budgetary Responsibility, or so-called debt brake law, was passed in parliament on Thursday, December 8, with 146 out of 147 MPs present voting in favour; only independent MP Anna Belousovová abstained.
The new legislation sets up an independent Board for Budgetary Responsibility that will oversee the government's compliance with budgetary objectives, the TASR newswire wrote. In addition, it stipulates the maximum level of public finance debt and measures that will have to be applied should public debt reach certain levels. The debt threshold for public finances will be set at 60 percent of GDP initially and will be lowered gradually to 50 percent after 2017.
If the public-finance debt exceeds 50 percent, the finance minister will have to write a letter to parliament explaining the reasons and proposing remedial steps. If the debt reaches 53 percent, the government will be obliged to adopt a package of measures and freeze its own salaries. At 55 percent, it will be impossible to increase expenditures for the following year. At 57 percent, the government will have to prepare a balanced budget. If these measures don't work and the debt still reaches the 60-percent ceiling, the government must initiate a vote of confidence.
According to the legislation, a three-member Board for Budgetary Responsibility financed by Slovakia's central bank, the National Bank of Slovakia (NBS), will oversee the government's decisions vis-a-vis budgetary objectives. The members and later only the chair of the board will be elected by parliament.
Compiled by Zuzana Vilikovská from press reports
The Slovak Spectator cannot vouch for the accuracy of the information presented in its Flash News postings.
9. Dec 2011 at 10:00