The Slovak government must adopt additional measures worth €498.20 million if it wants to stick to its budgetary goals for this year – a 4.6-percent deficit with a goal toward shrinking it to 3 percent in 2013, according to a decision made by the Cabinet at a session on Monday, July 30.
The government has quantified the estimated shortfall in tax revenues at €348 million against the budget approved by the former cabinet. This is a result of the economy performing significantly poorer than originally forecasted. Other money-consuming measures that must be carried out this year are the replenishing of the emergency reserves of oil products (€95 million) and additional contracting related to the Regional Operational Programme (€76 million). This shortfall is expected to be partially compensated by higher yields (€80 million) from dividends from state-owned companies, and €38 million in austerity measures - lower transfers to the EU budget.
According to the Finance Ministry, it will be necessary to introduce quite a few restraint-oriented measures in the state budget chapters this year. Prime Minister Robert Fico said after the session, as quoted by the TASR newswire, that another austerity step will include a freeze on public procurements that aren't related directly to the functioning of individual ministries until September 30 – which should save €120 million, the Sme daily wrote in its Tuesday, July 31, issue.
The government also made a decision to amend the Social Insurance Act in fast-tracked proceedings, thereby introducing it one month earlier, which should bring €40 million more to the state coffers thanks to the re-jigging of the respective contributions to the first (universal) and second (capitalisation) pillars of the pension system. Altogether, the second pillar will bring €160 million to the treasury, Sme wrote. The government further recommended local and regional authorities to stay within their means – spending only what their actual income will be. Banks and regulated state companies will contribute €235 million totally; excise tax on tobacco should be increased, too, Sme wrote.
The opposition dislikes the fact that the government is adopting reform measures in a non-standard, fast-tracked way. According to Slovak Democratic and Christian Union-SDKÚ MP Ľudovít Kaník, the opposition is considering filing a motion with the Constitutional Court.
(Source: TASR, Sme)
Compiled by Zuzana Vilikovská from press reports
The Slovak Spectator cannot vouch for the accuracy of the information presented in its Flash News postings.
31. Jul 2012 at 10:00