SLOVAKIA is likely to be taken out of the excessive deficit procedure (EDP) programme.
The European Commission recommended on June 2 that the Council of the EU should drop the EDP programme for six countries: Belgium, the Czech Republic, Denmark, the Netherlands, Austria and Slovakia.
On the other hand, the EC recommended that Slovakia work to consolidate its public finances. This includes making improvements in the business environment, making public procurements more effective, fighting corruption and decreasing youth unemployment, the Sme daily wrote.
At present, 17 EU member states are under the EDP. If the council at its next session follows the recommendations of the EC to release the six countries, the total number of countries subject to this procedure will fall to 11.
A decision to release a country from the EDP is based on a “durable correction” of the excessive deficit. This is deemed to have been achieved if the reported data for the previous year (2013 in these cases) show a deficit below 3 percent of GDP and the forecast of the EC indicates that the deficit will not exceed the 3 percent of GDP referenced over the forecast time frame (currently 2014 and 2015).
Finance Minister Peter Kažimír responded to the news saying that Slovakia “clearly deserves” to be released from the EDP.
“I’m particularly pleased that in 2013 we have achieved these results, because last year was a very difficult one for Slovakia and for the European economy as a whole,” Kažimír said, as quoted by the TASR newswire, reflecting on Slovakia’s state budget deficit for 2013, which dropped to 2.77 percent of GDP from 4.5 percent in 2012.
According to him, release from the EDP will mean Slovakia will not have to pay a fine of 0.2 percent of GDP, or about €150 million.
“In the past few months Slovakia has enjoyed access to record-low interest loans for financing its debt,” Kažimír said. “Staying in this procedure would mean an increase in spending on the state’s debt servicing. Were we to fail in being released from the procedure, our credibility would be jeopardised.”
Slovakia was placed in the EDP under the first government of Robert Fico, when the deficit rose to 8 percent of GDP.
9. Jun 2014 at 0:00 | Compiled by Spectator staff