Fico may use bank levies to buy SE shares

PRIME Minister Robert Fico is allegedly considering using the money to save banks, in order to buy shares in the Slovenské Elekrárne (SE) electricity producer, the Sme daily reported.

(Source: SME)

He indicated this intention during the political talk show Sobotné Dialógy (Saturday Dialogues) broadcast by the public-service RTVS.

The Government’s Office, however, did not say how the money would be used, explaining it would not answer Sme questions until the daily apologises to Fico.

The daily wrote that the money cannot be used directly as the law stipulates that the government can use the money from the fund only if the company is owned solely by the state. In the case of SE, Slovakia has only 34 percent, with the rest being controlled by Italian company Enel. Thus, one of the scenarios is that Smer will establish a new state-run company to which it will provide money from the bank levy. This firm will then buy shares in SE, according to Sme.

This scenario is probable as the Economy Ministry has stated in the past that Slovakia may establish an energy holding via which it would own shares in various energy companies, the daily wrote.

The sum in the fund, to which commercial banks send the bank levy, currently amounts to more than €0.5 billion, with another €0.5 billion expected to be paid over the following years. The money was originally predicted to be used to save banks in case of another crisis. The law originally banned the use for other purposes.

Smer, however, changed the law without discussing it with the European Central Bank (ECB). Under the new rules, the government may use any amount from the sum and distribute it to any state owned company, Sme reported.

Both opposition and experts warned at the time that the government created a tunnel to the bank fund which it may use anytime it wants. Jozef Kollár of Skok party said that spending the money from the bank fund may cause that if another crisis comes and any bank will go bankrupt, there will be no money to rescue it.

“The only one to stop this is probably the ECB,” Kollár said, as quoted by Sme.

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