SLOVAKIA is on its way to correcting its excessive public finance deficit by 2007. However, structural adjustment should be strengthened to ensure a larger margin of correction in 2007 and speed up the progress towards the medium-term objective, reads the latest report by the European Commission (EC).
"Slovakia's immediate challenge is to ensure correction of its excessive deficit by 2007 by a larger margin and strengthen its structural budgetary adjustment in the following years to be able to face possible challenges in less positive periods of the economic cycle", said Economic and Monetary Affairs
Commissioner Joaquín Almunia.
The European Commission evaluated Slovakia's updated convergence program for 2006-2009. According to the program, the Slovakia's general state deficit (including the cost of the pension reform) should decrease to 2.9 percent of GDP this year from 3.7 percent of GDP in 2006.
In the following years the deficit should gradually go down to 2.4 percent of GDP in 2008 and 1.9 percent of GDP in 2009. This should help Slovakia adhere to the scheduled date for joining the euro zone on January 1, 2009.
Slovakia submitted a new update of its convergence program on 1 December 2006, covering the period 2006-2009. The program aims to correct the excessive deficit by 2007, relying on expenditure restraint.
