An end to deficit spending should come sooner, said Slovak central bank (NBS) governor Ivan Šramko after Wednesday's, September 30, government session, the TASR newswire reported.
“I have come to such a conclusion based on a resolution we have passed at the European Central Bank (ECB) governors' council. This resolution calls on governments in 2010 to responsibly return to healthy public finances. They have to submit a trustworthy consolidation strategy in the year when the stabilisation of the economy will take place - which should be 2010 based on our prognoses,” said Šramko to TASR.
The resolution recommends the countries which have "normal" public finances to reduce deficit spending significantly more than 0.5 percent of the GDP, and countries with significant debts and large deficits to do so at the level of 1 percent of GDP.
“Based on this document, I recommended to speed up the consolidation at least to the level of 1 percent of GDP,” said Šramko.
“At the government session I also spoke about Slovakia's debt which could be considered low in comparison to other European Union countries; but on the other hand this year's deficit of 6.3 percent and next year's of 5.5 percent of GDP increases the debt significantly,” the NBS Governor said. But he does not think that this sum will be unacceptable within the current EU context, nor will it jeopardise Slovakia's position on the financial markets or endanger its credit rating. TASR
Compiled by Zuzana Vilikovská from press reports
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