"In praise of the budget"
By Juraj Porubský
The Slovak state budget for 2007 could have been very, very bad - it would have been enough for the ruling parties just to fulfill their pre-election promises. Luckily, this didn't happen, and the Robert Fico cabinet managed to meet the condition that the deficit not be larger than 3 percent of GDP. With this in mind, we have chosen a few things to praise.
The first is Slovakia's economic growth, which didn't just fall from the sky. Unlike its predecessors, the Fico cabinet will not have to take any austerity measures in January, because the economy is growing so quickly that the main problem of the government is how to spend the money.
The second object of praise is the partnership between the central bank and the prime minister. Until Fico visited the headquarters of the National Bank of Slovakia in the summer, he was talking about whether it was wise to replace the crown with the euro, and calling for analyses. Following his visit all doubt was gone, and the government committed to fulfilling the criteria.
The third praiseworthy party is the Finance Ministry and its boss, Ján Počiatek. Počiatek managed to talk Fico just in time out of his promises to reduce VAT on food, to compensate the clients of pyramid schemes, and to raise government payments for health insurance for state employees, all with the reminder that Slovakia wants to introduce the euro.
The fourth candidate is certainly coalition MPs, who passed the budget, perhaps with a little help from appointments to state posts.
If there is anything to criticize in the budget it is the fact that PM Fico more than doubled the amount of money that he will have exclusive power to divide up, as well as the cuts to spending on freeway construction and other investments, and over Sk6 billion in uncovered promises for next year.
Smart cabinets put their most difficult and least popular measures in their first budget. Thanks to the unrivalled economy, this government felt no pressure on expenditures. It may find it difficult to be as generous in the coming years.
