"We must follow new trends."Peter Prísny
The Slovak Democratic Coalition (SDK), the country's biggest opposition party, is convinced that fixing Slovakia's chaotic economic laws is the vital first step towards revitalization of the country's small and large scale enterprises. According to Viliam Vaškovič, the party's economic expert, the legislative renewal would revive the financial and banking sector, capital markets and the housing industry.
"We have to follow the new trends in economic thinking from the European Union," Vaškovič said in explanation of the SDK's vision of the future Slovak economy.
One of the first legal changes the SDK wants to make is to the law on banks. Vaškovič said that the party aimed to "increase the responsibility of boards of directors for all banking transactions, as well as that of supervision board members and head representatives of banks."
Also subject to alteration, Vaškovič said, would be the law on prices. An amendment to the current law should "remove the chance of interference with the creation and supervision of liberalized prices."
Besides such legislative changes, the SDK post-election economic program contains four other main ideas. "We also want to create core market institutions like tax offices, banks, courts and other bodies and provide for their transparent supervision," Vaškovič said. "Then we'd like to consolidate the state budget and public finances, revitalize the banking sector and solve the housing problem."
Pressed for details as to how such a 'consolidation' might work, Vaškovič stressed the need for improvement both in state incomes and expenditures. In view of the SDK's promise to enact a wide-ranging tax cut, Vaškovič emphasized the need for improved tax collection methods. "We want to keep tax rates at a level which will motivate people and not discriminate against them," he said.
Of course, tax cuts and lower budget deficits would require greater fiscal discipline, and Vaškovič cited the elimination of inefficient spending and the shifting of executive budgetary and fiscal power onto the shoulders of local authorities as the main elements of the SDK's plan to rein in spending. State budgets would be under a strict system of control and judgment of expenditures, he said, "and we will give priority mostly to the school, health-care and housing sectors."
The SDK's prescription for the ailing banking sector and the moribund capital market is simple: Increase foreign investment. The party aims to privatize state shares in both the IRB and VÚB.
The bad credit portfolios of major state banks has also attracted the party's attention. "We see the solution in a systematic reduction of insolvency in the company sphere, increasing the financial discipline of Slovak companies and applying the law on bankruptcy and compensation," said Vaškovič.
Finally, the party plans to address the question of new housing. The SDK, according to Vaškovič, knows that the state "can play only a secondary role here," but can still be effective. If the party could pressure banks into offering mortgage loans, he said, it would solve the problem of the exorbitant downpayments house buyers must shell out for a property (currently 40 - 50% of the entire loan amount). "By this we would be able stimulate the erection of about 14,000 housing units a year, which, compared to the 5,000 being built nowadays, is a significantly higher, but still very realistic number," stated Vaškovič.
