Feb 20 • 17:44 UTC 🇸🇰 Slovakia Denník N

The Budget Council warns that new European rules will allow Fico's government high deficits without consolidation

Slovakia may meet European budgetary rules even with a deficit of 6% in an election year, raising concerns over fiscal responsibility under new rules.

According to Slovakia's Budgetary Responsibility Council, the country would still comply with European budgetary rules even if the deficit in the election year reaches 6%. The council argues that the rules are set so loosely that they do not compel the government to consolidate public finances, allowing for significant budgetary slack. This situation raises questions about the long-term sustainability of Slovakia's fiscal policy under the current administration led by Prime Minister Robert Fico, who has been known for his populist policies.

The council has estimated that without additional fiscal measures, the deficit would be around 4.4% of GDP this year and could rise to approximately 5.3% in 2027. These projections suggest that Slovakia's debt could exceed 72% of GDP. Finance Minister Ladislav Kamenický has cited these European rules in defense of pursuing fiscal policies that prioritize short-term political gains while sidestepping necessary fiscal consolidations. This opens up a broader debate on how countries should balance immediate political pressures against long-term economic health.

The implications of such relaxed fiscal controls could be significant, not only for Slovakia's economic stability but also for its standing within the European Union, especially at a time when other member states are taking rigorous steps to ensure fiscal responsibility. Critics argue that failing to consolidate could lead to greater volatility in public finances and undermine investor confidence, which could ultimately affect overall economic growth in the region.

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