Government Has Ambitious Consolidation Plan, says Miklos
BRATISLAVA, April 20, (WEBNOVINY) — After Cabinet ministers voted on Wednesday to give the go-ahead to the National Program of Reforms, Finance Minister Ivan Miklos said that the approved paper was one of the key documents of the incumbent government. According to him the government has set out an ambitious plan of consolidating the country’s public finances. “We consider it a principal issue. Without healthy public finances, without halting indebting next generations we cannot have a healthy economy,” stated the minister.
Earlier on Wednesday, the Cabinet has confirmed its plan to consolidate public finances and squeeze their deficit below the Maastricht criterion of 3 percent of GDP in 2013. The Finance Ministry confirmed this aim set already in the three-year general government budget in the approved National Program of Reforms. The biggest part of the planned consolidation of public finances should take place this year when the deficit should shrink from last year’s 7.78 percent of GDP to 4.9 percent.
Next year the deficit should narrow to 3.8 percent and should be at 2.9 percent on 2013. In the period after 2013, the objective is to continue in consolidation in order to gradually cut the share of gross debt of the general government on GDP and achieve a balanced budget in mid-term horizon. Fulfillment of the balanced budget goal is inevitable regarding long-term sustainability of public finances, which represents the basic goal of Slovakia’s fiscal policy, says the ministry in the reform program.
In line with the document, Slovakia’s public finances are to be guided by new, stricter rules in the near future. The Finance Ministry defined as one of the priorities a reform to enhance budgetary responsibility. “A significant tightening of the fiscal framework can increase Slovakia’s credibility on international markets and help a smoother consolidation of public funds,” the ministry expects. The reform of fiscal institutions contains six basic areas. The ministry wants to put more emphasis on the state’s net economic wealth, put a cap on the gross public debt or aggregate nominal expenditure limits. Changes should concern also the rules for self-governments‘ economic performance, or overall transparency of public funds, which should be supervised by an independent fiscal council.
SITA