Slovakia’s new caretaker government will end the blanket support the previous executive greenlighted to help crisis-stricken households during the pandemic and the energy crisis and shift towards more targeted support, the caretaker government’s new strategic document reads.
Following the collapse of the cabinet of now former prime minister Eduard Heger, President Zuzana Čaputová appointed the caretaker government of Ľudovít Ódor, which only just agreed to a programme statement that will apply until a new government is elected in September’s snap elections.
“Instead of targeted assistance to those who really need it, blanket solutions dominated. And we cannot afford these in the long term in our current budgetary situation,” writes the government of Ľudovít Ódor, a former central banker.
The same day, the government decided to limit compensations for companies with 2023 contracts, which include decided market prices, with the Finance Ministry confirming it instead wants to redirect more aid to the poorest households.
For instance, it noted that energy costs amount to 184% of their budget, whereas for rich households, the costs are at 8.7%.
The move was criticised by former investment minister Veronika Remišová, who said that limiting help to certain households would be “bureaucratic hell”.
However, the policy follows a European Commission recommendation presented at the latest European Semester. It said that all member states should “wind down” energy support measures by the end of 2023.
The Commission calculated that Slovakia’s energy bill measures accounted for 0.2% of the country’s 2022 GDP and mainly comprised electricity and gas price caps. Slovakia also pleaded for a chance to use unspent EU cohesion funds for energy aid, which were at risk of being lost. It was allowed to use up to €1.45 billion for this cause.
However, according to Bruegel calculations, the overall inflation aid, including a massive €1 billion “family package” of tax breaks, subsidies and child allowances, amounted to the highest percentage in the EU when considering GDP per capita.
Ódor’s government is now expected to ask for parliament’s confidence, giving them the same powers as Heger’s government.
(Barbara Zmušková | EURACTIV.sk)
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