While Prime Minister Robert Fico’s government says the nation’s budget deficit will fall from 6.5% last year to 6% this year, the EU Commission forecast has reported that the deficit will increase to 6.3% from last year’s 6.1%.
The EU Commission reported that the main difference lies in accounting expenses for energy aid paid from EU funds, Denník N reported.
“This difference results in a lower estimate of the general government deficit by 0.4% of GDP in 2023 and a higher deficit by 0.3% in 2024 in the Commission forecast compared to the Draft Budgetary Plan for 2024,” the report reads.
It confirms the Budget Council’s view that they should be fully accounted for by 2023 and not also by 2024, as the Slovak Finance Ministry claims.
Slovak Finance Minister Ladislav Kamenický reacted that the ministry and the European Commission continue to have different views on energy aid and the accounting of EU funds.
However, according to him, the good news is that Brussels “approved” the Slovak budget.
The EU Commission also reminded that Slovakia has not ended the widespread subsidisation of energy prices, despite its recommendations. The volume of subsidies is only set to decrease from last year’s 1.9% of GDP to 0.8%.
In December 2023, the Economy Ministry announced Slovakia would spend €1.25 billion on energy aid next year to prevent a 20% increase in household electricity charges.
The Slovak opposition criticises the step and frames the continuation of this aid as government marketing within the context of the upcoming Slovak presidential elections, scheduled for March and April 2024. Peter Pellegrini, the leader of the second-largest governing coalition party (Hlas-SD) and the head of the National Council, is expected to announce his candidacy for the post on Friday.
At the same time, the EU executive warned Slovakia of its plans to reduce the contribution to the second pillar (from 5.5% to 4%) within its pension system.
The country runs its pension based on three pillars: receiving old-age pension from the mandatory pension insurance, old-age pension saving or voluntary supplementary pension saving system.
According to the EU Commission’s report, the reduction in the saving pillar does not contribute to the sustainability of the Slovak pension system in the long term.
(Natália Silenská | Euractiv.sk)
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