Pellegrini to Decide on Budget Rules Amendment Based on Expert Arguments
Bratislava, 14 October (TASR) – President Peter Pellegrini met Finance Minister Ladislav Kamenicky (Smer-SD) and his colleagues on Wednesday to discuss the reasons behind the amendment to the Budgetary Rules Act.
The amendment, recently approved by Parliament, changes certain rules governing provisional budget arrangements.
"Based on this information and the expert arguments presented in support of the amendment, the president will decide within the constitutional deadline whether to sign the law," the President's Office's press department told TASR on the same day.
Following the meeting, Kamenicky confirmed that he and his colleagues explained the situation surrounding the legislation to the president.
"Any situation that might arise under the current provisional budget arrangements would cause serious problems for the functioning of the Slovak Republic. There were significant restrictions, and we've adjusted them somewhat to ensure that the country can function normally," said Kamenicky.
He added that a deadlock arising from an early election or another political crisis, although not currently a risk following the adoption of the budget, could seriously threaten the functioning of the state.
"We can't afford that. The president listened to our views and said that he understood the situation. Naturally, he wanted us to explain it to him in person," said the minister.
The meeting also addressed a pending submission by the opposition to the Constitutional Court concerning the Fiscal Responsibility Act.
"If, for example, someone were to demand a balanced budget, calculations by the Finance Ministry show that the Slovak economy would be plunged into a deep recession," warned Kamenicky, adding that economic output would fall by 3.7 percent.
According to the minister, unemployment could rise to 9 percent, while 120,000 jobs would be lost, representing a 4.4-percent decline in employment.
"A balanced budget would mean cuts of €7.5 billion, equivalent to half the budget of social-insurer SP," stated Kamenicky.
He added that tax revenues would fall by approximately €6 billion. He described this as a catastrophic scenario that the government couldn't allow to happen. The minister said that analyses are being prepared to assess the potential consequences of a balanced budget.
"After two years, we had reached a situation in which the Slovak Republic was outside all sanction thresholds, [where it had got] thanks to the governments of Igor Matovic, Eduard Heger and Ludovit Odor. Today, we're dealing with a situation in which the Constitution effectively requires us to jump into a well. I reject that," said the finance minister.
He argued that the assessment must take account not only of the provisions of the Fiscal Responsibility Act but also of the Constitution as a whole.
"That means ensuring that the state can continue to function normally in social and economic terms," added Kamenicky.
