Bloomberg News

Slovakia Needs 1 Billion Euros in Measures to Meet Budget Goals

July 30, 2012

Slovakia needs to cut spending and boost revenue by an additional 1 billion euros ($1.23 billion) to meet its goal for narrowing its budget deficit to the European Union’s limit by 2013, Prime Minister Robert Fico said.

The eastern euro-region’s member is missing 500 million euros to narrow the gap to the targeted 4.6 percent of gross domestic product this year after planned tax collection fell short, Fico said at a press conference in Bratislava today. The same amount must be mustered in 2013 for Slovakia to fulfill its commitment to the EU to trim the fiscal gap to below 3 percent of GDP.

To cover the 2012 shortfall, the administration will cut spending by ministries by 120 million euros, while 235 million euros will be raised by tax increases and special levies on selected industries, said Finance Minister Peter Kazimir. Another 40 million euros will be saved by moving forward a planned pension overhaul, leaving a need for unspecified measures worth 105 million euros, he said without elaborating on steps for the next year.

The second-poorest euro nation is striving to improve its public finances to protect itself from the region’s debt crisis, which has already prompted five nations to seek a bailout. Fico, in power since April, wants to balance the need for about 2 billion euros in austerity measures with his pre-election pledges to insulate most citizens from their impact.

To contact the reporter on this story: Radoslav Tomek in Bratislava at rtomek@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net


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