The
Slovak Spectator dňa 20.10. 2008 spomína spoločné
vyhlásenie 38 európskych think-tankov ohľadom globálnej finančnej krízy. Zo
slovenských organizácií sa pod vyhlásenie podpísali INESS – Inštitút
ekonomických a spoločenských analýz, Konzervatívny inštitút M.R. Štefánika a
Nadácia F.A. Hayeka.
STATE budgets are probably one of the
best snapshots of a government’s true face. The numbers often say more about
political priorities than impassioned speeches, party manifestoes packed with
utopian ideas or blacklists of public bogeymen. Far too often, promises are
blown away by the cold autumn wind as soon as the final talks over the state
budget near parliament.
Yet, the outcome of budget negotiations
often reveals the price tag for coalition partners’ loyalty. The public rarely
sees what is happening behind the closed doors: what is being traded, who is
getting what, and for how much in return.
Prime Minister Robert Fico has already
decorated his latest draft state budget with superlatives: the most
socially-oriented state budget, with the lowest possible deficit. Yet, this is
also the first euro budget that the government will have to follow after
joining the eurozone.
So what is Fico’s explanation for why
observers, market watchers and economists feel that there is something rotten
at the core of this budget? Fuelling their doubts is the impression that the
proposed budget is designed as if Slovakia is protected by a bulletproof shield
and can stroll through the crossfire of the ongoing global financial crisis
unscathed. Slovakia had not, as of October 16, revised its official forecast of
economic growth. The government has therefore drafted this budget based on the
expectation of 6.5 percent growth.
Fico has called on all the political
parties to turn the global financial crisis – which he compared to that of 1929
– and its potential impact into a principal issue. So it is puzzling why market
watchers are unable to detect any trace of concern or allowance for the crisis
in Fico’s ‘most socially-oriented budget of all time’.
The miracle budget assumes revenues of
€13.222 billion (Sk398 billion), expenditure of €14.109 billion (Sk425 billion)
and hence a deficit of €886.7 million (Sk26.7 billion). Compared with the
August draft, the projected deficit has swollen by nearly €390 million,
revenues by €193 million, and expenditures by €582.4 million.
And yet the Fico team is quite reluctant
to reveal where and how they will find the €582.4 million for extra spending to
quench the thirst of his partners in the ruling coalition while throwing enough
crumbs to the voters in order to feed them without making them realise how
hungry they are.
Yet, one potential well of money into
which Fico hopes to plunge the siphon, according to local media, is the
country’s pension system; specifically, the second or so-called capitalisation
pillar which allows contributors to pay into privately-managed funds. Earlier
this year, his government opened up the second pillar for six months, allowing
people to return to the publicly-managed scheme.
This was accompanied by a massive
campaign which involved comparing the pension fund management companies to
pyramid schemes and revealing a “secret” video featuring one of the top
managers of the funds dancing in a female wig, to pointing at the supposed dark
cloud of crisis hanging over the heads of the clients of the second pillar.
After, the government’s hoped-for mass exodus from the private schemes failed
to materialise, Fico said that the system would be re-opened, this time for
seven months.
Now Fico and his money managers hope
that at least 150,000 people will quit and channel their money into the budget
of the social security provider Sociálna Poisťovňa, which comes within the
state budget.
With this suspicion in mind it is rather
harder to believe in the government’s good intention to shelter people from
crisis. Though Fico swears it is really so.
On October 15, the prime minister said
that the pension pillar is to be opened because of the world crisis and not
because of the budget.
“If we wanted to, 800,000 or even a
million people would leave the second pillar,” said Fico, as quoted by the
Hospodárske Noviny financial daily.
This reveals two potentially disturbing
scenarios: that the Fico think government thinks it could do it; and that if it
is even toying with the idea, one possible motive could be to get more money to
spend for the ruling coalition.
On
October 15, thirty-eight European economic policy organisations and think-tanks
released a joint statement in response to the global financial crisis
suggesting that the basic cause of the problem was that governments engaged in
excessive credit expansion and pressured banks to make loans, particularly home
loans, to unqualified buyers.
Slovakia’s
INESS – the Institute of Economic and Social Analyses, the Conservative
Institute of M.R. Štefánik and the F.A. Hayek Foundation signed the statement.
In short, they believe, governments interfered in processes that should have
functioned based on the principle of non-intervention.
What else does the budget snapshot
reveals about the Fico government? It was adopted by the cabinet on October 15,
the very last day, according to the law, by which a draft must be sent to
parliament. In fact the main agreement about the budget was reached on October
14, at a meeting of coalition party leaders.
Fico made no secret of the fact that it
was indeed a deal between political parties and that there would be no
significant discussion at the cabinet session. Still, it is a sad prospect for
Slovakia when people like HZDS leader Vladimír Mečiar and SNS chairman Ján
Slota decide about state budgets in times of global financial crisis.
The
Slovak Spectator, 20 Oct 2008, Beata Balogová
