Fico's march to a socially-oriented state (The Slovak Spectator)

Nárast sociálnych dávok, ktorý nie je adresný na
ľudí v núdzi je len ďalším plytvaním verejnými zdrojmi a vytvára
inflačné tlaky, povedal pre The Slovak Spectator okrem iného v súvislosti
s budovaním sociálneho štátu na Slovensku Radovan Ďurana z INESS.

Fico's march to a socially-oriented state (The Slovak Spectator)

THE TIME has come for a “very serious return” to a socially-oriented state
in Slovakia, Slovak Prime Minister Robert Fico declared as he shared his vision
of how the government intends to use the second half of its term in office. The
Fico team promises more subsidies, more stability in the pension system and
some clean-ups within state institutions, which it says could save money and
allow greater state generosity via social programmes.

While Fico’s minister of labour and social affairs, Viera Tomanová, fully
identifies with the prime minister’s vision of a socially-oriented state, the
opposition and observers remain rather sceptical about the government’s
potential to turn what Fico has promised into reality.

"The social aspect is absolutely crucial for us,” the prime minister
told media on June 25 as he concluded his mid-term round of inspections at
government ministries with a visit to the Labour Ministry. Fico said his visit
to the Labour Ministry had been left as the climax of his departmental
inspections as a reflection of how significant social policy is to his
government’s agenda, stating “Today Slovakia is much closer to a
socially-oriented state than the country was when we took over the ministry.”

However, the prime minister has repeatedly said that the return to what he
calls a more socially-just society should not be financed through raising taxes
or by deepening the public finance deficit. Instead, ministries should operate
more economically, he said.

Fico in early June tasked the Finance Ministry to help the government to
pursue its social policies based on the improved performance of the economy and
stable public finances. However, for Fico the Labour Ministry is of strategic
importance for achieving his goal.

“This [labour] ministry is the stronghold of the social policies of this
government,” Fico said on June 25.

The ministry, under Tomanová’s management, has revised the Labour Code,
making it kinder to employees and stricter towards employers, and has also
altered reforms of the country’s pension system initiated by the previous government,
which had given people the option of saving for their pensions with private
pension funds.

Over the past couple of months, in particular fuelled by the resignation of
Health Minister Ivan Valentovič, local media has been speculating about whether
Tomanová is about to be replaced.

However, on June 25, Fico rejected the speculation and said that the
minister has his full support.
According to the prime minister, Tomanová’s ministry had prepared a package of
measures to fight both the potential negative impact of euro adoption on
socially vulnerable groups and the effects of the rise in world food prices.
The ruling coalition has also been talking about increasing the one-off subsidy
for first-born children, as well as advantageous loans for newly-married
couples and Christmas bonuses for pensioners.

Eugen Jurzyca, director of the Institute for Economic and Social Reforms
(INEKO), said that Fico’s statements on building a socially-oriented state are
similar to many other statements he has made.

“The probability of Robert Fico giving Slovakia the character of a social
state is [now] the same as if he had not said anything at all,” Jurzyca told
The Slovak Spectator.

If, for example, the system of public procurement improves, the social
system gets more transparent, and the business environment is refined, poverty
would certainly drop in Slovakia and there would be more funds for old-age
pensions, for example, Jurzyca said.

“However, in terms of legislation, the government has so far proceeded
either in the opposite direction or - in the better cases - it has simply not
worsened existing situation,” Jurzyca added.

What is fundamental, though, according
to Radovan Ďurana of the Institute of Economic and Social Studies (INESS), is
that any increase of subsidies which is not targeted at those who are really in
need is ultimately a waste of funds which will create inflationary pressure.

As for Fico’s plans to obtain funds
through savings and reductions, Ďurana said he has not yet observed any
encouraging trend in the Fico government’s behaviour.

“Despite the heralded lay-off of
employees and cancellation of some state administration offices, the government
has so far not managed to halt the annual increase in wage expenses,” Ďurana
told The Slovak Spectator. “Over the past two years the government has saved
only a minimal amount of funds; this is why we remain sceptical about
statements regarding savings in upcoming years.”

As for the half-time verdict on the current government’s performance,
Jurzyca said it is to its credit that the government has not reverted basic
economic reforms.

“Professionally, this was not much of an achievement, but in fact
politically it was,” Jurzyca said. “However, the government is not continuing
to improve the business environment, which is a precondition for the mid-term
sustainability of economic growth at the very least.”

Ďurana agrees that the government
under the management of Smer has not yet adopted laws which have fundamentally
affected the economy.

However some minor shifts can be
sensed already, such as making the Labour Code more severe, the ban on health
insurers from making a profit, the speeded-up process of property expropriation
or a fee for electricity exports, said Ďurana.

According to Jurzyca, the government has not fundamentally reformed the
healthcare, education or pension systems, or shaken up science, sport and
culture, even though these departments have been in urgent need of change.

“I consider what the most popular politicians have been doing to be a sort
of counter-enlightenment,” Jurzyca told The Slovak Spectator. “If, in the long
run, they keep repeating that traders, bankers, managers and wealthy people are
to blame for high prices; if they ridicule the representatives of the
neighbouring state; if they say that the worst thing about problems is that
they are publicised; then after a certain time, a critical mass of Slovak
voters will end up with misguided beliefs about how Slovakia needs to be

Petra Šrámková contributed to this

Slovak Spectator, 30.6. 2008, Beata Balogová

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