Democrats: Savers Have Better Choice of Investments than Government Bonds

Bratislava, May 2 (TASR) - If citizens would like to invest their pension savings, they can choose index or stock funds, where the interest rates are much higher than can be expected with government bonds, the extra-parliamentary 'Democrats' party said in reaction to Premier Robert Fico's (Smer-SD) intention to offer government bonds to pension savers and use the money to invest in highway construction. "Robert Fico's plan with government bonds means nothing but a loan to the state. The government wants to borrow money from the common people, as the markets do not trust it and increase the risk premium on government loans," said the Democrats. Finance Ministry's former state secretary Lubos Jancik stressed that the government must be interested in having the lowest possible interest rates on government bonds, while savers are interested in pension fund management companies providing them with as high as possible yields on their money. "Therefore, highway bonds or bonds for the people are economic nonsense from this viewpoint," he said. According to Jancik, it is correct if pension fund management companies invest savers' money where they bring the highest yields while respecting the security of these investments. Therefore, it doesn't matter in which part of the world they are invested, whether it is in the USA, Germany or France, he added. The party rejected claims that the second pension pillar isn't advantageous. It claims that the profitability of the second pillar is close to 10 percent p.a. If the interest rate on government bonds was 4 or 5 percent, it would be a lower yield for people and high interest for the state, said Democrats. Slovakia currently borrows money on the global financial market at less than 4 percent p.a. ko/mcs