PS: Consolidation Will Dampen Economy, KDH Slams Unclear State Austerity

Bratislava, 9 September (TASR) - The new package of measures to consolidate public finances presented by Finance Minister Ladislav Kamenicky (Smer-SD) in the amount of €2.7 billion will significantly dampen the economy and threaten to plunge Slovakia into recession, the opposition Progressive Slovakia (PS) party stated on Tuesday, adding that a large part of the measures increases the taxation of economic activity. The opposition Christian Democrats (KDH) also criticise the lack of specific measures in savings on the part of the state as well as the spending of EU funds on energy subsidies. The progressives lack pro-growth measures that would help boost the performance of the economy and bring more money into the state budget. "There's a real threat that Laco Kamenicky and this bunch will drag us into an economic recession and that means poverty. We already have over a million people in Slovakia, people at risk of poverty, that number is rising in tens of thousands, and that is the result of this government," said PS chair Michal Simecka. The measures include, among others, a one percentage point increase in employee health levies, an increase in taxation of high-income earners and an increase in social levies for sole traders. Further measures, such as increasing the value added tax rate on foods with higher sugar and salt content, will further increase food prices, according to PS. MP Jozef Hajko (KDH) pointed out that of the announced €1.14 billion to be saved by ministries and offices, €430 million is for energy assistance, which should be paid from the EU funds. "The €700 million that the government promises to save on itself is still in the clouds," stressed Hajko. Minister Kamenicky hasn't yet specified specific savings options, but at the press conference he claimed that individual ministries are to deliver specific figures to him by the end of this week. At a press conference on Tuesday Kamenicky announced that the package of consolidation measures for next year will include 22 measures totalling €2.7 billion. Almost half of the amount, €1.3 billion, should be obtained by savings on state spending. The result should be a reduction in the general government deficit and a gradual stabilisation of public debt. am