ZMOS Expects FinMin to Issue Written Guideline after Fico's Claims on Debt Brake

Bratislava, 27 May (TASR) - The Slovak Towns and Villages Association (ZMOS) respects the statements made by Prime Minister Robert Fico (Smer-SD) about local governments not being subject to debt brake restrictions when drawing up their budgets, but ZMOS will need a written guideline to that effect from the Finance Ministry, stated ZMOS chair Jozef Bozik after the association's 38th congress, which ended on Wednesday, adding that this was one of its conclusions. "We want the Finance Ministry to clearly state in writing that it has found a legal loophole and that local governments won't be penalised or face issues when drawing up budgets for the upcoming period," stated Bozik. He pointed out that the applicable wording of the Constitutional Act on Budgetary Responsibility and its penalty mechanism requires local governments to approve balanced budgets. If local governments are not exempt from this mechanism, they wouldn't be able to take out loans or use their reserve funds for expenditures, if necessary. "If the Finance Ministry states in writing that local governments will not be penalised because a legal solution has been found, we'll respect that. The constitutional act will need to be amended for the future, however," warned Bozik, adding that "if it's not changed, towns and villages would face unprecedented cuts". He also said that ZMOS bodies, including the congress, voted on and approved ZMOS's course of action during negotiations on setting up the new EU programme period and on the possibilities for local governments to draw EU funds. "During the discussion, we want to bring a requirement to the table, namely that of the total volume of funds currently standing at some €18 or €19 billion, 30 percent will be implemented directly in the territories of local governments via municipal and regional projects," stated Bozik. The goal is to ensure that local governments will be able to spend a higher volume of funds than in the current programme period. The amendment to the Constitutional Act on Budgetary Responsibility was also addressed by speakers at the start of the congress on Tuesday (26 May). While ZMOS representatives called for a change to the constitutional law, Fico stated in a video address to the delegates that the government doesn't intend to submit such a draft amendment due to circumstances according to which there's no obligation to submit balanced budgets in the wording of the law. Other heavily discussed topics at the congress included the setting of the new programme period and the involvement of local governments in decisions regarding new EU funds. jrg/df