Fico: Neither National nor Local Governments Must Prepare Balanced Budgets

Bratislava/Presov, 28 July (TASR) - Neither the government nor local authorities are obliged to prepare balanced budgets for next year, Premier Robert Fico (Smer-SD) reiterated at a news conference in Presov on Tuesday, adding that he views this as "a resolved matter". Fico maintained that an exemption from debt-brake sanctions applies, as Slovakia's expenditures related to fulfilling its international agreements exceeds 3 percent of gross domestic product (GDP). Slovakia's public debt has been exceeding the highest debt-brake bands for some time. One of the strictest sanctions obliges the government to submit a balanced budget for the following year, with the same obligation applying to local governments as well. However, the law also provides for several exemptions from these sanctions. "We've already officially informed local governments that they don't have to prepare balanced budgets. We continue to rely on the exemption that states that if the country's expenditure on obligations arising from our membership of international organisations exceeds 3 percent, the obligation to prepare a balanced budget doesn't apply," said the premier. He doesn't think that local governments need any further guarantee that they won't have to draw up balanced budgets. He stressed that the figure concerning expenditure exceeding 3 percent of GDP was officially published by the Statistics Office. "We were waiting for the office's statement, and the office has published it. We therefore consider the law to be in force, and this law now allows both the government and local authorities to prepare their budgets as they normally would, meaning with deficits," added Fico. Representatives of local government associations have been declaring for a long time that they need specific guidance from the Finance Ministry on preparing budgets for next year and that political statements regarding compliance with the debt-brake rules aren't sufficient. At the same time, they are also calling for local governments to be fully exempted from the sanction mechanisms set out in the constitutional law on budgetary responsibility, arguing that they didn't cause Slovakia's high debt and that they have their own strict financial management rules. ko/df