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 Prešov 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.
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.
Source: TASR
