Slovakia must slash its budget by 144 billion crowns, but Fico is stalling

Slovakia's government under Prime Minister Robert Fico is required to present parliament with a deficit-free budget proposal within the coming weeks — a mandate set out in the constitutional law on budgetary responsibility after national debt breached a critical threshold. The cuts needed amount to nearly six billion euros, or roughly 144 billion crowns, yet the cabinet has still not disclosed a detailed plan and is even weighing the option of simply ignoring the legal requirement altogether.

Back in May, Fico himself described such measures as "the final collapse of the welfare state" and "the collapse of the state as such," dismissing a balanced budget as "fantasy." Nevertheless, it is precisely such a document he must now submit to parliament in the near future.

The two-year grace period has run out

Under the rules, every new government is granted a two-year immunity from the harshest sanctions of the debt brake mechanism after taking office, so it isn't held accountable for its predecessors' missteps. For Fico's fourth cabinet, that grace period expired last November — and even then, the prime minister knew the sanctions were unavoidable. Yet the finance ministry still hasn't produced next year's budget proposal, even though the ruling Smer party had hoped to put it to a vote back in September.

The situation is further complicated by discord within the ruling coalition: the junior partner, the SNS party, is demanding the resignation of Environment Minister Tomáš Taraba, who would then return to parliament as an MP — and whose vote could prove decisive for a government clinging to a razor-thin majority of just 78 seats.

Previous attempts have already failed

Slovak authorities have twice tried to balance the budget, and both attempts fell short. In 2018, Prime Minister Peter Pellegrini proudly declared that the country would stop piling debt onto future generations — yet by year's end, instead of zero, the deficit came in at 2.2 billion euros (around 53 billion crowns). In 2023, the caretaker government of Ľudovít Ódor submitted a similar proposal with little real chance of being fulfilled — the finance minister at the time actually recommended parliament reject it.

Slovakia's deficit has now officially reached 61.4% of GDP, triggering the top-tier sanctions under the budgetary responsibility law. Over the summer, the government failed to produce a detailed line-item budget plan — Fico has only outlined priorities for next year: combating drought, and developing transport infrastructure and nuclear energy. Finance Minister Ladislav Kamenický admitted the sums involved run into hundreds of millions of euros, which are extremely difficult to squeeze into an already strained budget.

A dispute over the defence-spending "loophole"

Fico is looking for a way around the legal requirement by invoking what's known as the escape clause: if spending tied to membership in international organizations exceeds a certain threshold, the government is exempt from sanctions. The prime minister argues that Slovakia has spent three percent of GDP on defence over the past year, and that this can be classified as extraordinary expenditure.

The Council for Budget Responsibility disputes this interpretation, saying it has no figures to back up the government's position. Former Constitutional Court chairman Ján Mazák called Fico's argument "a blatant manipulation of the law's interpretation" and expressed doubt the government could defend such a position before the Constitutional Court. According to the council, the law's exception applies to unforeseen spending increases within a given year — not to defence expenditures planned well in advance.

Fico has already dragged his feet on another obligation — requesting a vote of confidence from parliament, which he was supposed to do back in November of last year but only carried out in June, following a Constitutional Court ruling. If the deficit can't be brought down, the government will have to request a confidence vote again in January next year. Last week, the Council for Budget Responsibility reported that without additional measures, this year's deficit will reach 4.4% of GDP, or 6.2 billion euros (around 149 billion crowns).

Source: seznamzpravy.cz