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Slovak Cabinet Backs 2013 Budget That Meets EU’s Deficit Limit

Slovakia’s government approved the 2013 budget, meeting Prime Minister Robert Fico’s pledge to trim the fiscal gap below the European Union limit.

The plan, which has yet to be approved by parliament, targets a deficit of 2.94 percent of gross domestic product, below the EU’s 3 percent ceiling, Finance Minister Peter Kazimir said after today’s Cabinet meeting in the Slovak capital, Bratislava. The goal compares with a planned shortfall of 4.6 percent of GDP this year.

Slovakia, a euro-area member since 2009, is striving to improve its public finances even as the slowing economy is reducing tax receipts to prevent contagion from the bloc’s sovereign-debt crisis. Fico’s administration has cut spending and pushed through a series of measures such as a pension overhaul and tax increases to boost revenue.

“This is a realistic budget, which is based on Slovakia’s possibilities,” Fico told reporters. “It’s a budget that guarantees Slovakia’s place in the core of the euro zone.”

The budget is based on an assumption of economic growth slowing to 2.1 percent from 2.5 percent expected this year. The central-government balance is projected with a deficit of 2.75 billion euros ($3.54 billion) and includes about 500 million- euro in reserves, should the economy grow at a slower pace than estimated.

To contact the reporter on this story: Radoslav Tomek in Bratislava at rtomek@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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