Slovakia Nears Deals of Up to 1 Billion Euros in FDI, Fico Says

  • Fico sees some investment projects announced in `coming days'
  • Premier vows more social spending, balanced budget in 2018

Slovakia’s government is finishing talks on foreign investment projects worth as much as 1 billion euros ($1.1 billion), which will allow the eastern euro-area member to boost growth and help cover the costs of increased social spending, Premier Robert Fico said.

Announcements on some of the projects will happen “in the coming days,” Fico said in an interview Tuesday in the capital Bratislava. The 51-year old former lawyer, who’s seeking his third term as prime minister in March 5 general elections, said keeping Slovakia among the European Union’s fastest-growing countries is his priority.

“We will fight for every investment -- I care a lot that Slovakia excels in economic growth,” Fico said in the government office. “I believe that with effective tax collection and savings, such as on public administration, we can generate hundreds of millions of euros for new social measures.”

Accelerating growth is allowing Fico’s administration to pursue pledges to both improve living standards for the poor and continue reducing the budget deficit. Fico, who’s party holds a strong but declining lead in opinion polls, said that if he’s re-elected, his third cabinet will maintain fiscal prudence and keep the goal of balancing the budget in 2018.

Slovakia’s borrowing costs have become the euro area’s third-lowest after triple-A-rated Germany and the Netherlands. The country’s benchmark 2025 bond yielded 0.496 percent, one basis point up from an all-time low on Monday.

Falling Popularity

The economy grew 4.2 percent from a year ago in the fourth quarter, the fastest pace in five years. The expansion is set to accelerate to 4.6 percent in 2019 after a 1.4 billion-euro factory that Jaguar Land Rover is building in the city of Nitra, east of the capital, becomes fully operational, the Finance Ministry forecasts.

Still, accelerating growth and unemployment that has dropped to an almost 7-year low hasn’t prevented the popularity of Fico’s Smer party from slipping in recent months. While it currently holds enough seats in parliament to rule alone, voter surveys show it will need a partner to form a government after the election. Fico said Smer is open to working with any party, as long as they agree on key issues including a tough stance on refugees and support for more social measures.

“The model of fast growth and prudent public finances has shown to be a success,” Fico said. “We are a leftist party, so we want to pursue more social programs, but not at the expense of widening the deficit or public debt.”

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