Slovakia Living Beyond Its Means, Major Social Spending Cuts Needed for Budget Consolidation, Economist Warns

Slovakia is living significantly beyond its economic means and the current government's fiscal consolidation approach is unsustainable because it stifles economic growth, according to Martin Šuster, an economist with the Council for Budget Responsibility. Šuster argues that the government's consolidation packages are choking the economy, which needs a restart that cannot be achieved through minor tax relief or contribution reductions alone. He contends that bringing public finances under control requires fundamental cuts to social spending, not just the elimination of thirteenth pensions. The Council for Budget Responsibility is Slovakia's independent fiscal watchdog that monitors government spending and debt sustainability. Šuster's warning comes as Slovakia grapples with high public debt and budget deficits, raising concerns about whether the country can avoid following Greece's path of severe fiscal crisis that required international bailouts over a decade ago.