April 26, 2016 / 6:50 PM / 3 years ago

New Slovak government wins confidence vote in parliament

Bratislava (Reuters) - Slovakia’s newly formed government won a parliamentary confidence vote on Tuesday as the legislature approved its program manifesto including a relaxation of budget targets and moderate cuts in taxes for companies and small businessmen.

Slovakia's Prime Minister and leader of Smer party Robert Fico leaves after a live broadcast of a debate after the country's parliamentary election, in Bratislava, Slovakia, in this March 6, 2016 file photo. REUTERS/David W Cerny/Files

The cabinet, led by incumbent Prime Minister Robert Fico, is made up by four center and center parties, an arrangement forced by an inconclusive March election and a threat of instability ahead of the country’s European Union presidency in the second half of this year.

The government plans to achieve a balanced budget by the end of its term in 2020, two years later than previously planned for the euro zone country but still in line with the currency club’s rules. This year’s deficit is expected to drop to 1.93 percent of gross domestic product from last year’s 3.0 percent, a goal called unrealistic by a budget watchdog.

“The government has missed its budget target for the second consecutive year and without additional measures this year’s goal is not anywhere in sight, the Council for Budget Responsibility said last week.

The parliament voted 79 to 61 to support the cabinet. Fico himself was absent, as he was recovering form heart surgery he had last Friday. His coalition partner, head of parliament Andrej Danko, also missed the vote, having had a stomach surgery on Monday. Both are expected to make full recovery.

The coalition plans to cut the income tax for corporates and small entrepreneurs by 1 percentage point to 21 percent as of next year and consider further cuts later.

It will keep in place a special tax on banks and utilities, and plans a special levy on big retail chains and insurance companies, the program said without giving details.

The government has also agreed to tackle shortcomings in healthcare and education and increase transparency in public spending after corruption scandals that cost Fico’s center Smer the outright majority it had held for the previous four years.

Deputy Prime Minister Peter Pellegrini stood in for Fico to present the new government’s agenda to lawmakers last week.

Slovakia will hold the EU’s rotating presidency in the second half of 2016, giving it a stronger voice in setting the EU agenda, including Europe’s migration crisis and the aftermath of a June 23 British referendum on whether to stay in the bloc.

The program said the NATO member country — which had kept an ear open for the views of Russia under Fico’s previous rule — said it would maintain a pro-Western focus in its foreign policy amid what it called dramatically changing conditions abroad.

Reporting By Tatiana Jancarikova; editing by Ralph Boulton

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