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Tuesday, June 20, 2006

Slovakia To Go Backwards

Unfortunately the new government of Slovakia is poised to undo much of the good work done by its predesessor.

Fico (Likely Prime Minister) has already pledged to scrap one of the key pieces of legislation introduced by Dzurinda’s government – a 19 per cent flat tax – which, along with low wage levels, has been credited with generating the high economic growth.
This just goes to show that we cannot count on the new members from the east to support liberal economic policies.


AntiCitizenOne said...

It will be a good lesson to show that when you punish financial success you get less investment and thus extort less tax.

Serf said...

True, and the Slovakians have only themselves to blame.

Anonymous said...

But they'll likely spin it or rely on a global upswing in markets as happened in a Western European nation...

Do a straw-poll and ask people whether Brown's been good for the economy.

Anonymous said...

Well i think a little bit of balance is called for here.

Robert Fico, the leader of Smer and likely successor to Dzurinda said that the Slovak people had shown their anger at EU-friendly policies that led to rapid economic growth without concern for their social impact.

“Fast economic growth will no longer be for the benefit of a narrow group of people,” he told reporters after Sunday’s vote.

“I will steer the country back to human dignity and towards a sense of social justice.”

Slovak unemployment levels are extremely high, topping 16 per cent last year, and many Slovaks believe they were better off under communism, according to a recent poll.

Although the growth is improving the situation in the country , being frisked for money when going into a hospital in pain (a Dzurinda reform) or multimillionaires paying only 19% tax, is plain stupid.

Neither the US nor the UK have such low taxes, I pay 40% tax in the UK plus all the otehr indirect taxes (in effect half my income goes to the government) and this has been like this forever in the UK...

A few years of Fico will probably get the development of Slovakia in a sustainable path, particularly if Fico keeps the corruption in his party to a minimum.

His promises to emulate Blair but a bit more to the left sound the right thing to do for Slovakia. I would have prefered Fico plus KDH and SMK, but it seems that this posting is rather ill-informed.
You cannot judge the politics and economics of another country based on western european norms. Slovakia needed to go a tad to the left.