The Report on Compliance with the Fiscal Responsibility and Fiscal Transparency Rules annually assesses, by 31 August, compliance with the rules arising from the constitutional Fiscal Responsibility Act^[1] in the preceding year. The assessment also takes into account events occurring in the current year up to the report’s cut-off date, if they are relevant to assessing compliance with the rules or to the completeness of the assessment. The report focuses in particular on the development of the long-term sustainability of public finances, compliance with the debt limit and the public expenditure ceiling, the rules applicable to local government, and compliance with fiscal transparency requirements.

Long-term sustainability of public finances

The key objective of the fiscal responsibility rules is to ensure the long-term sustainability of public finances. Safeguarding the long-term sustainability of Slovakia’s public finances, with due regard to the principles of transparency and efficiency in the use of public funds, is enshrined in the Constitution of the Slovak Republic[2].

In its evaluation[3], the Council for Budget Responsibility (CBR, or Slovak abbreviation RRZ) concluded that the long-term sustainability of public finances was not achieved in 2025. Under a no-policy-change scenario, the long-term sustainability indicator reached 5.5% of GDP, placing public finances in the high-risk zone. Despite completing three rounds of consolidation measures, the indicator did not improve significantly. Its development was adversely affected by a less favourable macroeconomic environment. A more substantial improvement was also impeded by the inappropriate composition of the consolidation packages, which weakened the economy’s competitiveness[4], the adoption of new expenditure measures, and the temporary nature of some consolidation measures.

Without additional consolidation measures, the CBR estimates[5] that the deficit will increase from 4.4% of GDP in 2026 to 5.7% of GDP in 2029. Rising interest expenditure, higher defence spending and new expenditure policies are contributing to the worsening of the balance. From 2028 onwards, the expiry of temporarily increased taxes and social contributions will also have an effect. Under this scenario, gross debt would increase by 12.6 percentage points, from 61.4% of GDP at the end of 2025 to 74.0% of GDP in 2029.

Rising debt not only worsens the long-term sustainability of public finances, but also reduces their capacity to absorb unexpected shocks[6]. According to CBR estimates, the safe level of gross debt for Slovakia does not exceed 50% of GDP and, as a result of population ageing, will decline further towards 40% of GDP in the coming decades. At 61.4% of GDP, debt is therefore already above the safe range. Slovakia’s fiscal space for absorbing adverse shocks has been exhausted and its public finances are in the fiscal-stress zone. Whereas Slovakia was able to respond to past crises partly by using the fiscal space available at the time, its current absence means that even ordinary shocks may, because of the need to stabilise debt, lead to the adoption of procyclical measures with an adverse impact on households’ living standards and the economy as a whole. At the same time, Slovakia’s vulnerability to further shocks is increasing substantially. This will initially be reflected in higher financing costs, including through a higher risk premium.

Given the persistently poor state of public finances, the government should present further ambitious measures to improve their sustainability as soon as possible. In spring of 2026[7], the government significantly relaxed its own budgetary objectives and currently plans a deficit of 4.2% of GDP in 2027, followed by only a marginal reduction to 4.1% of GDP in 2028[8]. It has thus postponed reducing the deficit below 3% of GDP and stabilising debt, as required both by the government manifesto and the European fiscal rules, until after the current electoral term.

Even meeting these substantially relaxed objectives will, according to the CBR, require measures amounting to €1.2 billion (0.9% of GDP) in the 2027 election year and a further €1.0 billion (0.5% of GDP) in 2028. If the government were to meet its 2027 objective through measures that permanently improve the general government balance, the long-term sustainability indicator could move to a level between the medium- and high-risk zones[9].

Postponing consolidation without a clear strategy increases both costs and uncertainty. Persistently high deficits will increase debt and interest expenditure, while the absence of a credible medium-term plan of permanent measures reduces the predictability of fiscal policy and creates risks and uncertainty that weaken the incentives of firms and households to invest. The longer consolidation is postponed, the deeper will public finances move into the fiscal-stress zone and the less room the country will have to protect the economy and households during the next crisis. Adverse shocks are not exceptional: the pandemic, the energy and inflation crises, and the geopolitical tensions of the past decade confirm that they should be regarded as the norm. In an extreme case, the absence of a timely and systematic response could even lead to a loss of Slovakia’s fiscal sovereignty – a situation in which fiscal policy is effectively constrained by financial-market or external-financing conditions.

Formal compliance with insufficiently stringent European rules does not guarantee sound public finances. If the entire scope for net expenditure growth under the binding European trajectory were used, the deficit could reach as much as 5.4% of GDP and gross debt 73.3% of GDP in 2028. At the same time, the European expenditure rule could remain formally complied with until 2028 even if consolidation did not continue. The CBR has therefore long warned of the inappropriate calibration of the European rule for Slovakia and to the need for a substantially more ambitious domestic consolidation plan.

Fiscal responsibility rules

Safeguarding long-term sustainability is a constitutional value that all public authorities are required to protect. A fiscal position that is unsustainable in the long term may in future jeopardise the state’s ability to ensure the proper protection of fundamental rights, especially those whose protection depends on public finances[10].

To safeguard this constitutional value, the constitutional act lays down fiscal responsibility rules. Expenditure ceilings should be the main operational and countercyclical instrument of budget management. The general government debt limit, the so-called debt brake, is an ultimate corrective mechanism intended to prevent debt from remaining at excessive levels over the long term. However, several CBR recommendations to strengthen these rules have remained unimplemented for a prolonged period.

According to the intention of the authors of the constitutional act, measures associated with exceeding the sanction brackets were to reduce debt to a safe level. However, practice to this date shows that successive governments have repeatedly circumvented the obligations arising from the debt-brake sanction brackets, complied with them only formally, or failed to comply with them altogether[11]. Such conduct weakens the corrective function of the debt brake and disregards the purpose of the constitutional act, namely to achieve the long-term sustainability of the Slovak Republic’s public finances. The government’s current fiscal strategy likewise fails to create the conditions either for stabilising debt or for fulfilling the fundamental purpose of the constitutional act.

After more than a decade of the constitutional act being in force, sufficient evidence is available on how the individual rules operate and are applied in practice. The current level of debt, combined with a worsened economic outlook, also highlights the need for corrective mechanisms to operate in a timely and gradual manner and to avoid the need for sudden, large-scale fiscal-policy interventions. These circumstances do not, however, in any way justify the approach taken to date by governments and parliament towards compliance with the constitutional principles and fiscal responsibility rules. Their inconsistent application has itself been one of the main causes of the deterioration in public finances. The essential prerequisite for effectively safeguarding long-term sustainability is therefore, above all, a change in the approach of governments and parliament to the fiscal responsibility rules. Weakening the effect of the rules in force is not the solution.

In the current situation, the CBR encourages the amendment of the constitutional act. The amendment should build on the act’s original objectives and intentions and supplement the existing framework with elements enabling more effective management of public finances with a smaller potential adverse impact on the economy. A key element should be to re-link the national public expenditure ceiling to the long-term sustainability indicator, as under the original national framework in force until 31 July 2024. Such a reform requires broad political consensus. However, neither clarifying the act nor tightening sanctions will suffice without a clear and verifiable mechanism ensuring that the relevant obligations are fulfilled properly and on time.

General government debt limit

The debt-to-GDP ratio remained in the highest, fifth sanction bracket[12] of the debt-brake mechanism in 2024 and 2025. Based on data published by Eurostat in October 2025, debt stood at 59.7% of GDP at the end of 2024, while according to preliminary data[13] released in April 2026 it reached 61.4% of GDP at the end of 2025.

As the 24-month exemption from the application of the stricter sanctions under the constitutional act[14] expired on 22 November 2025, until and including 22 November 2025, the debt level recorded for 2024 was subject to the sanctions triggered by exceeding the first and second sanction brackets under the constitutional Fiscal Responsibility Act, while from 23 November 2025 it was subject to the sanctions triggered by exceeding all five sanction brackets under the constitutional Fiscal Responsibility Act[15] (Table 1).

The debt level in 2025 is associated with the sanctions triggered by exceeding all five sanction brackets under the constitutional Fiscal Responsibility Act (Table 2). The debt level will be confirmed in October 2026, while compliance with some sanctions can only be assessed after the end of 2026.

Although general government gross debt has remained continuously in the highest debt-brake sanction bracket since 2020, application of the sanctions in recent years has often remained merely formal[16] and has had only a minimal effect on reducing debt. In some cases, the government failed to comply with its statutory obligations or acted in a manner that circumvented the purpose of the constitutional act:

• In 2025, and so far in 2026, the government did not submit a proposal for measures to reduce the debt to the National Council of the Slovak Republic. The government should have submitted the proposal without undue delay[17] after the debt level was published in April. As it failed to do so, the unlawful situation persists.
• The government did not ask the National Council of the Slovak Republic for a vote of confidence without delay. The exemption from the strictest sanctions ended on 22 November 2025, and the government should therefore have asked for a vote of confidence immediately after that date. It did so only on 17 June 2026, almost seven months later and on the day the judgment of the Constitutional Court of the Slovak Republic was adopted[18]. The National Council passed the confidence vote on 18 June 2026.
• The government submitted the 2026-2028 general government budget proposal and the National Council approved it before the 24-month exemption expired. It thereby avoided the application of the obligation to submit a balanced or surplus budget proposal with no year-on-year increase in expenditure, which would have applied after the exemption expired[19].
• The Ministry of Finance recommended a similar approach to local governments[20] when approving their budgets for 2026. In the CBR’s view, however, approval of those budgets before the exemption expired did not mean that the sanctions ceased to apply to them after 22 November 2025. The CBR pointed out that local government budgets which failed to meet the requirements of the constitutional act came into conflict with its provisions once the exemption expired. Local governments should therefore have brought their budgets into line with the requirements of the constitutional act from 23 November 2025[21]. This is because the constitutional act establishes a stricter regime for local government budgets than for the budget proposal submitted by the government to the National Council.
• The CBR regards the announced use of the 36-month exemption from the strictest sanctions as a further risk of circumvention of the rules. In May 2026, the prime minister stated that the government would not prepare a deficit-free general government budget proposal for 2027 because, in his view, the conditions for this exemption had been met. Based on the information published to date, however, the CBR considers that the conditions for applying the 36-month exemption have not been met.

The CBR emphasises that, while debt-brake sanctions apply primarily to the government, ultimate responsibility for compliance with them and for the long-term sustainability of public finances lies with the National Council of the Slovak Republic. If parliament allows the government not to submit measures to reduce debt (or to submit them only as a purely formal exercise, as in the past), or if parliament expresses confidence in the government without the government demonstrating a credible strategy at least to stabilise debt, parliament thereby assumes responsibility for the constitutionally required safeguarding of the long-term sustainability of the state’s public finances.

Public expenditure ceilings

The constitutional act requires the introduction of binding public expenditure ceilings. Since 1 August 2024, the national ceiling has been linked to the net expenditure growth path under the European fiscal rules. According to the CBR, this change weakened the original framework because it does not take account of the long-term sustainability of public finances over a 50-year horizon and does not ensure full consistency between the national and European rules.

The insufficiently stringent expenditure ceilings did not create pressure for a year-on-year reduction in the deficit in line with their objectives; instead, they formally permitted a substantial increase in the deficit in 2025.

Both ceilings were complied with by a wide margin in 2025. After taking the defence escape clause into account, cumulative net expenditure growth in 2024 and 2025 reached 3.3%, whereas the European trajectory allowed growth of up to 10.3%. The national ceiling of €61.1 billion was complied with by a margin of €1.4 billion. This large margin, however, points to the rules being set too loosely: if the European ceiling had been used in full, the deficit could have risen to as much as 7.3% of GDP in 2025[22], or to 6.0% of GDP if the national ceiling had been used in full. This also illustrates the inconsistency between the European and national fiscal frameworks.

The current calibration of the ceilings does not exert sufficient pressure to achieve sustainable public finances. In the CBR’s view, the European rule could remain formally complied with until 2028 even without further consolidation measures. If the permitted expenditure path were used in full, the deficit would reach as much as 5.4% of GDP and gross debt 73.3% of GDP in 2028. In their current form, the expenditure ceilings therefore fail to ensure the necessary deficit reduction, debt stabilisation or achievement of long-term sustainability and allow the necessary consolidation to be postponed to later years.

Specific provisions for local government

The rules applicable to local government are intended to separate local governments’ responsibility for their own solvency from that of the state, ensure state funding for their new tasks, and limit excessive local government indebtedness. For these reasons, three areas are assessed: (1) state participation in ensuring local government solvency; (2) financial coverage of new tasks and competences; and (3) compliance with the debt limit.

• Based on the information obtained, it can be concluded that in 2025 the state did not participate financially in ensuring local government solvency, which is consistent with the requirement of the constitutional act to ensure budgetary discipline and a clear allocation of responsibility to local governments for the exercise of their powers. During 2025, the government did not provide local governments with any new repayable financial assistance from the state’s financial assets. However, it improved their financial position through earmarked grants and the partial remission of assistance provided earlier[23]. The rules for providing repayable financial assistance from the state’s financial assets should be amended to prevent the selective favouring of local governments and the use of such assistance to avert their insolvency.
• In the CBR’s view, the Social Services Act, as amended in 2025, assigned new tasks within the own competences of self-governing regions without full financial coverage from the state. The obligation to fund non-public providers of facilities for older people and residential care facilities is being transferred gradually from municipalities to self-governing regions from 1 July 2026 and 1 January 2027. After taking into account the increase in the share of self-governing regions in personal income-tax revenue from 28.6% to 29.3% from 1 January 2027, the CBR estimates the unfunded impact on their budgets at approximately €18 million per year from 2027[24]^, [25].

Changes to local government funding should be subject to a proper consultation procedure, their budgetary impacts should be quantified separately and subsequently monitored. New tasks within local governments’ own competences must be adequately funded, while the state must cover the costs of delegated state-administration tasks.

• All self-governing regions complied with the debt limit[26], but several municipalities exceeded it. For 2024, after statutory exemptions had been taken into account and the reported data verified, fines were imposed on five of the 26 municipalities initially identified. For 2025, 17 municipalities are preliminarily at risk of receiving a fine, while the reported data are still being verified. A further 22 municipalities were contacted because they had not submitted the required financial statements. Although the Ministry of Finance has assessed compliance with the debt rule and imposed fines since 2015, it has not yet published a single evaluation. The CBR therefore recommends that the Ministry of Finance transparently disclose[27] all information relating to the verification of local government debt and the imposition of fines.

Fiscal transparency rules

The fiscal transparency rules defined by the constitutional act were largely, but not fully, complied with. The tax revenue forecast approved by the Committee for Tax Forecasts was not published by 15 February 2025, as required by the constitutional act[28]. The 2026-2028 general government budget contained all the data required by law except for information on most companies in which the Ministry of Health of the Slovak Republic holds an ownership interest (Debitum, a.s., health-care facilities and Všeobecná zdravotná poisťovňa). The annual summary report for 2024 contained all the data required by law.

The CBR also assesses fiscal transparency in terms of the informational value and comprehensibility of the information contained in the documents under review, the consistent application of the ESA 2010 methodology, and the degree of parliamentary control over budget approval and execution. No progress has been made in the areas addressed by the CBR’s recommendations in its August 2025 report[29]. On the contrary, the availability of information on the actual state of public finances deteriorated, as, unlike in previous years, the government did not publish the expected development of general government revenue and expenditure excluding additional measures – the so-called fiscal outlook. It is therefore unclear what scale of consolidation measures it assumes in the coming years.

According to the CBR, the most significant persisting shortcomings, whose removal would help improve fiscal transparency and the budgetary process as a whole, include the following:

• The general government budget was aligned with the budgetary objectives only for 2026. To meet the budgetary objectives for 2027 and 2028, it lacked specific measures amounting to 1.6% and 1.8% of GDP, respectively. Nor did the amended public expenditure ceilings, which are linked to the reformed European fiscal rules and assess compliance only for the following year, make the preparation of the three-year budget more binding.
• The legislative framework for approving the budget in the National Council of the Slovak Republic is inadequate in terms of both the subject matter and the content of the documents being approved. The National Council approves only the cash-based state budget for the following year. This historically established model does not capture the key parameters of public finances as a whole or all changes to them under the European standards defined by the ESA 2010 methodology.
• Moreover, given the importance of the document, the process for approving the 2026-2028 budget was disproportionately short[30]. It limited the scope for informing the public and members of parliament, curtailed the discussion in the National Council’s Committee on Finance and Budget, to whose hastily convened meeting the CBR was not invited in advance[31], and reduced the quality of public, expert and parliamentary scrutiny.
• Transparency on the expenditure side of the budget remains low. Following the repeal of the statutory requirement to prepare the budget on the basis of a no-policy-change scenario^[32], the impact of incorporated measures is not quantified, except for health-care expenditure. Transparency is also reduced by the fact that certain expenditures originally classified as budget reserves continue to be budgeted centrally under the General Treasury Administration chapter, but now as ordinary expenditure items^[33]. In substance, they continue to function as reserves: when the budget is approved, they are not allocated to specific budget chapters and their final use is determined only during the year^[34]. As the quarterly reporting obligation applies only to reserves defined by law^[35], the regular publication of comparable information on transfers and the use of funds is not guaranteed for these expenditures. This makes ongoing scrutiny by the National Council and the public more difficult.
• Information on state-owned enterprises should be improved. Adding a brief commentary on the expected financial performance of individual enterprises would allow a better assessment of the risks arising from the performance of enterprises owned by the state or by MH Manažment, a.s.
• The informational value of the net-worth indicator would be enhanced by valuing the components that have not yet been quantified; the Ministry of Finance should assign greater priority to this task and present concrete results within a reasonable period[36]. For a more detailed assessment of the impact of government measures on net worth, it is also necessary to create the technical conditions for data collection and, in co-operation with the CBR, define a methodology linking changes in net worth to the budget balance.

[1]     Constitutional Act No. 493/2011 Coll. on Fiscal Responsibility.

[2]     Constitutional Act No. 422/2020 Coll., effective from 1 January 2021, added Article 55a to the Constitution of the Slovak Republic No. 460/1992 Coll.

[3]     CBR, Report on the Long-term Sustainability of Public Finances for 2025, April 2026 (only in Slovak, Key Conclusions available in English).

[4]     The consolidation packages for 2024 and 2025 and the factors reducing their permanent contribution are analysed in greater detail in the CBR Secretariat commentary by Majher, P., Why Deficits Remain High Even After Two Consolidations, August 2025 (only in Slovak). The composition of the consolidation package for 2026 and its impact on economic growth and public finances are discussed in the CBR Secretariat commentary by Múčka, Z. and Majher, P., It Is Not Only the Size of Consolidation That Matters, but Also Its Composition, March 2026 (only in Slovak).

[5]     CBR, Medium-term Fiscal Forecast, July 2026 (only in Slovak).

[6]     The long-term sustainability indicator shows the scale of the correction required if developments follow the no-policy-change scenario. It does not, however, indicate what will happen if developments deviate from that scenario – which is precisely why fiscal space is needed.

[7]     Ministry of Finance of the Slovak Republic, Annual Progress Report of the Slovak Republic 2026, April 2026.

[8]     During the current electoral term, the government has already relaxed its budgetary objective twice. The deficit originally targeted for 2027 was 3.0% of GDP; the government first relaxed it to 3.5% of GDP in 2025 and subsequently to 4.2% of GDP in 2026.

[9]     CBR, Medium-term Fiscal Outlook for 2026 to 2028 (Assessment of the 2026 Annual Progress Report), May 2026 (only in Slovak, Key Conclusions available in English).

[10]    Judgment of the Constitutional Court of the Slovak Republic, Case No. PL. ÚS 13/2022, paragraphs 158 and 159.

[11]    Current cases are presented in the section entitled General government debt limit.

[12]    The upper debt limit was 53% of GDP in 2024 and 52% of GDP in 2025.

[13]    The debt-to-GDP ratio for 2025 will be definitively confirmed in the autumn notification in October 2026.

[14]    The obligation to apply sanctions associated with exceeding the third, fourth and fifth debt-brake sanction brackets does not apply for 24 months after the government manifesto is approved and the government receives a vote of confidence. As the National Council of the Slovak Republic approved the manifesto of the new government of the Slovak Republic for 2023-2027 and passed a vote of confidence in the government on 21 November 2023, the 24-month exemption took effect on the following day.

[15]    Debt-brake sanctions apply cumulatively, beginning with the sanctions triggered by exceeding the second bracket and extending to those triggered by the highest sanction bracket.

[16]    Formal compliance with the constitutional act without fulfilling its purpose may be deemed a violation thereof. The Constitutional Court of the Slovak Republic emphasised the practical implementation of the law over formalism, for example in relation to the CBR’s tasks in paragraph 161 of the reasoning of the judgment in Case No. PL. ÚS 13/2022. The Constitutional Court also recalled that the Constitution is not a document containing normatively irrelevant proclamations whose meaning is determined only by subsequent legislative activity, but rather a genuine set of directly applicable norms, principles and values with their own specific normative effect.

[17]    The CBR’s opinion is based on the judgment of the Constitutional Court of the Slovak Republic of 17 June 2026, Case No. PL. ÚS 6/2026 (paragraph 44).

[18]    Judgment of the Constitutional Court of the Slovak Republic of 17 June 2026, Case No. PL. ÚS 6/2026.

[19]    Moreover, given the importance of the document, the process for approving the 2026-2028 budget was disproportionately short. Four working days elapsed between the first publication of the budget proposal and its scheduled consideration by the lead committee of the National Council, an unprecedentedly short period in the history of state-budget approval. For the first time, the CBR was not informed in advance or invited to present its view of the budget. Such a short period limited the scope for informing the public and members of parliament, curtailed discussion in the National Council’s Committee on Finance and Budget, and reduced the quality of public, expert and parliamentary scrutiny.

[20]      According to the Ministry of Finance’s position, the sanctions did not apply to 2026 budgets if local governments approved them before 22 November 2025. According to the Ministry of Finance, the obligation to approve a budget with no increase in expenditure and with a balanced or surplus balance would apply only to budgets for 2027 if the sanctions remained in force.

[21]    A local government budget is required to comply with the requirements of the constitutional act at all times, whereas in the case of the state budget the sanction applies only to the budget proposal submitted by the government.

[22]    The general government deficit reached 4.5% of GDP in 2025 and was therefore 2.8 percentage points of GDP lower than the rule would have permitted.

[23]    In 2025, the government provided grants to local governments and partially remitted their repayable financial assistance. The government had originally provided these funds to municipalities and self-governing regions to compensate for the shortfall in personal income-tax revenue in 2024 and to help finance the €800 bonuses for employees working within local governments’ own competences.

[24]    CBR, Addendum to the Assessment of the General Government Budget for 2026 to 2028, January 2026, Annex 2 (only in Slovak).

[25]    The SK8 Association estimated the unfunded impact of this legislative change on the budgets of self-governing regions at approximately €19 million per year from 2027.

[26]    The debt limit is set at 60% of current revenue in the preceding year.

[27]    The CBR does not have final data on municipal debt adjusted on the basis of the Ministry of Finance’s verification of the reported figures.

[28]    The Ministry of Finance’s website does not state the exact date on which the tax revenue forecast was published (the commentary on the February forecast, which is regarded as the forecast’s official publication, likewise contains no specific date), while the Institute for Financial Policy website gives 17 February 2025 as the publication date of the February tax revenue forecast.

[29]    An assessment of compliance with the CBR’s recommendations is provided in Annex 3.

[30]    Four working days elapsed between the first publication of the budget proposal and its scheduled consideration by the lead committee of the National Council, an unprecedentedly short period in the history of state-budget approval. For more details, see Box 2 in the CBR’s Addendum to the Assessment of the General Government Budget for 2026 to 2028 (only in Slovak).

[31]    The CBR ultimately attended the committee meeting, but was notified only after it had begun. Such an approach cannot be regarded as good practice.

[32]    With effect from 1 August 2024, the second sentence of Section 4(2) of the Act on the General Government Budgetary Rules was repealed: The general government budget shall be prepared and implemented in accordance with the public expenditure ceiling on the basis of no-policy-change scenarios. The Ministry of Finance justified the amendment by the need to ensure compliance with the commitments approved in the medium-term fiscal-structural plan under the new European rules. In the CBR’s view, however, preparing the budget on the basis of no-policy-change (NPC) scenarios is not inconsistent with the requirement that the budget be prepared in accordance with the new European rules (the required expenditure growth rate is achieved precisely through measures going beyond the NPC scenario).

[33]    The amendments to Section 10 of Act No. 523/2004 Coll., made by Act No. 118/2024 Coll., took effect on 1 August 2024. Since then, the act has defined four budget reserves: the government reserve, the prime minister’s reserve, the reserve for addressing adverse developments in budgetary performance, and the reserve for crisis situations outside wartime and a state of war and for carrying out flood-protection works. The prime minister’s reserve is budgeted under the Government Office chapter and the other reserves under the General Treasury Administration chapter. Budget reserves for 2024 amounted to approximately €2.5 billion. Following the legislative amendment, only €0.3 billion was budgeted for them in 2025, while their budgeted amount in the current 2026 budget is only €21 million. Because the statutory definition of reserves has changed, these amounts are not fully comparable in substance.

[34]    From the perspective of transparency, expected expenditure should be itemised to the greatest extent possible directly under the budget chapters in which it is actually to be used.

[35]    The amendment to Act No. 523/2004 Coll. on the General Government Budgetary Rules introduced an obligation to publish information on the use of reserves on a quarterly basis (instead of the previous half-yearly frequency) on the websites of the Ministry of Finance and the Government Office.

[36]    The Ministry of Finance confirmed that it is continuing to work on the methodology for the net worth concept of the Slovak Republic. It has focused on three unmapped areas that have not yet been reported or quantified: the valuation of Slovakia’s cultural heritage, ecosystems and ecosystem services in Slovakia, and protected areas (forests, water, fauna and flora).

Príspevok Report on Compliance with the Fiscal Responsibility and Fiscal Transparency Rules for 2025 (august 2026) je zobrazený ako prvý na Rada pre rozpočtovú zodpovednosť.

The Report on Compliance with the Fiscal Responsibility and Fiscal Transparency Rules annually assesses the compliance with the rules arising from the constitutional Fiscal Responsibility Act[1] for the previous year, always by 31 August. In addition to evaluating the development of the long‑term sustainability of public finances — the most important objective pursued by the act — it also assesses compliance with the constitutional debt limit, as well as other statutory obligations, especially regarding data reporting and publication, local government debt, and the funding of local governments’ competences.

Long‑term sustainability of public finances

The key objective of fiscal responsibility is to achieve sustainable public finances. The protection of long‑term sustainability of Slovakia’s economic performance regarding the compliance with the principles of transparency and effectiveness in the use of public funds, has been enshrined in the amendment to the Constitution of the Slovak Republic since 2020[2].

In its evaluation, the Council for Budget Responsibility (CBR, or Slovak abbreviation RRZ) concluded[3] that the long‑term sustainability of public finances was not achieved in 2024. Under a no‑policy‑change scenario, the long‑term sustainability indicator reached 4.1% of GDP, which means that public finances are in the medium‑risk zone. Following several measures adopted by the government and parliament[4], visible progress has been made compared to 2023 and the indicator improved year‑on‑year by 2.1 percentage points.

Taking into account the CBR’s expectations for the medium‑term development of public finances[5], as well as the measures adopted during 2025, long‑term sustainability would worsen by 0.5% of GDP compared to the estimated position at end of 2024. This reflects approved wage indexation in the education sector, higher funding for the Sport Promotion Fund and amendments to the Civil Service Act and the Employment Services Act. The CBR also expects a faster pace of wage growth for general government employees in the final year of the electoral term.

Given the persistent poor state of public finances, the government should present further ambitious measures to improve the sustainability of public finances as soon as possible. The government has declared a goal to reduce the deficit below 3% of GDP by 2028 and to halt the rise in debt[6], which is more ambitious than the current requirements under the current EU fiscal rules. According to the CBR’s current estimate and assuming the termination of energy subsidies[7], the measures needed to achieve the government’s budgetary objectives amount to €2.0 billion (1.4% of GDP) in 2026 and a further €0.9 billion (0.6% of GDP) by the end of the electoral term. Subsequently, in 2028, additional measures of €1.8 billion (1.2% of GDP) will be required due to the expiration of temporary consolidation measures in 2027 (in particular the increased rate of health contributions and the increased regulated levy on banks).

The size of the consolidation package required is also affected by the fact that, at the end of 2023 and 2024, the government and the parliament approved measures that increase expenditure and reduce revenue (for example, raising the 13th pension payments, higher spending in healthcare, a reduced 5% VAT rate for selected goods and services, or a lower corporate income tax rate for small firms). Provided that these measures were not introduced and the consolidation measures were permanent in their full size, budgetary goals would have been met until 2027 without a need for further consolidation and for 2028, the need for consolidation measures would reach €1.7 billion (1.0% of GDP)[8].

The need to continue improving long‑term sustainability is further amplified by the currently high level of gross debt, which has now been in the highest sanction bracket of the debt‑brake mechanism for the fifth consecutive year. Without additional consolidation measures with the potential to noticeably improve the structural balance going forward, the current level of debt will pose an increasing risk to the sustainability of public finances.

Fiscal responsibility rules

To achieve long‑term sustainability of public finances, the constitutional act sets out fiscal responsibility rules. The operational and counter‑cyclical instrument of budget management should be the expenditure ceilings. The general government debt limit (the so‑called debt brake) should prevent debt from persistently exceeding levels that may be regarded as excessive. However, the CBR’s recommendations to strengthen fiscal responsibility have repeatedly not been implemented.

The way the constitutional act is currently applied and followed[9] by governments and the parliament has failed to provide sufficient safeguards for long‑term sustainability, in particular due to the absence of effective expenditure ceilings and the merely formal approach to complying with the debt‑brake sanctions. The constitutional act should therefore be modernised so that it reflects current debt developments, the need for effective liquidity management and, above all, so that the debt brake becomes an effective instrument for improving long‑term sustainability (for example, by introducing stricter measures when lower sanction brackets are exceeded and by protecting the economy from an abrupt change in fiscal policy, provided sufficient consolidation has been achieved). This requires a cross‑party consensus. At the same time, the debt brake is disproportionately strict for local governments, which have minimal scope to contribute to a reduction in overall public debt[10].

An amendment to the constitutional act is also necessary to ensure alignment of national legislation with the European framework. As part of the reform of the EU fiscal framework, principles on the independence and minimum tasks of fiscal councils in the EU were adopted. Slovakia should transpose these changes[11] into national legislation by the end of 2025.

An essential precondition for effectively safeguarding long‑term sustainability is a change in the approach of governments and the parliament to the fiscal responsibility rules. A formal approach which circumvents the purpose of the rules must be replaced by genuine compliance. Merely tightening the debt‑brake sanctions or refining the wording of the constitutional act may be insufficient if there is no functioning mechanism to ensure compliance with its provisions. The European expenditure rules set justified minimum guardrails, but they do not necessarily provide optimal guidance for economic policy once all of Slovakia’s needs are taken into account. It would therefore be appropriate to re‑link the public expenditure ceilings to the long‑term sustainability indicator under the constitutional act, as was the case under the original national expenditure ceilings in force from late 2022 to July 2024. This would better ensure the improvement required in the long‑term health of public finances.

General government debt limit

The debt‑to‑GDP ratio remained in the highest, fifth sanction bracket[12] of the debt‑brake mechanism in 2023 and 2024. Based on data published by Eurostat in October 2024, the debt stood at 56.1% of GDP at the end of 2023, and according to preliminary data[13] released in April 2025 it reached 59.3% of GDP at the end of 2024.

Because the 24‑month exemption from the application of stricter sanctions under the constitutional act[14] has been in effect since 22 November 2023, the level of debt achieved in 2023 was subject to the sanctions triggered by the first and second sanction brackets of the constitutional Fiscal Responsibility Act (Table 1).

Due to the duration of the 24‑month exemption until (and including) 21 November 2025, the debt level achieved in 2024 is associated with the sanctions applicable to the first two sanction brackets of the debt‑brake mechanism. From 22 November 2025, the debt level will be associated with the sanctions resulting from all five sanction brackets of the constitutional Fiscal Responsibility Act[15] (Table 2). The assessment of the sanctions triggered by exceeding the third, fourth and fifth sanction brackets will only be possible after the exemption expires or, as appropriate, after the end of the year.

Despite the high levels of general government debt, which has continuously remained in the highest sanction bracket of the debt‑brake mechanism since 2020, compliance with the sanctions has in recent periods been only formal and has had a minimal effect in reducing the general government debt. Examples include the repeated submission[16] of proposals to reduce the debt which typically lack a sufficient set of concrete measures, the blocking of 3% of state‑budget expenditures in May 2023 without affecting the general government balance, or the merely formal proposal for a balanced general government budget for 2024–2026 which, according to the government’s own statement, would have caused a recession and jeopardised the functioning of the state.

According to the authors of the constitutional Fiscal Responsibility Act, the implementation of measures triggered by exceeding the debt‑brake sanction brackets should lead to a reduction of the state’s indebtedness to a safe level. In practice, however, the measures adopted by successive governments have long failed to meet this objective. Experience has shown that governments are unwilling to truly comply with the constitutional act and regularly circumvent the debt‑brake sanctions, thereby ignoring the purpose of the act, namely the achievement of long‑term sustainable public finances of the Slovak Republic.

The Slovak Republic — that is, all its bodies of state power and public authority — is obliged to protect the long‑term sustainability of the country’s public finances. If the fiscal position is not sustainable in the long term, a situation may arise in which the state will not be able to properly ensure the protection of fundamental rights in the future, in particular those that depend on public funding[17]. When preparing the general government budget proposal and measures to safeguard long‑term sustainability, the government enjoys a margin of discretion only within the limits set by generally binding legislation[18]. Formalism in the interpretation and application of the relevant constitutional norms is inadmissible. Formal compliance with the constitutional act without fulfilling its purpose may be deemed a violation thereof[19].

In the medium term, the CBR estimates[20] that without additional consolidation measures, gross debt will increase cumulatively by 15.5 p.p., from 59.3% of GDP at end of 2024 to 74.8% of GDP in 2029. The projected increase in general government debt is mainly driven by a very unfavourable development in the structural primary balance. The highest sanction bracket of the debt brake will start at 50% of GDP in 2029, which would imply an exceedance by 24.8 p.p.

Public expenditure ceilings

From the outset, in addition to the debt limit, the constitutional act envisaged the introduction of expenditure ceilings as an operative budget management tool and an imperative component of responsible fiscal policy. However, the public expenditure ceilings were only enacted eleven years after the adoption of the constitutional act. With effect from 1 April 2022, they became the main budgetary instrument for achieving the long‑term sustainability of public finances under the constitutional act, but they only remained in force in that form only until 31 July 2024. With effect from 1 August 2024 the public expenditure ceiling has been linked solely to the reformed EU rules under the Stability and Growth Pact.

The Ministry of Finance justified the change in the rules for setting the public‑expenditure ceiling by the need to eliminate inconsistencies between the national and the European fiscal frameworks; according to the CBR, this has not been achieved. The nominally defined ceiling (the national rule) does not respond to revisions in national accounts, nor to the changed effects of adopted revenue measures. It sets the expenditure limit for a given year without considering its fulfilment in previous years. On the other hand, the net expenditure growth (European rule) does not contain these shortcomings and primarily considers the cumulative path of expenditure growth over a multi-year period[21]. Whereas the nominally set ceilings do not provide explicit constraints if the national defence escape clause is activated[22], under the European rule the maximum amount by which the ceiling may be exceeded is specified[23].

Already in last year’s report the CBR warned that the approved changes to the functioning of the ceiling are likely inconsistent with the concept of safeguarding the long‑term sustainability of the Slovak Republic enshrined in Article 55a of the Constitution and in the constitutional Fiscal Responsibility Act. They can be regarded as a significant weakening of the previous framework of rules because expenditure ceilings linked only to European rules do not sufficiently[24] reflect the need to achieve long‑term sustainability over a 50‑year horizon.

Linking the public expenditure ceiling to the European rules may lead to a slower and more delayed permanent recovery of public finances[25]. In Slovakia’s case, the set trajectory for the growth of net expenditures is based on optimistic assumptions[26], which means that the required net‑expenditure growth rates are too loose and will not deliver the necessary consolidation. Moreover, the application of the defence ‘escape clause’ can further relax the framework by allowing higher defence spending at the expense of a higher deficit and debt[27]. In addition, the rule may not be sufficiently functional or flexible; its correction mechanism is likely to be lengthy in the event of non‑compliance, it will be less precise against potential circumvention and more rigid in times of crisis.

Specific provisions for local government

The rules applicable to the local government sector aim to separate the responsibility for the solvency of local governments from the state, to ensure that their new tasks are financed by the state and to prevent excessive indebtedness on the part of local governments. For these reasons, the following three areas are evaluated: (1) whether the state has abstained from providing funds to ensure local‑government solvency; (2) whether new tasks and competences have been devolved to local government without adequate financial coverage; and (3) the level of local government debt.

• Based on the information currently available, it can be stated that in 2024 the state did not participate financially in ensuring the solvency of local governments, which is consistent with the requirement of the constitutional act to ensure budgetary discipline and the clear allocation of responsibility for the exercise of local‑government powers. During 2024 the government did not provide repayable financial assistance to local governments from the state’s financial assets. However, through the partial remission of repayable financial assistance and the provision of direct grants it improved the financial position of local governments[28]. The current rules for the provision of repayable financial assistance from the state’s financial assets should be amended to prevent the selective favouring of local governments and to avert future insolvency.
• Based on the information currently known, in the course of 2024 the amendments to the Construction Act and the Spatial Planning Act created new tasks for local governments in both their own competences and in their delegated performance of state administration, which required financing to be provided by the state[29]. Given the scope of changes in construction legislation, changes in the related administrative fees and the fact that the state introduced new forms of administrative fees during 2025, it is not currently possible to unambiguously assess whether the financing of these new tasks is adequate. Associations representing local governments point to the risk that the new tasks may necessitate increased staffing and higher funding needs. On the other hand, higher revenues from fees may cover these costs.

In line with the principles of transparency and effectiveness, any changes relating to the financing of local governments must always be subject to a standard consultation procedure and be costed explicitly. It is also necessary to consistently respect and monitor the impacts of measures so that central government authorities do not impose additional burdens on local government budgets without identifying them in the impact clauses and, at the same time, to prevent the transfer of new tasks (whether in the exercise of original or delegated local government powers) to local governments without adequate financial coverage.

• In the case of local governments with excessive debt[30], the administrative proceedings on the imposition of fines for 2023 were completed. While all self‑governing regions ended up below the statutory debt limit, out of 30 initially identified municipalities, after taking legislative exemptions into account and verifying the reported figures, fines were imposed on two municipalities. For 2024, 23 municipalities are preliminarily at risk to receive a fine; the verification of the reported figures is ongoing. Further 27 municipalities were contacted because they had not submitted the required financial statements. All self‑governing regions also remained below the statutory debt limit in 2024. The Ministry of Finance assessed compliance with the local‑government debt rule, with the possibility to impose a fine, for the first time for 2015, but has not yet published a single evaluation. The CBR recommends that the Ministry of Finance transparently disclose[31] all information related to verifying the level of local‑government debt and the imposition of fines.

Fiscal transparency rules

The fiscal transparency rules defined by the constitutional act were almost fully complied with. Macroeconomic and tax revenue forecasts were approved by the competent independent committees and published within the deadlines set by the constitutional act. The 2025–2027 general government budget contained all the data required by law, with the exception of information on a majority of companies with the participation of the Ministry of Health of the Slovak Republic (health‑care facilities and Všeobecná zdravotná poisťovňa). The annual summary report for 2023 contained all the data required by law.

In addition to the requirements defined by law, the CBR also assesses the budget transparency in terms of comprehensibility and quality of the information contained in the assessed documents, consistent application of the ESA2010 methodology, and the degree of parliamentary control over the approval and execution of the budget. These were also the focus of the CBR’s recommendations in the August 2024 report, in which no progress has been made. On the contrary, transparency decreased in relation to achieving the budget target for 2025 due to non‑use of the ESA 2010 methodology for energy subsidies[32], and parliamentary and public oversight over those state budget expenditures that used to be treated as reserves has also weakened.

Among the main persisting shortcomings, the remedy of which could improve fiscal transparency and the entire budgetary process, the CBR highlights:

• The general government budget was aligned with the budgetary objectives only for 2025. To meet the objectives in 2026 and 2027, the budget lacked specific measures amounting to 0.4% and 1.9% of GDP, respectively. The amended public expenditure ceilings, linked to the reformed European fiscal rules and evaluated only for the following year, have not increased the binding nature of preparing a three‑year budget.
• The CBR repeatedly notes that the current legislative framework for the approval of the budget in the National Council of the Slovak Republic is not adequate in terms of the subject‑matter and content of the documents being approved. The parliament’s approval of a (cash‑based) state budget for the next year is rooted in historical practice and is no longer sufficient to capture the key monitored parameters of public finances and all changes in public finances, in line with European standards defined by the ESA 2010 methodology.
• The expenditure side of the budget should be based to a much greater extent on a no‑policy‑change scenario for the following three years, as required in the past by the Act on the General Government Budgetary Rules[33]. In recent years this approach has been used only for the budgeting of health‑insurance companies’ expenditures, which allowed a transparent assessment of the assumptions underlying the health‑sector budget, including the impacts of the incorporated measures. The 2025–2027 general government budget did not include such information even for health‑care expenditures[34].

• Information on state‑owned enterprises should be improved. A short commentary on the expected economic results of individual enterprises would allow better assessment of potential risks arising from the performance of enterprises owned by the state, or by MH Manažment, a.s.
• The information value of the net‑worth indicator could be enhanced by valuing the as‑yet unquantified components of net worth, which the Ministry of Finance is currently working on[35]. For a deeper analysis of the impact of government measures on net worth, it is necessary to create the technical prerequisites for data collection and, in co‑operation with the CBR, to define a methodology linking the change in net worth to the budget balance.

[1]      Constitutional Act No. 493/2011 Coll. on Fiscal Responsibility.

[2]      By Constitutional Act No. 422/2020 Coll., effective from 1 January 2021, Article 55a was added to the Constitution of the Slovak Republic No. 460/1992 Coll.

[3]      CBR, Report on the Long‑term Sustainability of Public Finances for 2024, April 2025.

[4]      This mainly concerns measures adopted as part of the consolidation package at the end of 2024, such as increasing VAT to 23%, introducing new tax on financial transactions, and an increase in the corporate income‑tax rate.

[5]      CBR, Medium‑term Fiscal Outlook for 2025 to 2029 (Assessment of the 2025 Annual Progress Report), June 2025.

[6]      Ministry of Finance of the Slovak Republic, Annual Progress Report of the Slovak Republic 2025, April 2025 (only in Slovak).

[7]      The announced continuation of energy subsidies in 2026 would increase the required scale of consolidation; the Ministry of Finance has not yet published details regarding the scope and the method of financing this measure.

[8]      Majher, P., Why Deficits Remain High Even After Two Consolidations, CBR Commentary No. 04/2025 (only in Slovak).

[9]      Based on the presumption of a rational legislator, the constitutional act must not be interpreted and applied in a way that circumvents its aims and ignores its substance.

[10]    In the CBR’s view, the provisions of the debt brake for local governments, i.e. the obligation to approve a balanced or surplus budget, as well as the obligation to budget for non-increasing expenditure, should be removed. This should instead be replaced by the rules of budgetary discipline, which are currently part of the Act on the Budgetary Rules of Local Government.

[11]    These include, for example, enabling the CBR to access data, the requirement for independent external assessment, the ensuring of the stability of financial resources over a multi-year horizon. In the field of new duties for the CBR, this would include, for example, the ex-post assessment of macroeconomic and budgetary forecasts, or a comprehensive assessment of the national budgetary framework.

[12]    In 2023 the highest sanction bracket meant that the debt‑to‑GDP ratio exceeded the upper limit for that year; in 2024 the upper limit of the debt brake was 53% of GDP.

[13]    The debt‑to‑GDP ratio for 2024 will be definitively confirmed in the autumn notification in October 2025.

[14]    The obligation to apply sanctions associated with exceeding the third, fourth and fifth sanction bracket of the debt brake does not apply for the period following 24 months after the passing of government manifesto and confidence vote to the new government by the parliament. As the National Council of the Slovak Republic passed the government manifesto and the confidence vote of the new government for 2023 to 2027 on 21 November 2023, the 24-month exemption was activated on the following day.

[15]    Debt‑brake sanctions apply cumulatively, starting with the sanctions triggered by exceeding the second bracket up to those triggered by the highest bracket.

[16]     The document concerning the 2022 debt was not submitted at all; in July 2024 the government submitted a cumulative document for 2022 and 2023, which is not permitted under the constitutional act.

[17]    Judgment of the Constitutional Court of the Slovak Republic, Case No. PL. ÚS 13/2022, paragraphs 158 and 159.

[18]    This margin of discretion must be exercised in a manner which the authority itself is prepared to fulfil in good faith. At the same time, state authorities are bound not only by the wording but also by the meaning and purpose of the relevant act.

[19]    The Constitutional Court emphasised practical implementation of the law over formalism, for example, in the tasks of the CBR in point 161 of the reasoning of the Case No. file PL. ÚS 13/2022. The Constitutional Court also recalled that the Constitution is not a document containing normatively irrelevant proclamations, the meaning of which is determined only by further legislative activity, but is a real set of directly applicable norms, principles and values that have their own specific normative impact.

[20]    CBR, Medium-term Traffic-light, July 2025.

[21]    The European Commission assesses the development of net expenditure on both a one-year and a multi-year horizon. In the case of the national defence escape clause, a cumulative approach applies — in Slovakia’s case, the assessment of the cumulative expenditure path in 2024–2028 is therefore more important.

[22]    The Act on the General Government Budgetary Rules only contains the possibility of exceeding the public expenditure ceilings if the escape clause is activated on the basis of relevant EU regulation, while this regulation does not contain specific conditions for the application of the clause in case of its activation. However, according to the interpretation of the MF SR, there is an implicit restriction on exceeding the ceilings, since according to them the ceiling can only be exceeded in accordance with the terms of the escape clause approved by the Council of the EU.

[23]    The national escape clause for defence expenditure allows the net‑expenditure growth path to be exceeded only by the increase in defence expenditure, while the maximum exceedance can be 1.5 % of GDP (when compared to 2021) during the years 2025 to 2028. Council of the EU approved this escape clause for the Slovak Republic in July 2025.

[24]    European fiscal rules require, over the horizon of the implementation of the National Medium-Term Fiscal Structural Plan, offsetting the estimated costs of population ageing only for a 10-year period after the end of the plan’s duration.

[25]    By adhering to the maximum allowed growth of net expenditure while applying the exemption to currently estimated defence expenditure, the CBR estimates that the deficit would only fall to 4.1 % of GDP in 2028 and the debt would reach 69.4 % of GDP. This is in contradiction with the original intention of the European rules to sustainably reduce Slovakia’s public finance deficit below 3 % of GDP and stabilise debt under 60 % of GDP.

[26]    The European Commission’s calculation is based on the assumption of unitary elasticity of revenues to GDP, which contradicts the estimates of the MF SR and the CBR. In fact, the share of income to GDP in 2024 decreased by 0.8 % of GDP compared to 2023, and in the following years, the CBR assumes a continuation of the decline. The different actual development of inflation compared to the assumptions was also not taken into account when the growth rate was calculated.

[27]    The escape clause responds to the need to increase defence spending in reaction to the geopolitical situation, but in case of Slovakia, the estimated increase in defence expenditure in years 2025 to 2028 is primarily resulting from the decisions to purchase military equipment contracted prior to Russian invasion in Ukraine.

[28]    In 2024, the government provided grants to local governments and remitted part of the repayable financial assistance. The government originally provided these funds to municipalities and self-governing regions to compensate for the shortfall in personal income tax in 2024 and to help pay the 800 EUR bonus for employees within the original competences of the local governments.

[29]     The provision of the constitutional Fiscal Responsibility Act on ensuring the adequate funding of local governments with respect to new tasks applies to new tasks in the performance of local governments’ original powers. The funding of new tasks within the competencies devolved from the central government is guaranteed by the Constitution (Article 71(1)): “Performance of designated tasks of the local state administration may be devolved to a municipality or a higher territorial unit by law. The costs of performance of such powers devolved from the central government are paid by the state.”.

[30]    Exceeding the debt limit of 60% of current revenues in the preceding fiscal year.

[31]    The CBR does not yet have final adjusted source data on the debt level reported by municipalities, which was identified by the MF SR as part of the verification of reported figures in the identified municipalities.

[32]    The impact‑assessment statements contained only cash‑based impacts of measures without quantifying the impacts in ESA2010 terms. Without additional information this does not allow for a comprehensive assessment of the estimated impacts of this measure on the general government budget. Since the energy subsidies for 2025 were approved by the government later (13 December 2024) than the 2025 to 2027 general government budget was approved (3 December 2024) and their estimated costs in the ESA2010 methodology were higher than the quantified cash costs included in the approved budget, at the time of approval of the energy subsidies, there was no information on the additional measures necessary to meet the budgeted target for 2025, which can be considered non-transparent.

[33]    The second sentence of Section 4(2) of Act No. 523/2004 Coll. on the Budgetary Rules of the Public Administration required the budget to be compiled on the basis of a no‑policy‑change scenario for the following three years; however, with effect from 1 August 2024 this sentence was repealed.

[34]     Upon request, the Ministry of Finance provided the CBR with a background file for the health‑care sector that showed the structure of expenditure developments under the NPC scenario and the incorporated additional measures.

[35]    The Ministry of Finance confirmed that it is actively working on the methodology for the Net Worth concept of the Slovak Republic, currently focusing on three unmapped areas that have not yet been reported and quantified – the valuation of Slovakia’s cultural heritage worth, ecosystems and ecosystem-related services in Slovakia, and nature protected areas (forests, waters, fauna and flora).

Príspevok Report on Compliance with the Fiscal Responsibility and Fiscal Transparency Rules for 2024 (Summary) je zobrazený ako prvý na Rada pre rozpočtovú zodpovednosť.

The Report on Compliance with the Fiscal Responsibility and Fiscal Transparency Rules annually assesses the compliance with the rules arising from the constitutional Fiscal Responsibility Act^[1] for the previous year, always by 31 August. In addition to evaluating the development of long-term sustainability of public finances – the most significant objective pursued by the act – it also assesses compliance with the constitutional debt limit, as well as other statutory obligations, especially regarding data reporting and publication, local government debt, and the funding of local government’s competences.

Long-term sustainability of public finances

The key objective of fiscal responsibility is to achieve sustainable public finances. The protection of long-term sustainability of Slovakia’s economic performance regarding the compliance with the principles of transparency and effectiveness of public spending was enshrined in an amendment to the Constitution of the Slovak Republic^[2] in 2020.

The CBR has concluded in its evaluation^[3] that the long-term sustainability of public finances was not achieved in 2023. The long-term sustainability indicator reached 6.2% of GDP under a no-policy-change scenario; this means that public finances are currently in the high-risk zone.

From the beginning of 2024 to the end of August 2024, multiple measures were either implemented, or are pending approval (adjustment of the parameters for early old-age pension payments, introduction of a tax on sweetened non-alcoholic beverages, increase in the excise tax on tobacco partially offset by the introduction of the 13^th pension payments and new state budget expenditures), which have contributed to a slight improvement in the long-term sustainability indicator by approximately 0.1% of GDP compared to the estimated development at the end of 2023. These measures, however, are not sufficient to reduce the high risk associated with the development in public finances.

Considering the poor condition of public finances, affected by external factors outside the government’s control (the security and energy crisis) in addition to the implemented measures with a negative impact on the balance, the government should present sufficiently ambitious measures to improve long-term sustainability as soon as possible. In addition, the need to improve long-term sustainability is further augmented by the current high level of gross debt which has now been in the highest sanction bracket of the debt brake rules for four consecutive years.

Starting from 2023, effective implementation of the expenditure ceilings could have contributed to the improvement of long-term sustainability. However, this did not occur. The expenditure ceilings applicable to 2023 were not binding for the budgetary process due to an exemption applied in connection with the European rules of the Stability and Growth Pact ^[4]. The 2024-2026 budget was not prepared in accordance with the applicable expenditure ceilings^[5] and a legislative amendment was subsequently approved in 2024 under which the public expenditure ceilings became linked to the European rules, thus ending the original rule directly linked with the definition of long-term sustainability of public finances included in the constitutional act.

The government failed to take advantage of the good macroeconomic developments, especially since the summer of 2023, for a gradual and permanent consolidation of public finances; the start of consolidation efforts is therefore not expected before 2025. Despite the consolidation package^[6] approved at the end of 2023, long-term sustainability has been further deteriorating in 2023 and 2024 due to the effect of the measures taken by the government.

In accordance with the revised fiscal rules under the EU’s Stability and Growth Pact, the government must submit a national medium-term fiscal-structural plan^[7] by 20 September 2024 which should present a fiscal strategy for a reliable reduction in general government debt and deficit, including priority investments and structural reforms. The Ministry of Finance has yet not published a reference path (trajectory) sent by the European Commission to Member States. According to independent calculations of the Bruegel institute, as well as according to the CBR’s estimates, the requirements for the consolidation of Slovakia’s public finances are expected to be among the most stringent of all EU countries. This is mainly caused by the unfavourable starting position of public finances, or the lack of consolidation efforts in 2023 and 2024, and the estimated increase in the costs related to ageing population. However, in order to improve long-term sustainability, the credibility and enforceability of the new rules, as well as a concrete structure of consolidation measures^[8], will be crucial.

Fiscal responsibility rules

In order to achieve long-term sustainability of public finances, the expenditure ceilings and the upper limit on general government debt (the so-called debt brake) have been established by the constitutional act. Both these mechanisms were supposed to contribute to achieving long-term sustainability of public finances.

However, the way the constitutional act is currently applied by both the government(s) and the parliament^[9] has failed to provide sufficient safeguards for long-term fiscal sustainability, in particular due to the absence of effective expenditure ceilings and a purely formal approach to compliance with the debt brake sanctions. Therefore, the constitutional act should be revised to reflect the current debt development, the need for effective liquidity management and, above all, to make the debt brake an effective instrument for improving the long-term sustainability (for example, by introducing stricter measures when lower sanction brackets are exceeded and by protecting the economy from an abrupt change in the fiscal policy while maintaining sufficient consolidation); this, however, requires reaching a consensus across party lines. A change in the governments’ and parliament’s approach to the fiscal responsibility rules is also a prerequisite for effectively safeguarding the long-term sustainability of public finances. A formal approach, which tends to circumvent the purpose of these rules, must be replaced by actual compliance. A mere tightening of the debt brake sanctions or refining the provisions of the constitutional act may not be enough if there is no functioning mechanism in place to enforce compliance with those provisions. Last but not least, it must be understood that effective fiscal rules, whether at national or European level, represent only the minimum standards for responsible fiscal management. The rules set reasonable minimum limits, but do not necessarily provide optimal guidance for fiscal policy if all of Slovakia’s needs are considered.

General government debt limit

The debt-to-GDP ratio reached the highest, fifth sanction bracket of the debt brake rules^[10] in 2022 and 2023. According to the data published by Eurostat in October 2023, the debt stood at 57.8% of GDP at the end of 2022, while the preliminary data^[11] released in April 2024 indicated that it reached 56.0% of GDP at the end of 2023.

Since the 24-month exemption from the application of more stringent sanctions under the constitutional act^[12] did not apply between 5 May 2023 and 21 November 2023, the amount of the 2022 debt was subject to the sanctions triggered by the overrunning of the thresholds of all five sanction brackets under the constitutional Fiscal Responsibility Act during this period. The debt brake sanctions apply cumulatively, starting with the sanctions triggered by exceeding the second sanction bracket up to the highest one (Table 1).

Due to the application of the 24-month exemption, the size of debt achieved in 2023 has triggered sanctions resulting from exceeding the first two sanction brackets under the debt brake (Table 2).

Despite the high levels of general government debt, which has since 2020 remained continuously in the highest sanction bracket of the debt brake, the sanctions have repeatedly been complied with in a merely formal manner, having a minimal impact on the reduction of the general government debt:

• The government repeatedly submits a document to the parliament for discussion on the reasons for the size of the general government debt and a proposal for measures leading to its reduction. The CBR repeatedly warns that the document does not contain a sufficient list of specific measures to reduce the debt and fails in practice to meet the objective pursued by the sanctions, i.e., to reduce the general government debt below the sanction brackets. In fact, a document on the 2022 debt was not submitted at all, or more precisely, the government submitted a cumulative document for 2022 and 2023 in July 2024, which is not permitted under the constitutional act.
• The government blocked 3% of total state budget expenditures in May 2023; however, it did so for items that do not affect the general government balance. Again, this was only a formal compliance with the relevant provision of the constitutional act with no real impact on the reduction of the general government debt.
• The government had submitted a balanced budget proposal for 2024-2026 to the parliament, which was withdrawn after a temporary exemption from the application of the strictest sanctions of the debt brake was triggered. In the proposal, the government itself noted that the adoption and implementation of the balanced budget would cause a recession and jeopardise the functioning of the state, and explicitly stated that it saw the submission of the balanced budget proposal merely as the fulfilment of its legal obligation^[15].

According to the authors of the constitutional Fiscal Responsibility Act, the implementation of the measures triggered by the overrunning of the debt-brake sanction brackets should lead to a reduction of the public debt to a safe level. However, the measures adopted by individual governments have long fallen short of this objective. Experience has shown that governments are unwilling to truly comply with the constitutional act and regularly circumvent the sanctions under the debt-brake mechanism. In doing so, they ignore the purpose of the legislation, which is to achieve a sustainable fiscal performance of the Slovak Republic.

The Slovak Republic, that is, all its government bodies and public authorities, should protect the long-term sustainability of the country’s economy. If the economy is not sustainable in the long term, the state may not be able to properly ensure the protection of fundamental rights in the future, especially those that depend on public funding^[16]. When preparing a general government budget proposal and measures to safeguard the long-term sustainability of public finances, the government has discretion only within the limits set by generally binding laws and regulations^[17]. A merely formal approach to the interpretation and implementation of relevant constitutional standards is inadmissible. Such formal compliance with the constitutional act, without fulfilling its purpose, may be considered as its violation^[18].

According to the CBR’s medium-term estimate^[19], the gross debt will increase cumulatively by 10.7 p.p., from 56% of GDP at the end of 2023 to 66.8% of GDP at the end of 2028, if no additional consolidation measures are taken. The estimated increase in the general government debt is mainly driven by an extremely unfavourable development in the structural primary balance. The highest sanction bracket of the debt break will start at the level of 50% of GDP in 2028, which means that it will be exceeded by 16.8 p.p. Taking into account the two-year exemption from the application of the strictest debt-brake sanctions following the approval of the government’s manifesto of the new cabinet formed after the early parliamentary elections in the autumn of 2023, there is a serious risk that a balanced budget proposal for 2026, with no increase in expenditure, will have to be submitted again.

Public expenditure ceilings

In addition to the debt limit, the constitutional act had from the very beginning envisaged introducing an operative fiscal management tool – expenditure ceilings – as an imperative component of responsible fiscal performance. However, the legislation on the public expenditure ceilings did not come into force until 11 years after the adoption of the constitutional act. With effect from 1 April 2022, the public expenditure ceilings became a key budgetary tool to achieve long-term sustainability of public finances, but they were only valid until 31 July 2024 in this form.

In the two years of their effectiveness, the rule has not been effectively applied and expenditure ceilings have not been bindingly used as the main instrument to ensure long-term sustainability. Even though approved by the parliament, the public expenditure ceilings for 2023 were not reflected in the approved state budget due to an exemption applied in connection with the European rules of the Stability and Growth Pact^[20]. Subsequently, the approved general government budget for the years 2024 to 2026 was not prepared in compliance with the applicable expenditure ceilings^[21], in violation of the law.

Instead of bringing the budget into compliance with the expenditure ceilings in force, the government approved an amendment to the Act on the General Government Budgetary Rules which fully linked the public expenditure ceilings to the revised EU rules under the Stability and Growth Pact with effect from 1 August 2024^[22]. Public expenditure ceilings are now calculated by the Ministry of Finance on the basis of assumptions made by the European Commission.

According to the CBR, the adopted changes to the functioning of the expenditure ceilings are likely to be inconsistent with the concept of securing the long-term fiscal sustainability of the Slovak Republic as enshrined in Article 55a of the Slovak Constitution and in the constitutional Fiscal Responsibility Act. This represents a significant weakening of the existing regulatory framework because the public expenditure ceilings linked to the European rules do not sufficiently^[23] reflect on the need to achieve long-term stability over the 50-year horizon.

This change in the functioning of the ceilings may slow down or even postpone the permanent recovery of public finances. The new rule on public expenditure ceilings does not require any consolidation effort to be made in 2024, and may even be met if the long-term sustainability of public finances deteriorates. The consolidation of public finances should start from 2025, and its strictness will also depend on whether the European Commission allows that the consolidation effort be spread over more than four years. According to the CBR, the new ceilings may not be functional and flexible enough. They will also involve a lengthy corrective process in the event of non-compliance, will be less circumvention-proof and more rigid in times of crisis.

Specific provisions for local governments

The rules applicable to the local government sector aim to separate the responsibility for the solvency of local governments from the state, to ensure that their new tasks are financed by the state and to prevent excessive indebtedness on the part of local governments. For these reasons, the following three areas are evaluated: 1/ whether the state has not provided funds to ensure local government solvency; 2/ whether the state has devolved new tasks and competencies to local government without providing adequate financial coverage, and 3/ the size of the local government debt.

• The CBR notes that the state has not provided funding to ensure the solvency of local government. In 2023, the government did not provide any new loans to local governments but released them from loans granted in 2020^[24], temporarily improving their fiscal performance^[25]. The existing rules on the provision of non-repayable financial assistance from the state’s financial assets need to be amended in order to preclude the selective favouring of local governments and to prevent their future insolvency.
• According to the available information, no new tasks were assigned to the local government sector in 2023 which would have required funding from the state^[26]. However, the local government sector continues to face the negative effects of a major intervention in shared tax revenues (an increase in the tax bonus for children), the impact of which was not sufficiently assessed in advance by the government and parliament. The obligation to ensure adequate financial coverage under the constitutional act does not apply to changes in the existing local government competences that have no significant financial impacts. There are mechanisms in place through which local governments can raise funds in other ways (e.g., through tax hikes^[27] or by shifting costs on users of services)^[28]. Not using these mechanisms may indicate that funding problems are less urgent.

Any changes concerning the financing of local government must always be subject to a standard consultation procedure in accordance with the principles of transparency and effectiveness. It is also necessary to ensure that the impact of measures is consistently respected and monitored so that the central government authorities do not impose additional burdens on local government budgets without identifying them in the impact clauses, and at the same time to prevent any transfer of new tasks (whether in the exercise of original or delegated local government powers) to local government without adequate financial coverage.

• Administrative proceedings on the imposition of fines for 2022 on local governments with excessive debt^[29] were closed. While all self-governing regions ended up with debts below the prescribed limit, the fines were imposed on three of the 34 initially identified municipalities after legislative exemptions had been considered and reported values cross-checked. There are currently 27 municipalities at risk of fine for 2023; the values they reported are now under review. Further 38 municipalities were contacted because they had not submitted the required financial reports. In 2023 too, the debts of all self-governing regions stood below the statutory limit. The Ministry of Finance assessed the compliance with the local government debt rule, with the possibility to impose a fine, for the first time for 2015, but not a single evaluation has been disclosed so far. The CBR recommends that the Ministry of Finance discloses^[30] all information related to reviewing the size of local government debts, and imposing the fines, in a transparent manner.

Fiscal transparency rules

The fiscal transparency rules defined by the constitutional act were almost fully complied with. Macroeconomic and tax revenue forecasts were approved by competent independent committees and published within the deadlines specified in the constitutional act. The 2024-2026 general government budget contained all the data required by law, except for the information about a majority of companies with capital participation of the Ministry of Health of the Slovak Republic (healthcare facilities and Všeobecná zdravotná poisťovňa health insurer). The summary annual report for 2022 contained all the data required by law.

In addition to the requirements defined by law, the CBR also assesses the budget transparency in terms of comprehensibility and quality of the information contained in the assessed documents, consistent application of the ESA2010 methodology, and the measure of parliament’s control over the approval and fulfilment of the budget. These areas were also the focus of the CBR’s recommendations in its August 2023 report, but apart from a slight improvement in the comparability of the budget with reported data and the planned refinement of the quantification of net worth, no progress has been made in these areas. On the contrary, transparency has actually decreased as a result of the applicated use of the ESA2010 methodology and a move away from compiling budget expenditures on the basis of no-policy-change scenarios.

According to the CBR, the main persisting issues, the amendment of which could lead to further qualitative improvements in fiscal transparency and the overall budgetary process, include:

• The general government budget was not prepared in compliance with the budgetary objectives for the years of 2024 to 2026. In 2024, the budgetary objective set by the government was fulfilled by accounting for part of the emergency energy support measures financed from EU funds, which was inconsistent with the ESA2010 principles given the timing of such emergency support in 2023. In addition, the budget lacked specific consolidation measures for the next two years (in the amount of 1.1% and 1.6% of GDP, respectively).
• The CBR has repeatedly noted that the existing legislative framework governing the budget approval procedure in the parliament does not fit the scope and content of the documents that are being approved. Approving a cash-based (only) state budget by the parliament for the next year is based on a historical tradition, but this is no longer sufficient to capture the key monitored parameters of public finances and all changes in public finances in accordance with ESA2010 and the best international practice.
• The expenditure side of the budget should be based more on a no-policy-change (NPC) scenario for the next three years, as required in the past under the Act on General Government Budgetary Rules^[31]. In the previous years, this approach was used only for the budgeting of expenditures of health insurance companies, which allowed a transparent assessment of the basic assumptions used in the preparation of the health sector budget, including the impacts of the measures included. The general government budget for 2024-2026 did not include such information even for expenditures in the healthcare sector^[32].
• Better information should be provided for state-owned enterprises. A brief commentary on expected economic results of individual enterprises could enable better assessing any potential risks arising from the performance of enterprises owned by the state directly or through MH Manažment, a.s.
• The information value of the net worth indicator could be enhanced by the valuation of net worth components not yet quantified, which the Ministry of Finance is currently working on^[33]. A broader analysis of the impact of government measures on the net worth will require the adoption of appropriate technical arrangements for the collection of data and the definition of methodology (in collaboration with the CBR) for linking the net worth change to the budget balance.

[1]      Constitutional Act No. 493/2011 Coll. on fiscal responsibility.

[2]      Under constitutional Act No. 422/2020, Article 55a was added to the Constitution of the Slovak Republic (460/1992 Coll.), effective from 1 January 2021.

[3]      CBR, Report on the Long-Term Sustainability of Public Finances for 2023, April 2024, (only Summary of the Report is available in English).

[4]      The CBR quantified that the public expenditure ceiling for 2023 was exceeded by almost 1 billion euros (0.8% of GDP), mainly as a result of a permanent increase in public spending on the 13^th pension payments and health care, which worsened the sustainability of public finances by 0.6% of GDP. Even though the rule was not binding, the legislation in force assumed that even in such a situation, the long-term fiscal sustainability should not have been at risk.

[5]      According to the Ministry of Finance’s opinion, there was no expenditure ceiling in force at the time of the preparation of the 2024-2026 general government budget proposal because the ceiling approved for the years of 2023 to 2025 only applied to the previous election term and no expenditure ceiling was approved for the new election term. According to the CBR’s legal opinion (available only in Slovak), this is a misinterpretation of the law. The expenditure ceiling for 2023 to 2025, as passed by a parliamentary resolution, has not become ineffective with the start of the new election term and remains to be binding for the government when preparing a budget until a new ceiling is approved. Otherwise, it would be too easy to circumvent the expenditure ceiling mechanism.

[6]      The positive medium-term impact of the measures included in the budget for 2024 and/or adopted during 2024 in taxes and social contributions (the introduction of a special bank levy, a temporary increase in health care contributions, a reduction in contributions to the 2^nd pension system pillar, higher excise tax rates, introduction of the tax on sweetened beverages) is more prominent but largely used to finance new expenditure-side measures (introduction of the 13^th pension payments, increase in health care spending). Their negative impact on long-term sustainability is mainly caused by the fact that a significant portion of the revenues is only temporary (until 2027). According to the CBR’s evaluation released in January 2024, the government’s permanent measures included in the budget contribute 0.5% of GDP to the deterioration of fiscal sustainability.

[7]      EU Member States may agree with the European Commission on a reasonable extension of the deadline for the submission of their national medium-term fiscal-structural plans.

[8]      The new European rules do not guarantee that a slowdown in expenditure growth will be fully reflected in a permanent recovery of public finances, as they do not sufficiently distinguish between permanent and temporary measures (e.g. a reduction in contributions to the fully-funded pension system pillar, the abolition of emergency energy support subsidies or a temporary increase in taxes).

[9]      Building on the presumption of a rational legislator, the constitutional Fiscal Responsibility Act was approved in the belief that its provisions would be complied with in order to ensure the achievement of long-term sustainability of the Slovak economy, and not that it would be applied in a way that would circumvent compliance and ignore its substance.

[10]    The highest sanction bracket in 2022 implies that the gross debt relative to GDP is higher than 55% of GDP, inclusive.

[11]    The debt-to-GDP ratio for 2023 will definitively be confirmed in the autumn notification to be published in October 2024.

[12]    The obligation to apply the sanctions triggered by the overrunning of the third, fourth and fifth sanction bracket under the debt brake does not apply for a period of 24 months following the approval of the government’s manifesto and a vote of confidence in the government. The parliament approved the government’s manifesto for 2021-2024 on 4 May 2021, therefore, the obligations arising from exceeding the above-mentioned sanction brackets under the constitutional Fiscal Responsibility Act started to apply from 5 May 2023. Following the general election held on 30 September 2023, the parliament approved the government’s manifesto for years 2023 to 2027 and voted confidence in the new cabinet on 21 November 2023, triggering the 24-month exemption anew.

[13]    The reason given by the Ministry of Finance for not submitting this document by the end of 2023 was the late formation of the government after the general elections, with the absolute priority being given to the preparation and approval of a new budget in order to avoid a provisional budget situation. According to the Ministry of Finance, the subsequent postponement of its submission was due to the search for a political agreement on consolidation measures. As a result, the document was submitted to the government for discussion as late as 10 July 2024. However, according to the CBR, the document reflects the size of debt reported for 2023 and cannot at the same time be considered as a fulfilment of the sanction triggered by the size of debt reported for 2022, as sanctions shall be applied annually.

[14]    The new government was appointed by the Slovak president on 15 May 2023. The government had submitted its manifesto to the parliament for discussion and asked MPs for a vote of confidence which was then held on 15 June 2023, thus also complying with the sanction required by the constitutional law. The parliament did not approve the government’s manifesto and did not vote for confidence in the government. The constitutional consequence of the government failing to pass a vote of confidence is its dismissal. On 15 June 2023, the government had therefore been formally dismissed but immediately entrusted with the exercise of governmental powers until the formation of a new government that was formed after the early parliamentary elections held on 30 September 2023.

[15]    The balanced budget proposal was achieved solely through cuts in general government expenditures of around 11 billion euros. In its opinion (available only in Slovak), the CBR considered this approach to budget compilation to be overly simplistic and unsupported by analytical data. The government did not put enough effort into preparing the budget proposal and only formally complied with the requirement anchored in the constitutional act. On the other hand, the CBR was aware that a new government would most likely be formed by the end of 2023, which would trigger the exemption from the application of the balanced budget sanction, effectively reducing the importance of preparing a balanced budget.

[16]    Finding of the Constitutional Court of the Slovak Republic, case no. PL. ÚS 13/2022, paragraphs 158 and 159.

[17]    The government must use this discretionary power in a way that it agrees with itself in order to be ready to fulfil in good faith the measures it will propose. At the same time, state authorities are bound not only by the wording but also by the intent and purpose of respective legislation.

[18]    Practical compliance with the law before formalism was highlighted by the Constitutional Court of the Slovak Republic for example with respect to the CBR’s tasks in the reasoning for its finding in case no. PL. ÚS 13/2022. The Constitutional Court also noted that the constitution was not a document containing normatively irrelevant proclamations, the meaning of which is determined only by subsequent law-making activities, but it is an authentic set of directly applicable standards, principles and values with their specific implications and consequences.

[19]    CBR, Medium-Term Traffic Lights, July 2024 (available only in Slovak).

[20]    According to the CBR’s evaluation (available only in Slovak), the expenditure ceiling applicable for 2023 was exceeded by 1.0 billion euros (0.8% of GDP), mainly due to the permanent increase in expenditures on the 13^th pension payments and health care. The planned target of the expenditure ceiling for 2023 was to improve long-term sustainability by 0.2% of GDP, but the actual development in expenditures covered by the expenditure ceiling contributed 0.6% of GDP to the deterioration of long-term sustainability in 2023.

[21]    As the public expenditure ceiling submitted by the CBR to the parliament on 15 December 2023 had not been approved by the time the government and the parliament passed the budget, the expenditure ceiling approved by parliamentary resolution no. 1964 passed on 1 February 2023 was still valid. The CBR noted in its opinion (available only in Slovak) regarding the legally binding nature of the public expenditure ceilings that the expenditure ceiling approved on 1 February 2023 had not become invalid with the end of the election term.

[22]    The parliament approved this amendment in a fast-track legislative procedure on 9 May 2024. The public expenditure ceilings should be calculated in accordance with the European fiscal rules during the preparation of a general government budget for the years of 2025 to 2027. For 2024, the amendment sets expenditure ceilings based on Council Recommendation of June 2023 which recommends that the growth in net nationally financed primary expenditure should not exceed 5.7%.

[23]    The new European rules require compensations for estimated costs related to population ageing over a ten-year horizon only, while they do not guarantee that a slowdown in expenditure growth will be fully reflected in a permanent recovery of public finances, as they do not sufficiently distinguish between permanent and temporary measures (e.g. a reduction in contributions to the fully-funded pension system pillar, the abolition of emergency energy support subsidies or a temporary increase in taxes).

[24]    In 2023, the government forgave the loans taken by local governments in the form of repayable financial assistance. These funds had originally been provided by the government to municipalities and self-governing regions to compensate for the loss of personal income tax revenues caused by the COVID-19 pandemic.

[25]    The forgiven loans were quite evenly distributed among the self-governing regions and larger municipalities. However, some towns/cities and municipalities did not apply for loans at all, and/or were not granted any, while others received significantly less. An ex-post evaluation has shown that the funds provided to cover the loss of local government revenues caused by the COVID-19 pandemic were not distributed fairly and according to criteria clearly defined in advance, to the detriment of those municipalities and towns/cities that had not applied for loans.

[26]    The provision of the constitutional Fiscal Responsibility Act on ensuring the adequate funding of local governments with respect to new tasks applies to new tasks in the performance of local governments’ original powers. The funding of new tasks within the competencies devolved from the central government is guaranteed by the Constitution (Article 71(1)): “Performance of designated tasks of the local state administration may be devolved to a municipality or a higher territorial unit by law. The costs of performance of such powers devolved from the central government are paid by the state.”.

[27]    Slovakia has low real estate tax rates compared to other countries, which leaves room for an increase.

[28]    The current wording of the constitutional act contains no objective criteria the CBR could use to clearly assess compliance with the constitutional act. The impact of the devolved competencies on the budgets of local governments cannot be objectively assessed due to the lack of a comparative basis. In order to make the constitutional act effective in this area, an audit needs be carried out to assess the current situation concerning the competencies of local governments and their financial coverage by the state. Among other things, the CBR considers it important to evaluate the effects of measures in the context of a longer period of time, as well as with regard to how these tasks change over time, including in relation to their financial resources.

[29]    Overrunning the debt limit of 60% of current revenues in the previous year.

[30]    The CBR does not have at its disposal the revised final data on the size of debt of the municipalities, which the Ministry of Finance collected by verifying the reported values in the identified municipalities.

[31]    According to the second sentence of Section 4(2) of Act No. 523/2004 on the general government budgetary rules: “A general government budget shall be prepared and implemented in accordance with public expenditure ceilings based on no-policy-change scenarios.” However, this provision has been deleted from the act with effect from 1 August 2023 (but was still in force at the time of the adoption of the budget). The reason given by the Slovak Ministry of Finance for this change is that it is necessary to ensure the fulfilment of obligations approved in a medium-term fiscal-structural plan in accordance with the new European rules. However, in the CBR’s opinion, preparing the budget on the basis of NPC scenarios does not contradict the requirement to prepare the budget in compliance with the new European rules (it is the measures beyond the NPC scenario that ensure that the required rate of expenditure growth is achieved).

[32]    Upon request, the Ministry of Finance provided the CBR with an underlying document structured according to the development in health expenditures under the NPC scenario and additional measures.

[33]    The Ministry of Finance has confirmed in a letter that it is actively working on the methodology for the Net Worth Concept of the Slovak Republic, currently focusing on three unmapped areas that have not yet been reported and quantified – the valuation of Slovakia’s cultural heritage worth, ecosystems and ecosystem-related services in Slovakia, and nature protected areas (forests, waters, fauna and flora).

Príspevok Report on Compliance with the Fiscal Responsibility and Fiscal Transparency Rules for 2023 (Summary) je zobrazený ako prvý na Rada pre rozpočtovú zodpovednosť.

The evaluation report on the compliance with the fiscal responsibility and fiscal transparency rules annually assesses, always by 31 August, the compliance with the rules under the constitutional Fiscal Responsibility Act^[1] for the previous year. In addition to evaluating the development of long-term sustainability of public finances, the most significant objective pursued by the act, it also assesses compliance with the constitutional debt limit, as well as other statutory obligations, especially in the area of information disclosure, local government debt, and the funding of local governments’ competences.

Long-term sustainability of public finances

The key objective of fiscal responsibility is to achieve sustainable public finances. The protection of long-term sustainability of Slovakia’s economic performance, taking into account the compliance with the principles of transparency and effectiveness of public spending, was enshrined in an amendment to the Constitution of the Slovak Republic^[2] in 2020.

In its evaluation^[3], the Council noted that the long-term sustainability of public finances, taking into account the most recent medium-term balance estimate of May 2023, has not been achieved. The long-term sustainability indicator reached 5.9% of GDP, which implies that public finances are in the high-risk zone. Therefore, a permanent revenue increase and/or expenditure reduction of EUR 7.6 billion would be needed to ensure long-term sustainability.

Given the poor state of public finances – affected also by external factors beyond the government’s control (the security and energy crisis) in addition to the adopted measures having a negative impact on the balance, the government should start working as soon as possible towards improving sustainability. In addition, the necessity of improving the long-term sustainability is augmented by the current high level of gross debt which is now, for the third year in a row, above the highest sanction bracket of the debt brake. In the medium term, even the estimate of an exceptionally strong inflation effect, along with the projections of real economic growth, are not expected to outweigh the very unfavourable outlook for public finances. Without taking additional consolidation measures, the current debt level will pose an increasing risk to the sustainability of public finances. It is therefore essential to prepare and implement a credible plan for a gradual, albeit reasonably ambitious consolidation of public finances over the medium term.

Long-term sustainability could also be improved with the contribution of an effective implementation of expenditure ceilings. In fact, the expenditure ceiling for 2023 does not constitute a binding rule due to an exemption currently applied as a result of the rules under the EU’s Stability and Growth Pact; however, as from 2024, when this exemption is expected to expire, the ceilings could secure a gradual improvement in long-term sustainability.

It should be added, though, that compliance with expenditure ceilings, in and of itself, at the minimum level required by law for improving the long-term sustainability^[4] will not be sufficient for stabilising the debt in the medium term^[5] and, from this perspective, the consolidation of public finances should be more ambitious.

The current wording of the constitutional act has not provided sufficient protection of long-term sustainability in particular due to the formal approach of governments, as well as of the parliament, when it comes to the fulfilment of debt brake sanctions; therefore, it would be advisable to amend the constitutional act in a manner that reflects the current debt trends and the need for effective liquidity management while at the same time ensuring that the debt brake combined with expenditure ceilings become an effective instruments for improving long-term sustainability. For this reason, it was with great regret that the Council took note of the fact that, after two years of delays, the vote on an amendment to the constitutional Fiscal Responsibility Act, which had been prepared for quite some time, was put off to the next election term. The promises that the debt brake would be updated along with enacting the national fiscal responsibility rules (including expenditure ceilings) within a single constitutional law have thus not been met.

The Council warns that the current situation also translates into a lack of synergy between the debt brake sanctions and expenditure ceilings, and thus the intended remedial effects of the national rules on public finances could be left unused.

Fiscal responsibility rules

In order to achieve long term sustainability of public finances, the law assumes the existence of expenditure ceilings and the general government debt limit (the so-called debt brake). Both of these instruments are expected to contribute to achieving the long-term sustainability of public finances.

General government debt limit

The debt-to-GDP ratio in 2021 and 2022 has exceeded the highest debt brake level, i.e., surpassing the fifth sanction bracket^[6]. Based on data published by Eurostat in October 2022, the debt reached 61.0% of GDP at the end of 2021 and, based on preliminary^[7] data from April 2023, 57.8% of GDP at the end of 2022.

As the 24-month exemption from the application of stricter sanctions under the constitutional act^[8] has expired on 5 May 2023, the debt level for 2021 was only subject to the sanctions applicable to overrunning the second sanction bracket of the debt brake while the exemption was still in effect.

The debt level achieved for 2022 is currently associated with sanctions resulting from overrunning all of the five sanction brackets of the debt brake. The debt brake sanctions are applied cumulatively, starting with the sanctions for overrunning the second bracket up to the highest sanction bracket.

Compliance with the above sanctions will also be affected by the approval of the government’s manifesto after the early parliamentary elections to be held on 30 September 2023. The approval of the government’s manifesto and the vote of confidence in the government will re-trigger the 24-month exemption from compliance with the sanctions applicable between the third and fifth sanction bracket of the debt brake.

Despite the high levels of the general government debt, which have been continuously hovering above the highest sanction bracket of the debt brake since 2020, compliance with the sanctions has recently been only formal, with a minimum impact on the reduction of the general government debt:

• The government submits to the parliament, on a repeated basis, a document concerning the justification of the general government debt level and a proposal for debt-reduction measures. In its opinions^[9] in the past, the Council has been pointing out that this document does not contain a sufficient number of specific debt-reduction measures, which means that, in reality, the purpose of sanctions, i.e., reducing the general government debt below the sanction brackets, is not met. Moreover, the latest proposal was submitted to the parliament with a 10-month delay after the publication of the debt level; such a timeframe is not reasonable given the size of the debt.
• In May 2023, the government cut 3% of total state budget expenditure, but did so only for items with no impact on the general government balance. Again, such compliance with the provision of the constitutional act was only a formal one, with no impact on the reduction of the general government debt whatsoever.

Over the medium term, the CBR estimates^[10] that, without additional measures, gross debt will cumulatively increase by 7.3 p.p. from 57.8% of GDP at the end of 2022 to 65.1% of GDP in 2027. The estimated increase in general government debt is mainly due to very unfavourable developments in the structural primary balance. The highest sanction bracket based on the debt brake will start at 50% of GDP in 2027, which means that the debt would be 15.1 p.p. above this threshold. Taking into account the 2-year exemption from the application of the most stringent sanctions of the debt brake following the approval of the new government’s manifesto after the early general elections held in the autumn, there is a serious risk of a renewed need to present a balanced general government budget proposal with no increase in expenditure for 2026.

Public expenditure ceilings

In addition to the debt limit, the constitutional act had from the very beginning envisaged introducing an operative fiscal management tool – expenditure ceilings – as an imperative component of responsible fiscal performance. Since the adoption of the constitutional act, it took more than ten years to make the public expenditure ceiling – effective from 1 April 2022 – the key budgetary instrument to achieve the long-term sustainability of public finances. The ceilings were to be applied for the first time with regard to the general government budget for 2023-2025; however, this did not happen due to the absence of an agreement on the ceiling calculation methodology. The Ministry of Finance and the CBR reached an agreement on the methodology for calculating, updating and evaluating compliance with the expenditure ceiling as late as on 22 December 2022, only a few hours after the approval of the 2023 State Budget Act in the parliament. Immediately after reaching the agreement, the CBR calculated and submitted to the parliament the public expenditure ceilings for the years 2023 to 2025. The submitted ceilings were approved by the parliament on 1 February 2023. After the parliament passed an amendment to the Act on General Government Budgetary Rules and, subsequently, the public expenditure ceilings, the situation encompassing an infringement of the constitutional act^[11] has been remedied. On 22 December 2022, the parliament also approved an exemption from the obligation to bring the budget in line with the expenditure ceiling for as long as the European general escape clause remains activated. Therefore, in view of the currently applicable general escape clause activated by the European Commission, the government is not required to align the 2023 budget with the ceiling approved by the parliament.

Therefore, the public expenditure ceiling is not contributing this year to improving the long-term sustainability of public finances as the primary objective of the rule. The first ceilings were, unusually, calculated in the middle of the election term and, considering the fact that a number of measures significantly deteriorating the development of public finances in the medium term^[12] had been adopted in the course of 2022, the consolidation of public finances as required by the ceilings was based on a worsened baseline. At the same time, due to the general escape clause being in force during 2023, the government is not required to bring the budget in line with the applicable ceiling. As a consequence, 2023 saw the adoption of a number of other legislative changes causing a permanent increase in expenditure (e.g., subsidies for lunches in schools, support for research and innovation, the School Act) without the need to compensate for their impacts, which is likely to result in significantly overrunning the ceiling^[13] valid for 2023. Any consolidation of public finances that is likely to take place in the future will be based on a starting position which incorporates all the measures adopted between 2022 and 2023.

Enacting the expenditure ceilings by a constitutional law would considerably strengthen their binding nature, as originally envisaged under the draft amendment to the constitutional Fiscal Responsibility Act. It would significantly reduce the risk of this instrument being vulnerable to changes that could undermine or completely cancel its capability to ensure the effective fulfilment of the main purpose of expenditure ceilings.

Specific provisions for local governments

The rules applicable to local governments are aimed at separating the responsibility for their solvency from the state, securing the funding of their new tasks by the state and preventing the excessive indebtedness of local governments. For this reason, the following three aspects are evaluated: 1/ whether the state has intervened financially to safeguard the solvency of local governments; 2/ whether the state has assigned new tasks and competencies without providing adequate financial coverage, and 3/ the amount of the local government debt.

• The CBR notes that the state did not financially intervene to safeguard the solvency of local governments. In 2022, local governments did not receive loans from the state, that would improve their financial performance^[14]. However, it is still necessary to adopt legislative changes that will set the rules even in this area in order to prevent any selective preferential treatment of local governments while avoiding their insolvency in future.
• In the course of 2022, according to available information, the local government sector was not assigned any new tasks which would have required funding from the state^[15]. However, there was a significant intervention affecting the revenue from shared taxes (an increase in the child tax bonus), the impacts of which had not been sufficiently assessed beforehand by the government and parliament. According to the constitutional act, the obligation to ensure adequate financial resources does not apply to changes in the existing competencies of the local governments that have no significant financial effects; there are mechanisms in place which a local government may use to obtain resources in another way (e.g., by increasing taxes^[16] or shifting the burden of costs on recipients of services)^[17]. The failure to use these mechanisms may indicate that problems with funding are less urgent.

However, 2022 saw submissions and rulings of the Constitutional Court regarding the so-called “family package” measures, water supply connectors and environmental burdens which are important in terms of adequate funding for local governments. The rulings of the court indicate that, in line with the principle of transparency and efficiency, any changes which affect the funding of local governments must always be subject to a standard review procedure. It is also necessary to strictly observe and monitor the effects of measures so that the central government authorities do not create additional burden on local governments’ budgets without identifying such impacts in impact clauses, while at the same time preventing that new tasks are shifted (be it in terms of exercising the original powers or the powers conferred on local governments) onto local governments without providing adequate financial coverage^[18].

• Administrative proceedings on the imposition of fines for 2021 on local governments with excessive debt^[19]were closed. While all self-governing regions ended up with debts below the prescribed limit, the fines were imposed on 15 of the 43 initially identified municipalities after legislative exemptions had been considered and reported values cross-checked. There are currently 28 municipalities at risk of fine for 2022; the values they reported are now under review. Further 46 municipalities were contacted because they had not submitted the required financial reports. In 2022, too, the debts of all self-governing regions stood below the statutory limit. The Ministry of Finance assessed the compliance with the local government debt rule, with the possibility to impose a fine, for the first time for 2015, but not a single evaluation has been disclosed so far. The CBR recommends that the Ministry of Finance disclose^[20] all information related to reviewing the size of local government debts, and imposing the fines, in a transparent manner.

As from 1 August 2023, an amendment to Act No. 583/2004 Coll. on the Local Government Budgetary Rules entered into force, introducing the possibility to relieve the local government of its debts where they cannot be fully recovered under receivership, which means that, after 20 years, the outstanding amount of the debt will become unenforceable^[21]. Despite the fact that, in its report, the CBR recommended the adoption of measures aimed at restructuring the debts of municipalities (without providing a specific proposal), the approved solution seems to be problematic in terms of legislation, as the Ministry of Finance presented in its opinion. According to the Ministry of Finance, such a legislative change has no backing in terms of its practical application and is incompatible with the legal system of the Slovak Republic^[22], while there is a risk of lawsuits against the Slovak Republic by creditors if unpaid debts become unenforceable after 20 years.

Fiscal transparency rules

The fiscal transparency rules defined by the constitutional act were fulfilled almost in full extent. Macroeconomic and tax revenue forecasts were approved by competent independent committees and published within the deadlines specified in the constitutional act. The 2023-2025 general government budget contained all the data required by law, save for the information about a majority of companies with capital participation of the Ministry of Health of the Slovak Republic (healthcare facilities and Všeobecná zdravotná poisťovňa health insurer). The summary annual report for 2021 contained all the data required by law.

In addition to the requirements defined by law, the CBR also assesses the budget transparency in terms of comprehensibility and quality of the information contained in the assessed documents, consistent application of the ESA2010 methodology, and the measure of parliament’s control over the approval and fulfilment of the budget. These areas were also covered by the CBR’s recommendations contained in its August 2022 report, in which case, however, no progress has been made, apart from a slight improvement in the comparability of the budget with reported data.  

The continued efforts to streamline public investment through zero-based budgeting and to improve CBR’s access to data from other institutions, which is necessary for fulfilling its mandate and high-quality analytical outputs^[23], can be regarded positively.

According to the CBR, the most important ongoing issues, resolving which could lead to further qualitative enhancements in fiscal transparency and the entire budgeting process, are as follows:

• Multiannual budgeting is still absent. The budget proposal is compiled in accordance with the budgetary objective only for 2022, but not for the years to follow. The key fiscal indicators (structural balance, gross and net debt forecasts) were repeatedly presented under the assumption of meeting the budgetary objectives with no measures specified, thus showing the public finances in a better shape than they actually are.
• In compiling the expenditure side of the budget proposal, the focus should be more on the no-policy-change scenario for the next three years, as foreseen in the Act on the General Government Budgetary Rules^[24]. At present, the budget proposal is presented in this manner only with regard to the expenditure of health insurance companies, which allows for a transparent assessment of assumptions for drawing up the health sector budget, including the impacts of implemented measures. The same procedure should also be extended to other areas.
• The CBR has repeatedly noted that the existing legislative framework governing the budget approval procedure in the parliament does not fit the scope and content of the documents that are being approved. The approval of a cash-based state budget (alone) by the parliament for the upcoming year^[25] is based on a historical tradition, but is no longer sufficient to capture the key monitored parameters of public finances and all changes in public finances in accordance with the European standards defined by the ESA2010 methodology, including the expenditure ceilings. 
• Important legislative changes are repeatedly adopted by the parliament even after the government approves the budget proposal and submits it to the parliament. In terms of transparency of tax revenues presented in the budget, this approach cannot be considered correct. Less transparent decision-making as regards inclusion of measures in the general government budget makes it difficult to evaluate the budget in terms of compliance with the declared objectives for the budget balance. In addition, several tax measures have been adopted within a fast-track procedure, many of them as amendments to unrelated laws. Such approach is not in line with the Act on the Rules of Procedure of the National Council of the Slovak Republic^[26].
• Better information could be provided for state-owned enterprises. A brief commentary on expected economic results of individual enterprises would make it possible to better assess any potential risks arising from the performance of enterprises owned by the state, either directly or through MH Manažment, a.s.
• The information value of the net worth indicator could be enhanced by the valuation of net worth components not yet quantified. A broader analysis of the impact of government measures on the net worth will require the adoption of appropriate technical arrangements for the collection of data and the definition of methodology (in collaboration with the CBR) for linking the net worth change to the budget balance.

^[1]      Act No. 493/2011 on Fiscal Responsibility.

^[2]      Under constitutional act No. 422/2020 Coll., Article 55a was added to the Constitution of the Slovak Republic (460/1992 Coll.), effective from 1 January 2021.

^[3]     CBR, Medium-term Fiscal Outlook for 2023-2026, May 2023.

^[4]      The law requires an annual improvement of the long-term sustainability indicator by 0.5% of GDP for the medium- and high-risk zones of long-term sustainability. From the CBR’s point of view, such a requirement does not sufficiently reflect the severity of the situation where public finances fall within the high-risk zone. Therefore, in preparing the law, the CBR preferred a stricter requirement for improving the long-term sustainability (by 0.75% of GDP per year) when public finances enter the high-risk zone.

^[5]      Based on CBR’s simplified calculation, when meeting the expenditure ceilings between 2024 and 2026 (i.e., the ceilings submitted by the CBR to the parliament on 30 June 2023 as an update to the applicable ceilings, including an assumption that achieving a balanced budget in 2024 is not necessary), the debt would increase from 57.0% of GDP in 2023 to 59.9% of GDP in 2026.

^[6]      In 2021, the highest sanction bracket was defined as gross debt-to-GDP ratio being equal to or higher than 56% of GDP.

^[7]      The debt-to-GDP ratio for 2022 will definitively be confirmed in the autumn notification to be published in October 2023.

^[8]      The obligation to apply the sanctions triggered by the overrun of the third, fourth and fifth sanction bracket under the debt brake does not apply to the period of 24 months from the approval of the government’s manifesto. As the parliament approved the 2021-2024 government’s manifesto on 4 May 2021, the obligations arising from overrunning the said sanction brackets of the constitutional Fiscal Responsibility Act were first applied as from 5 May 2023.

^[9]      For example: CBR, Opinion on the proposal of measures reducing the public debt, 15 March 2023 (available only in Slovak).

^[10]    CBR, Medium-term Traffic Lights, version 2023/07, July 2023 (available only in Slovak).

^[11]    GIBA, M., BUJŇÁK, V.: Constitutional-law analysis of selected provisions of the constitutional Fiscal Responsibility Act of 31 July 2020, p. 29: “If there are currently no expenditure ceilings in place, whose existence is envisaged under Article 7(3) in conjunction with Article 1 of the constitutional Fiscal Responsibility Act, it is an unconstitutional situation the responsibility for which is borne by those authorities that have an obligation to set up such ceilings in an appropriate manner. They must be intensively reminded of this fact, while stressing that it is not a trivial issue but rather a matter of complying with the state’s constitutional rules.”

^[12]    At the time of calculating the ceiling, the permanent negative impacts of measures adopted during 2022 (e.g., the family package, increased wages in the healthcare, education and public administration sectors, parental pension) were estimated at 2% of GDP in 2023, 1.8% of GDP in 2024 and 1.6% of GDP in 2025.

^[13]    In May 2023, the CBR estimated that expenditure falling under the public expenditure ceiling would exceed the ceiling by EUR 285 million in 2023. In its most recent estimate of August 2023, indicating a higher deficit, the Ministry of Finance quantified the possible overrun of the ceiling by as much as EUR 1.1 billion. The previous extraordinary indexation of pensions means that their increase occurs six months earlier, without having a significant negative impact on the long-term sustainability, i.e. not even falling under the public expenditure ceiling.

^[14]    In 2022, the Ministry of Finance adjusted the instalment schedule for Bardejov under the agreement on repayable financial assistance of 2018.

^[15]    The provision of the constitutional Fiscal Responsibility Act on ensuring the adequate funding of local governments with respect to new tasks applies to new tasks in the performance of local governments’ original powers. The funding of new tasks within the competencies devolved from the central government is guaranteed by the Constitution (Article 71(1) of the Constitution: “Performance of designated tasks of the local state administration may be devolved to a municipality or a higher territorial unit by law. The costs of performance of such powers devolved from the central government are paid by the state.”).

^[16]    From an international perspective, property tax rate in Slovakia is low and there is room for increasing this tax.

^[17]    The current wording of the constitutional act contains no objective criteria the CBR could use to clearly assess compliance with the constitutional act.  The impact of the devolved competencies on the budgets of local governments cannot be objectively assessed due to the lack of a comparative basis.  In order to make the constitutional act effective in this area, an audit needs to be carried out to assess the current situation concerning the competencies of local governments and their financial coverage by the state. Among other things, the CBR considers it important to evaluate the effects of measures in the context of a longer period of time, as well as with regard to how these tasks change over time, including in relation to their financial resources.

^[18]    This could be enhanced by extending the Unified Methodology for the Assessment of Selected Impacts, approved by the government in June 2022. Based on this change, the impact clause already recognises the impact of government’s document on the budgets of municipalities and self-governing regions, including the impact of new tasks devolved to local governments within the meaning of Article 6(2) of the constitutional Fiscal Responsibility Act.

^[19]    Overrunning the debt limit of 60% of current revenues in the previous year.

^[20]    The CBR does not have at its disposal the revised final data on the size of debt of the municipalities, which the Ministry of Finance collected by verifying the reported values in the identified municipalities.

^[21]    This draft act was approved through an amendment to the bill proposed by MPs, where significant changes were made compared to the bill which passed the first reading in the parliament and which was discussed by parliamentary committees and within the inter-ministerial review procedure.

^[22]    According to the Ministry of Finance, the amendment is in conflict with the applicable competence law, because the legislation governing the insolvency law of local governments falls within the remit of the Ministry of Justice rather than the Ministry of Finance. The Ministry of Finance is afforded the right to decide on proposals for the consolidation of claims, including the right to approve the municipality’s consolidation plan after it is approved by the municipal council, while the procedures that may lead to the extinction of creditors’ claims can only be carried out, within the existing legislative framework of the Slovak Republic, by an independent court.

^[23]    Even though the constitutional Fiscal Responsibility Act (Article 4(2)) grants the CBR the right to request the general government entities to cooperate in the provision of the data related to the performance of their duties, however, this provision was insufficient in practice to ensure that the requested entities provide the necessary data. To that end, relevant laws governing a specific domain have been amended to include an express obligation to provide data to the CBR.

^[24]    The second sentence of Article 4(2) of the Act on the General Government Budgetary Rules reads as follows: “The general government budget shall be drawn up and implemented in accordance with the public expenditure ceiling based on no-policy-change scenarios.“

^[25]     One example could be an increase in health care expenditure through an amendment to the State Budget Act adopted in 2023 to cover the agreed increased wage demands in the sector. Although this is not a one-off increase applicable only to 2023, it is not reflected under increased budget expenditure in 2024 and 2025, according to information from the Ministry of Finance.

^[26]    Pursuant to Article 94(3) of Act No. 350/1996 Coll. on the Rules of Procedure of the National Council of the Slovak Republic: “During a debate on a bill, it is not possible to submit a proposal amending or supplementing another law that is unrelated in content to the bill under discussion.”

Príspevok Report on Compliance with the Fiscal Responsibility and Fiscal Transparency Rules for 2022 (Summary) je zobrazený ako prvý na Rada pre rozpočtovú zodpovednosť.