Transcript | 7. lecture: The Radičová’s government (Ivan Mikloš) - University for modern Slovakia

The result of elections in 2010 was surprisingly good for right and pro-reforms voters. These elections allowed creating a centre-right government consisting of the Slovak Democratic and Christian Union – the Democratic Party, Freedom and Solidarity, Bridge-Híd and the Christian Democratic Movement.

In connection with this coalition there were great expectations, especially considering a change of an economic course, a consolidation of public finances, improving a business environment and necessary changes in judiciary, law-enforcement, a reduction of corruption etc. These expectations were legitimate and based especially on a fact that three of four parties in the coalition were a part of the most successful and most reformed second Dzurinda’s government (although the Bridge-Híd had appeared under a different name). The fourth party, the liberal Freedom and Solidarity introduced themselves as a strongly pro-reform party.

De facto it was the same coalition as in 2002 – 2006, with a slight difference – instead of Rusko’s party there was Sulík’s party.

The greater expectations, the greater disappointment came due to the way how this government governed, but especially due to the fact that after a year and a half this government ended up as no government so far. This disappointment then significantly signed under election results in March 2012 and under the current state of a single-party government of the Direction-SD. About the present situation we will speak in the following lecture. Now we are going to deal with results of the Radičová’s government and reasons why the government ended up prematurely.

The Radičová’s government accepted an ambitious programme and if it would have been fulfilled it had certainly moved Slovakia forward. We managed to do some things fully, some partly and some we didn’t manage at all.

As we mentioned in the last lecture, the Fico’s government left the public finances in a piteous condition. The deficit achieved in 2009 and 2010 eight percent annually, the public debt grew sharply and there were no measures taken against it to solve the situation. At the same time we had an obligation to decrease the deficit of the public finances under 3% till 2013. The Radičová’s government made up their mind to reduce the deficit in 2011 to 4,9%, in 2012 to 3,9% and in 2013 to 2,9%. Wide saving measures, a reduction of salaries and common expenses in a public sector were also accepted and approved. Some excise taxes were increased, especially VAT was increased about 1%, from 19% to 20%.

The year 2011 was, from a point of view of stabilization of the public finances, very successful. We achieved one of the most significant consolidations of the public finances in the EU27 and we reduced the deficit about 4% points, from 8,1% to 4,1%. Although these saving measures had an impact on growth decreasing, it was not dramatic. Here is the proof – in spite of a significant decrease of the deficit we had one of the highest economic growths in the eurozone and the EU27. In the first, and actually the only whole, year of Radičová’s government, significant progress was achieved in fulfilling the obligation to reduce the deficit under 3% in 2013.

I consider a change of the Labour Code as another very positive result of the Radičová’s government. After difficult and long negotiations, an amendment was approved. This amendment significantly improved the flexibility of the labour market. This is one of the necessary conditions of another competitiveness growth of the Slovak economy.

Measures in the area of an increase of the transparency and a public control will be very important in the future. There was a huge amount of anti-corrupt measures. Certainly the most important thing is a compulsory publication of contracts made by a public procurement. A condition of contract validation by the public procurement is its publication in the internet and this creates better conditions for the public control. Such measures are even not approved in the majority of advanced countries.

To positive results we may include a transformation of the television and radio as well as changes in procurements of highways, where significant savings were achieved in comparison to the Fico’s government (see the lecture form last week). Very positively I also assess railway companies, in which the order was finally established and long-lasting encumbrance and wastage were stopped. Unfortunately, in the health service we didn’t manage to complete the transformation. Now there is a threat that debt elimination, which we did, was not the last one.

Necessary changes in the judiciary started, unfortunately, they were stopped by early elections.

Very poor results were achieved in an improvement of a business environment. Although necessary changes were launched by the project Singapore, they haven’t become evident in practice so far.

I mostly regret the incompletion of changes in two areas – a levy reform and changes in both the pillars of a pension system.

A preparation of the levy reform was long and difficult. I have ruled many reforms, during four governments I worked in, but I haven’t experienced longest and more difficult and tiring negotiations as in this reform. Finally we managed to approve this reform in the government after almost half a year’s preparations and discussions; however, a fall of the government prevented from its approving in the parliament. It is not certain whether reform laws would be successful in the parliament even if the government would not fall, because politicians of the Civil Conservative Party and a part of politicians belonging to the Christian Democratic Movement said they would not agree with government’s proposal.

Another very necessary, prepared, but not approved changes concern necessary measures in the pension system. These changes are prepared in such a way that, on the one hand, long-lasting sustainability of public finances would be guaranteed and, on the other hand,  a necessary growth of pensions would be secured too. In Slovakia we will undergo very fast inhabitants aging in following decades, if no necessary changes in the first and also second pillar are made. The threat is a future disruption of the public finances and a deterioration of pensions of following generations. From a point of view of a consolidated economic development, and especially from a point of view of intergeneration justice and solidarity, it is important to act as soon as possible – today. The Radičová’s government approved necessary changes in the first and second pillar, introduced them to the parliament, but the early elections stopped their adoption. The Fico’s government don’t deal with those measures; we will look at it more detailed in the following lecture. 

At the conclusion, let me express the causes of the fall of the Radičová’s government from my point of view. Of course, it is my own view and I am conscious that other people may look at it differently, especially considering direct participants in these events. I feel a joint liability for the fall of the government and I did mistakes too, but I am sure that I basically acted as I had to act. My evaluation of causes of the fall of I. Radičová’s government are based on my experience from taking part in four governments during recent, more than, twenty years (the Čarnogurský’s government 1991 – 1992, the Dzurinda’s governments 1998-2006, the Radičová’s government 2010 – 2012).

I consider following points as the most crucial causes of the fall of the Radičová’s government:

• an irresponsible and populist policy of FaS in relation to the crisis in the eurozone
• a way how I. Radičová ruled the government
• a de facto lost of a coalition majority by an autonomous functioning of Obyčajní ľudia (Common People) and OKS (the Civil Conservative Party)

The situation in the coalition was so bad, especially due to the mentioned facts above, that if the government didn’t fall in a vote of government confidence in connection with the Euro bailout approval, the final result would be sooner or later the same.