(Repeats story from Wednesday)
* 2011 state budget approved with 4.9 pct/GDP fiscal gap
* Budget based on assumption of 3.3 pct growth
* Planned fiscal consolidation ambitious, but reachable
* Austerity includes tax hikes, cuts in govt spending
By Martin Santa
BRATISLAVA, Dec 8 (Reuters) - The Slovak parliament approved
the 2011 state budget on Wednesday, aiming for one of the
European Union's most ambitious fiscal consolidations.
The euro zone country set the deficit ceiling at 4.9 percent
of gross domestic product (GDP), down from an expected 7.84
percent gap this year, and pledged to cut it to the EU's
official limit of 3 percent in 2013.
The budget assumes 3.3 percent GDP growth, decelerating from
4.0 percent in 2010 due to the government's austerity measures
and expected trends elsewhere, notably Germany.
Prime Minister Iveta Radicova's coalition cast 78 votes in
favour of the bill, with 69 opposition votes against.
"The budget's approval is a positive message, because
Slovakia was going into wrong direction in the past," Finance
Minister Ivan Miklos said immediately after the vote.
"This will deliver sound public finances and higher economic
growth, and it will prevent Slovakia from ending up like Greece
or Hungary," he added.
Greece triggered a debt crisis that is now rattling other
weak euro zone economies, while Hungary needed an IMF-led
bailout in 2008.
Slovakia's consolidation plan is much more ambitious than
deficit cuts planned by other central European countries, albeit
coming from a worse balance.
"This budget's key positive factor is that is does not delay
the fiscal consolidation into coming years, as the government
plans to cut the deficit in the next year already," said Eduard
Hagara, senior analysts with ING Bank in Bratislava.
"On the other hand, I would welcome fiscal consolidation
focused even more on cuts in expenditures," he added.
The cabinet approved a 1.75 billion euro austerity package
for next year including a hike in value added (VAT), excise
taxes and cuts in public sector wages. It aims to boost revenues
by 770 million euros and cut spending by 980 million euro.
Analysts said the approved budget was ambitious but
achievable, adding the planned tightening carried some downside
risks for the economy.
(Additional reporting by Petra Kovacova; Editing by Ruth
Pitchford)
