The debt brake currently in place will enable Slovakia to be spared painful cuts during a future crisis, Sberbank Europe chief economist Vladimir Vano told Slovak media on Thursday.
“We need more public investments, but the question to consider is whether they should be bankrolled by savings made in common expenditures of the state budget,” said Vano.
The debt crisis has exposed a greater deal of vulnerability among smaller countries when facing turmoil or an economic downturn, said the economist.
“A smaller economy such as Slovakia’s is better off sticking to fiscally prudent policies instead of being prodigal,” said Vano.
“The debt brake is set to make sure that in times of need, Slovakia won’t need to resort to extreme and much more painful measures and won’t be reliant on external aid,” added the economist.
“The debt brake makes it obligatory to be frugal in spending so that draconian and painful measures aren’t needed during hard times,” Vano told a discussion program on Slovak media.
The public debt of Slovakia stood at 52 percent of GDP last year. If it reaches 60 percent, the government would face a vote of confidence in parliament. Enditem