Fiscal Policy in the Slovak Republic

On 1st January 1993, the independent Slovak Republic (SR) began to exist. During 1993 a democratic political system was created. It is a parliamentary democracy with a president at its head. The functions of the president were created and instituted, the Constitutional Court and Supreme Supervision Office were established. They began to create the relations determined by the constitution between the parliament (the National Council of the SR), government, president and judicial power. The functioning of the new state began to be confirmed by the issuing of new legislative norms and laws. Starting the incorporation of the SR into international structures was an important factor in the political life of the SR. The SR became a regular member of the Council of Europe, and signed a treaty on the SR becoming an associate member of the European Union. The specific factors of internal political development did not adversely affect the tendency to continue with the transformation process in the economy and society. The SR fully succeeded in maintaining the high level of liberalization of prices and economic relations, already achieved in the former Czecho - Slovak Federal Republic. The liberalization of foreign trade and the associated internal convertibility of the Slovak currency were maintained. In the context of the adopted conception of privatization, standard methods of privatization, justified by the specific characteristics of the Slovak economy, began to be implemented. This led to a slowing down of the progress of privatization of large and medium sized companies. The main role of macro-economic regulation was maintenance of internal and external balance. During 1993, the neutral monetary policy of the central bank, and the restrictive budgetary policy of the government, worked in favour of macro-economic stability. The absence of wage regulation, abolished under the influence of the trade unions, during this year, interfered with the stabilizing macro-economic tendencies. Problems and complications appeared in the progress of the transformation process, but the political groups did not take this as a reason to interrupt the process.