Slovakia's Government Defends Austerity Amidst Public Outcry and Opposition Criticism

Government Pushes Austerity to Tackle Deficit

The Slovak government is currently navigating a contentious debate surrounding its proposed austerity package, with Prime Minister Robert Fico defending the measures as essential for stabilizing the nation's public finances. Slovakia's public finance deficit reached 5.3% of GDP in 2024, ranking among the highest in the Eurozone and significantly exceeding the European Union's 3% limit. The government aims to reduce the deficit to below 5% of GDP in the coming year and ultimately to 3% by 2027, having been placed under the EU's Excessive Deficit Procedure (EDP) in June.

Prime Minister Fico has stated that the consolidation package, which seeks to generate approximately €2.7 billion in cuts and revenue, will avoid reductions in social benefits, unemployment support, maternity benefits, child allowances, or 13th pensions. Instead, the government plans to audit contracts within state health insurance companies and has suggested a potential 30% reduction in state administration employees.

Key Measures and Revenue Generation

The austerity package encompasses a range of fiscal adjustments, primarily focusing on increased revenue and targeted spending cuts. Key measures include:

• Increased Health and Social Insurance Contributions: A 1% increase in the employee health-care levy is projected to bring in €358 million. Contributions for self-employed individuals and self-payers rose from 14% to 15%, and for employers, from 10% to 11%, effective January 2025.
• Higher Income Taxes for High Earners: Existing income tax rates of 19% and 25% are set to increase to 30% and 35%, respectively, with constitutional officials facing an additional 10% hike. This measure is expected to generate over €200 million.
• VAT Hikes: The basic VAT rate is slated to increase from 20% to 23%. Additionally, VAT on selected food items with high sugar or salt content will rise from 19% to 23%, aiming to channel over €90 million into the budget.
• New Taxes: New levies on nicotine products and sugary drinks are anticipated to generate significant revenue, with e-cigarettes and other nicotine products expected to bring in €15 million in 2025 and €126 million in 2026, and sweetened non-alcoholic beverages contributing €85 million in 2025 and €117 million in 2026. A €54 million increase is also expected from gambling taxes.
• Spending Cuts: The government plans to save €1.14 billion by reducing spending on goods and services, merging state offices, and cutting salaries in the state sector.
• Other Measures: These include scrapping a dental benefit, introducing levies on financial transactions (€610 million) and on refinery, telecom, and energy companies (€156 million), increasing tolls for trucks, and a possible reduction of national holidays.

Opposition and Public Backlash

The austerity package has met with strong opposition and public discontent. Opposition leaders, including Michal Šimečka, head of the Progressive Slovakia party, have criticized the government for a perceived lack of detailed spending cuts and for measures that they argue disproportionately burden ordinary Slovaks. Critics contend that the package fails to address corruption and inefficiency, and lacks pro-growth initiatives, potentially pushing Slovakia into an economic recession.

On September 16, 2025, thousands of Slovaks took to the streets in 16 major cities, including Bratislava, to protest against the government's economic policies and Prime Minister Fico's perceived pro-Russian stance. Opposition parties, including Progressive Slovakia, Freedom and Solidarity, Christian Democrats, and United Slovakia, co-organized these rallies, with some leaders suggesting a general strike.

Economic Outlook and Future Steps

Slovakia's public debt is nearing 60% of GDP, and the European Commission has identified the country as having the least sustainable public finances in the EU. While the government asserts the necessity of these measures for fiscal consolidation, the debate highlights a significant divide between the administration's approach and the concerns of the public and opposition regarding the impact on citizens and the broader economy. The government aims to pass the necessary legislative amendments through a shortened legislative procedure, which has further angered opposition MPs.