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SLOVAKIA'S public finance deficit will exceed the three-percent threshold of per GDP called for by the budgetary rules of the European Union, Finance Minister Jan Pociatek said on Tuesday. The minister confirmed the figure during the presentation of the finance ministry's new prognosis that forecasts Slovak economy to contract by 6.2 percent.

"It's obvious that Slovakia, too, will fall victim to an excessive deficit and will be among the majority of countries of the EU that will end up there this year, with only a few exceptions," Pociatek said. However, he refused to specify the expected amount of Slovakia's deficit this year. The estimates of impacts of the significant slump of the economy on tax and contribution revenues of the state will be not ready before next week.

According to Pociatek, the ministry will prepare the revision of this year's budget in September. However, more important than this year's budget will be the course of its further consolidation in the future.

"Much more important from our perspective is what the years after 2009 will look like, or what our fiscal consolidation in the subsequent years will look like. This is what we want to concentrate on first and foremost," Pociatek said, adding that Slovakia will have to defend its consolidation plan also in the expected talks with the European Commission. At the same time, he emphasised that any changes in the budget will not have an impact on social programmes for people.

According to the new official prognosis that the finance ministry published on Tuesday the Slovak economy will slump by 6.2 percent this year. Thus after a long fence sitting the ministry significantly re-assessed its previous prognosis from February, in which it forecast growth of 2.4 percent. The re-assessing of the estimates follows from the fact that compared to the prognosis from February, the external environment of Slovakia's economy has deteriorated significantly.

According to Pociatek, the finance ministry has tried to make as conservative prognosis as possible, and despite the possible risks it's probable that the real development of Slovakia's economy will be better than the expectations indicate today. At the same time, the ministry expects an economic revival to come as soon as next year, namely at the level of 1.1 percent. Subsequently, the growth of economy should accelerate to 3.4 percent in 2011, and 4.8 percent in 2012.

Meanwhile, National Bank of Slovakia presented its own prognosis on Tuesday. Just like the finance ministry, it re-assessed the expected slump of Slovak economy and its estimate went from -2.4 percent to -4.2 percent. The central bank too, expects the revival of Slovak economy as early as next year and is forecasting growth of 2.4 percent and in 2011 as much as 4.1 percent.

A significant difference in the latest prognosis between NBS and the finance ministry was reasoned by the central bank's governor Ivan Sramko by the different dates which these institutions assessed the available data. Unlike NBS that closed the assessed period in mid-May, Sramko said the finance ministry had statistics for April, which were published later, at its disposal. "If the finance ministry's estimates a greater drop in GDP than we did, then it's based on the fact that they worked with data, which were not available for us before May 13th," Sramko told journalists.

THE INTERNATIONAL Monetary Fund expects the Slovak economy to shrink by 4.5 percent this year, while the public finance deficit is estimated to exceed five percent of GDP, according to an IMF mission that visited Slovakia in mid-May and released its results on Tuesday.

The mission focused on evaluating Slovakia's macro-economic outlook, fiscal policy and the financial sector.

According to IMF, the economic situation should improve in 2010, when GDP should grow at two percent, followed by expected growth of 4-5 percent in 2011. However, the unemployment rate, currently at more than 11 percent and steadily rising month-on-month this year, will not begin to drop below 12 percent until 2011.

IMF has also warned that unless changes to fiscal policy are undertaken, the public finance deficit could continue to stand at five percent in 2010 and 2011. The IMF therefore recommends that public finances are consolidated gradually by one percentage point per year.

According to IMF, it is necessary to continue to cut public expenditures, to support social programmes, to make public procurement more efficient and to secure mergers within the public administration.

IMF also recommends that, in view of rising debts of Slovakia's healthcare sector and inefficiency of hospitals, the Slovak cabinet carry out structural changes in the sector.

PARLIAMENT on Tuesday, with 77 votes, managed to overturn the veto of President Ivan Gasparovic regarding the amendment to the Criminal Code prepared by the justice ministry. Among other things, the legal norm is to bring much more stringent punishments for extremists from September.

However, the head of state had reproached the legislation for not having a clear definition of extremism, and the president also regards the explanation of the notion of extremist material as insufficient. The approved law, the president said, also has other legislative imperfections.

"I view it as necessary to effectively fight against the serious forms of criminal activities, against the violation of basic rights and liberties," the president's reasoning said, However, concurrently he says that it's necessary for the law to be intelligible, terminologically precise, and cohesive. Gasparovic, a former law faculty teacher, also noted that the amendment would enable the criminal prosecution also of those who would use extremist materials for scientific purposes.

The introduction of more stringent punishments for extremists is, the justice ministry maintains, a reaction to recent events, where groups of spectators behaved in a rowdy fashion at sports events.

"We won't just look on while extremists misbehave. That is why we propose making the punishments more stringent, and we are introducing precise and new definitions of some of the notions. In this way we want to contribute to a more successful clearing up of crimes and to punish perpetrators who try to disturb the peaceful cohabitation of nations, nationalities and ethnic groups in Slovakia," Justice Minister Stefan Harabin said.

YORK GLOBAL Finance has extended the deadline for the repayment of its €15-million loan granted in December 2007 and its €10-million loan granted in September 2008 to SkyEurope Airlines a.s. to July 15th, 2009. Both loans were due for repayment on 15 June 15th, 2009 in accordance with the loan agreements as amended, SkyEurope said in a statement.

SkyEurope is the leading low-cost airline in Austria, Czech Republic and Slovakia with bases in Vienna, Prague and Bratislava offering passengers good value, convenient, reliable and safe flights to attractive destinations all over Europe. Over the past 12 months SkyEurope carried 3.1 million customers and this summer is operating on 55 routes to 33 destinations in 16 countries.

Providing a top value product has allowed SkyEurope to win numerous international awards since operations began including the "Best Low-Cost Airline in Eastern Europe and 3rd Best Low-Cost Carrier In Europe" by SkyTrax for 2008.

SkyEurope has been listed on the Vienna and Warsaw stock exchanges since 2005.

INTERIOR Minister Robert Kalinak appealed to all witnesses to the murder of student Daniel Tupy to help law enforcement agencies to clear up the incident after five suspects were acquitted earlier on Tuesday of all charges due to a lack of incontrovertible evidence.

Prosecutors have 15 days by law to contest the court of first instance verdict.

Kalinak would not comment on the verdict but vowed to gather new evidence and guard against leaks, refusing to offer more details.

Five men were cleared of charges of murdering Tupy on Tyrsovo embankment in Bratislava some three and half years ago. The court heard from 40 witnesses and eight expert witnesses. The main suspect had been in jail for 16 months during the process.