Election year in Slovakia
November 17th, 2023
By Matej KOVAC – Consultant | Slovakia
Slovakia in the second half of the year 2023 has entered an “election year” starting by general election in September, presidential election in March 2024 and European election in June 2024. All three elections will be similar what regards the blocs running in them. Since the second round of the presidential election will be held at the beginning of April, the agenda of European election will need to wait until April. We expect to have two principal blocs – pro-European (led by PS) and sceptic (led by Smer-SD) competing against each other.
The general elections took place on September 30, 2023. Smer-SD (social democrats, Chairman – Robert Fico) won the parliamentary elections, obtaining 22,94% of the votes. Also other six parties PS, Hlas-SD, OĽaNO a Priatelia, KDH, SaS, SNS entered the parliament. The former ruling party OĽaNO gained just 8,9% compared to 25% in 2020 elections.
Coalition Government Smer-SD, Hlas-SD and SNS
The outcome of the early parliamentary elections brought about a significant shift at the level of the government. Smer-SD emerged as the winner and reached a coalition agreement with Hlas-SD and SNS, becoming the next ruling party.
In accordance with the memorandum of understanding endorsed by all three upcoming coalition parties, the allocation of ministries is delineated as follows:
- Smer-SD – 6 ministries including the post of the Prime Minister
- Hlas-SD – 7 ministries (the party will also assume the position of the Chairman of the Parliament)
- SNS (Slovak National Party) – 3 ministries (the Ministry of Tourism and Sport to be established from 1. January 2024)
War in Ukraine and high inflation as key electoral factors
The general election campaign led by Smer-SD was focused on several issues – an anti-war stance and a stop for the military support of Ukraine, high inflation, victimization of the opposition. Smer-SD was very offensive toward the current President Zuzana Čaputová claiming her responsibility for the persecution of the opposition by the Police and the Office of Special Prosecutor.
On the other hand, he strongly rejected the idea of referendum proposed by Republika about the leaving EU and NATO. He confirmed Slovakia’s pro-European stance and its place within the EU and NATO structures, but he is open to criticize EU when needed. As the prime minister he wants to have close cooperation between the Visegrad Four countries.
It is needed to be reminded that for Robert Fico campaigning and governing are two different models of behavior. During the press conference held after the elections he repeated his former government’s successes – entering Schengen and Eurozone.
Business environment and tax policies
He is aware of the importance of stable business environment and foreign investments, especially in the difficult situation regarding the deficit and public finances.
Among the numerous challenges the new government will confront in the coming years, one of the most significant pertains to the state budget deficit, which is expected to further deepen. This pressure drives modifications in taxation, involving either the increase of current taxes or the introduction of new taxes. At present, the sector most likely to be facing additional taxation is the banking industry. The new government in its Policy Statement claimed to impose additional taxes on negative externalities (e.g., alcohol and cigarettes), and reevaluating the property tax calculation. Also, there is a claim stating open doors for further windfall taxation of other sectors.
“In the field of taxation, the government will advocate for the implementation of specific financial instruments for taxing extraordinary profits of various sectors, corporations, legal entities, and individuals. The objective is to generate resources for financing targeted public policies.”
Nonetheless, the future coalition parties hold different stances on these measures in relation to one another, leaving the implementation of deficit-handling measures uncertain. It remains unclear which, of these measures will be put into effect.
The main pressure for the parties to address this matter stems from the budgetary rules enshrined in the Constitutional Act on Budgetary Rules, often referred to as the “debt brake.” The upcoming government will be exempt from the strict constraints imposed by the debt brake for the initial two years following their appointment. Nevertheless, after this two-year period, if no consolidation measures are put into action, a significant restriction on public spending will be imposed until the debt is effectively consolidated.
The presidential election will once again be a battle of new faces, as current President Zuzana Čaputová has announced that she will not seek re-election. This marks an opportunity for former Foreign Minister Ivan Korčok, who was the nominee of the SaS (ECR) party. He is a strong supporter of Slovakia’s European and transatlantic ties and will most likely be supported by the PS and SaS parties. On the other hand, the candidacy of the chairman of the second strongest coalition party Hlas-SD, Peter Pellegrini, the current speaker of parliament and former prime minister, is very likely. It can be expected that the strongest party Smer-SD and probably the last coalition party SNS will support him. Other candidates are likely to intervene in the election, but the main battle should be between these candidates.
The European elections will be overshadowed by previous elections, and it is to be expected that people will be tired of successive campaigns. Therefore, we do not expect fundamental and strong topics on which voters’ decision-making would break. Rather, they will be a kind of reverberation of the two previous elections, and the results will mainly affect the ability of parties to mobilise their voters. It is also important to point out that PES has suspended the membership of the currently strongest (Smer-SD) and third strongest parties (Hlas-SD), which will of course have an impact on their election campaigns. It can be expected that the second strongest party in the parliamentary elections, the PS (Renew Europe), will campaign actively and strongly pro-European and will be able to mobilise its voters, as they did in the past European elections. It will be interesting to see the performance of the EPP parties – OľaNO and KDH, which traditionally also managed to attract their voters to the polls.