Slovak left poised to win election, sink reformists

Reuters News
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Posted: Mar 10, 2012 12:44 PM
Slovak left poised to win election, sink reformists

By Martin Santa and Jan Lopatka

BRATISLAVA (Reuters) - Leftist former prime minister Robert Fico appeared poised to sweep to victory in Slovakia's election on Saturday on a pledge to tax the rich, amid high unemployment and budget austerity.

Polls showed the 47-year-old lawyer could win 40 percent of the vote, knocking his reformist rival Mikulas Dzurinda's centre-right SDKU out of power and possibly out of parliament.

A government led by Fico's pro-European Smer party would please Slovakia's euro zone partners, who were upset by the outgoing coalition's refusal to contribute to the first bailout of Greece and the delaying of the strengthening of a euro zone rescue fund.

Many centre-right voters, disillusioned by political corruption scandals, are expected to stay away from the ballot box and polls show turnout in the country of 5.4 million may fall to a record low of 44 percent, which would help Fico.

Voting started at 0600 GMT and will end at 2100 GMT. Exit polls will be released within an hour after the voting stations close, and results are expected overnight.

TAXING THE BANKS

The unrivalled leader of centre-left Smer, Fico says he plans to use tax hikes to maintain welfare and cut the budget deficit, and continue the outgoing cabinet's effort to protect the country's sovereign credit ratings.

The country, which has maintained more investor confidence than other periphery euro zone countries, has budget deficit targets of 4.6 percent of gross domestic product this year and 3 percent in 2013.

Fico, who served one term as the central European country's prime minister in 2006-2010, has pledged to dump Dzurinda's flagship reform - a 19 percent flat income tax - and reel in more from the rich, banks and other firms.

His plans involve almost doubling a special tax on bank deposits to 0.7 percent, raising corporate tax to 22 percent, from 19 percent now, and raising income tax for people earning over 33,000 euros per year.

"If you have record profits, you will pay record taxes," Fico has told election rally crowds.

He has criticized labor reforms by the previous government that have made it easier to hire and fire workers, striking a chord among voters afraid of job insecurity in the euro zone's second-poorest country, where 13.7 percent are out of a job.

The minimum Slovak monthly salary is just 327 euros ($430), half of the minimum pay in crisis-hit Greece.

The election comes two years early, after an SDKU-led coalition government collapsed in acrimony last October when one of its junior members, the free-market SaS party, refused to back the expansion of the euro zone's bailout fund.

"GORILLA" SCANDAL

At the heart of the SDKU's likely electoral rout, however, lies the leaking of a secret service file in December appearing to detail bugged conversations between politicians and businessmen in which they allegedly discuss kickbacks in return for the sale of public companies in the mid-2000s.

Details of the file, codenamed "Gorilla", have drawn tens of thousands of outraged Slovaks onto the streets in the past month in a rare display of public anger.

On Friday evening, police used tear gas to disperse a demonstration of around 200 people at the government's offices who threw eggs and shouted "put the gorilla behind bars".

Police said several protesters were detained.

Dzurinda and other SDKU officials have strenuously denied corruption.

"The campaign has been about what has been wrong with Slovakia since its birth. What is bothering us is mainly, apart from a high jobless rate and social issues, corruption," Jan Baranek, a political analyst at Polis Slovakia, said.

The "Gorilla" scandal has marred an otherwise successful track record for Dzurinda, a former prime minister who led Slovakia into NATO and the European Union and paved the way for euro adoption in 2009.

Artist Ludwig Bagin, 33, said he would vote for Dzurinda despite the corruption scandals.

"I believe not all party members are corrupt like the leadership. The party embodies values I stand for," he said.

Fico has pledged to form a coalition with one of the four main parties from the fragmented centre right, with the conservative Christian Democrats (KDH) a prime candidate.

But political pundits said if Smer won a full majority in the 150-seat house, he would be likely to end up ruling alone.

(Writing by Jan Lopatka; Editing by Andrew Roche)