Pro-European left sweeps Slovak vote, targets rich

Reuters News
Posted: Mar 11, 2012 12:08 PM
Pro-European left sweeps Slovak vote, targets rich

By Martin Santa and Jan Lopatka

BRATISLAVA (Reuters) - Slovakia's centre-left leader Robert Fico assured Brussels on Sunday that he was a reliable partner after he scored a landslide election victory and prepared to replace a government that collapsed in a row over euro zone bailouts.

Fico's centre-left Smer party won a majority in parliament and the prime minister in waiting said he would uphold the outgoing government's commitment to cut the central European country's budget gap and support steps to strengthen the euro zone.

A government led by the 47-year-old europhile, who was prime minister between 2006 and 2010, will please Slovakia's partners. They were upset by a refusal by the outgoing centre-right coalition to contribute to the first bailout of Greece and the delaying of plans to beef up a rescue fund for troubled countries.

"The European Union can lean on Smer because we realize that Slovakia, as a small country living in Europe and wanting to live in Europe ... desires to maintain the euro zone and the euro as a strong European currency," Fico said at his party headquarters, to the cheers and applause of supporters.

The former lawyer's sweeping victory knocks the SDKU-led coalition of Mikulas Dzurinda from power in the early election, called after the cabinet fell apart in a row over the euro rescue fund last October after just 15 months in office. It has been acting in an administrative capacity since then.

Final, unofficial results showed Smer took 44.4 percent of the vote on Saturday, giving it 83 of parliament's 150 seats.

Damaged by allegations of graft, Dzurinda's party won just 6.1 percent, less than half of what it won in 2010. But it avoided being knocked out of parliament altogether by clearing a required 5 percent threshold.

The margin of victory is unprecedented for any party since Slovakia split from its former federation partner, the Czechs, in 1993.

It also resembles the sweeping win by Hungary's centre-right Fidesz party of Viktor Orban against a discredited left in 2010. Some pundits say there are similarities between Fico and Orban because both have harangued the press and passed controversial media laws, as well as criticizing foreign-owned companies operating in their countries.

President Ivan Gasparovic said he would ask the head of the winning party to lead talks on forming a government.

"We will agree a deadline for him to present the new government to me," Gasparovic said.

Fico said he would seek a coalition partner but it is likely he will end up ruling alone given Smer's majority. That would be Slovakia's first single-party government since the 1989 end of communism.


Fico says he plans to continue the outgoing cabinet's work to protect the country's sovereign credit rating and cut public spending, although he allowed deficits to swell at the height of the economic crisis in 2009-2010.

The country of 5.4 million people, which has maintained more investor confidence than other peripheral euro zone states, has budget deficit targets of 4.6 percent of gross domestic product this year and below 3 percent in 2013, the EU's official limit.

But Fico has vowed to dump Dzurinda's flagship policy - a 19 percent flat income tax - and reel in more from the rich, banks and other firms that have enjoyed high profits.

"We don't want to go only the way of cuts and savings ... We want to raise taxes on the rich and strong. We will not touch Slovaks with lower incomes," Fico said on Sunday.

"We will aim for tough regulations on utility prices. We have the energy and the strength to do it. It's also necessary to look at banks and the huge profits they are so proud of."

Fico's plans involve almost doubling a tax on bank deposits to 0.7 percent, raising corporate tax to 22 percent from 19 percent, and raising income tax for those earning over 33,000 euros per year.

Fico, who wields near unrivalled power within Smer, has also criticized reforms by the previous government that made it easier to hire and fire workers. That struck a chord among voters afraid of job insecurity in the euro zone's second-poorest country, where 13.7 percent are unemployed.

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

When last in power, Fico softened but did not dismantle the main parts of Dzurinda's reforms, and he is not expected to adopt unorthodox economic policies such as those that angered foreign investors in Hungary after Orban took power.

Fico, a Communist Party member in the 1980s, has praised socialist-era welfare programs, playing to some voters' nostalgia for a time before the uncertainties of capitalism.

He employed mildly nationalistic rhetoric against neighboring Hungary during his first term in power, and pushed through a media law that human rights groups said infringed press freedom.

Central to the SDKU's rout was a scandal around a secret service file that was leaked in December. The file, codenamed "Gorilla, appeared to detail bugged conversations in which politicians appeared to be offered kickbacks in return for the sale of public firms in the mid-2000s, under SDKU rule.

Details of the file have driven tens of thousands of outraged Slovaks onto the streets over the past month in a rare display of public anger.

Dzurinda and other SDKU officials have denied any wrong-doing.

In another first since Slovakia's independence, the far-right SNS party failed to clear the 5 percent threshold.

(Writing by Jan Lopatka and Michael Winfrey; Editing by Ben Harding)