Slovakia faces minority cabinet as SaS party set to resign

Slovakia faces minority cabinet as SaS party set to resign
The SaS party says it is fed up with Finance Minister Igor Matovic's populist and chaotic response to the cost of living crisis. / bne IntelliNews
By Albin Sybera August 29, 2022

Slovakia's protracted coalition crisis is set to climax on Wednesday, the deadline given by the rightwing SaS party for the resignation of Minister of Finance Igor Matovic (OlaNo party). 

If Matovic does not resign by September 1,  SaS will leave the three-party coalition, depriving the cabinet led by Prime Minister Eduard Heger (also OlaNo) of its majority. The government will have just 67 seats in the 150-seat parliament.

Even though SaS has said it will support the government in votes of no-confidence, the loss of the majority will make an early election much more likely before the end of the government's term in February 2024.

"There is a 99% probability we leave the coalition, unless a miracle happens this week," Martin Barto, a member of SaS’ National Council, told bne IntelliNews. "I think early elections are likely," he added. "It is very questionable whether the government will be able to function without SaS."

The cabinet crisis has been triggered by the growing cost of living crisis in the country and what the SaS regards as the finance minister's populist and chaotic response, which included going behind the back of his coalition partners to seek the support of neo-Nazi deputies to push through help to families.

Last week Heger tried to resolve the crisis by offering to reshuffle ministerial and state secretary posts in his cabinet. The offer was turned down by SaS because it did not include Matovic leaving the cabinet.

“There were no new proposals, OLaNO was merely inquiring about our positions towards cabinet proposals,”  Richard Sulik, chairman of SaS, told local media, adding that SaS support for the budget is unlikely. Barto told bne IntelliNews it it was unlikely the budget would be passed, forcing the government to continue with a provisional budget for 2023, using this year's budget totals.

Sulik has also offered to resign as quid pro quo for Matovic's departure, but this offer has not been taken up by the OLaNO leader.

Heger had remained hopeful ahead of Friday’s negotiations, which, however, reached another dead end. “These negotiations have been no waste of time. Every meeting brought some progress”, he claimed. 

Sunday’s television debates featuring ruling coalition politicians included a mixture of hopeful and conflicting statements. “Inside the coalition we believe SaS will change its mind on leaving”, said chair of the constitution and legal committee of the Slovak Parliament Milan Vetrak. 

In a more confrontational tone Vetrak also said that “SaS wants to escape the responsibility” for governing, pointing  to the dire economic situation and worsening energy crisis.

His interlocutor, State Secretary at the Minstry of Foreign Affairs Martin Klus (SaS), rejected the idea and said SaS ministers will be there to ensure a smooth transition after SaS resigns from the cabinet. 

Both politicians spoke of an early election as the last resort, suggesting a minority government could be the most likely scenario following the cabinet’s meeting on Wednesday, probably the last one with SaS ministers present. 

Ex-premier Robert Fico (SMER-SD), who stepped down in 2019 amid protests over the killing of Slovak journalist Jan Kuciak and his fiancé, has been eying a return to government following a rise in the opinion polls. 

Fico and his Smer party were able to create a lot of media noise by collecting signatures for a referendum to instigate an early election which reached the necessary quorum of signatures earlier in August. 

Slovak President Zuzana Caputova said she would refer the referendum to the Constitutional Court because the questions posed in the referendum could contradict the Slovak constitution.    

This month the cabinet is set to discuss a host of measures aiming to ease the impact of the energy crisis on the population as well as corporations. One of the points included defining the plan to help Slovak citizens exposed to the soaring inflation and rising costs of living. Some of the latest state measures to be approved include aid to pensioners, as well as the second round of inflation aid for some 56,000 Slovaks not included in the first round.  

Companies are also struggling. July production levels have been declining in most sectors monitored by the Slovak Statistical Office. 

Recently, Slovakia’s only aluminium production plant was shuttered, citing its inability to maintain energy-intensive production and opening speculation that more production plants barely coping with the high energy bills could follow suit.  Slovalco management and owners pointed at the cabinet for failing to implement a more effective compensation scheme from the environmental fund for the rising energy prices.

A much discussed capping of energy prices negotiated with the partly state-owned Slovenske elektrarne also needs to be implemented.