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INEKO: State Firms Added Considerably to 2009 Deficit
Tuesday 17 August 2010 Zoom in | Print page
Bratislava, August 17 (TASR) - State-run railways, medical facilities and the public-service media put a heavy burden on public finances, having increased the 2009 deficit by 1.1 percent of GDP, compared to 0.7 percent in 2008 and 0.6 percent in 2007, according to data in an analysis released by the INEKO think-tank on Tuesday.
"The biggest burden on the state is represented by the three rail companies, which last year received €400 million in subsidies for operating but still ended 2009 with a loss of €200 million," said INEKO director Peter Golias of the analysis, which was drawn up in co-operation with Michal Musak, an analyst with Slovenska Sporitelna savings bank.
Examining the financial performance of 33 state majority- or wholly-owned companies, the document further revealed hospitals as the second-biggest loss-maker with an estimated combined loss of at least €50 million in addition to €28 million from health-insurers. Slovak Radio and Slovak Television received €15 million in subsidies between them on top of income from license fees, but the latter still ended the year in the red to the tune of close to €6 million.
Meanwhile, companies that do make profit such as the Slovak Post Office, State Forests SR, the Slovak Guarantee and Development Bank and Eximbank and, in 2007 and 2008, Bratislava Airport, have produced inadequate returns on capital. "That means that solely in financial terms the state would be better off selling this property and depositing the money in a term account or retiring a state debt bearing 4 percent or so interest," said Golias.
According to INEKO, the financial burden on the state could be relieved by the partial or complete privatisation of state enterprises. The state could then buy the services it needs from them instead of subsidising them.
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