Slovak Parties Agree on Budget After Government Collapse

(Bloomberg) -- Slovakia’s former ruling coalition parties agreed on the state budget for next year, a key move to alleviate the worst cost-of-living crisis in more than two decades.

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The deal comes less than a week after the administration of Prime Minister Eduard Heger lost a confidence vote in parliament, deepening the political crisis caused by months of infighting that has hampered legislation.

The two main former ruling partners said they will back the fiscal plan designed to help households and businesses pay for surging energy bills. They also agreed to approve a windfall tax on profits from Russian oil products made in Slovakia’s sole refinery and a special levy on gas pipelines.

“I’m pleased to announce that we have an agreement,” Heger, who now leads the caretaker government, said late on Tuesday. “Each of us had to compromise.”

The key part of the deal is a concession by the former senior coalition party that its controversial leader, Igor Matovic, will step down as the finance minister once the budget is approved by lawmakers. The vote is expected on Thursday.

With the regular election in the European Union and euro-area member scheduled for 2024, the former government parties have signaled they want to avoid a snap ballot. They have yet to agree on a longer-term form of joint ruling in a fragmented parliament prone to bickering over legislation and replete with personal animosities.

President Zuzana Caputova, who holds key powers in the current political turmoil, has urged party leaders to pass legislation allowing an early election in the first half of next year.

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