State Secretary of Finance Ivan Lesay does not include Slovakia among the “hawkish” member states opposed to a fiscal stimulus for the eurozone. In an interview with EURACTIV, he also backed calls for a European unemployment insurance scheme.
Ivan Lesay has been the State Secretary of Slovakia’s Ministry of Finance since June 2015.
Lesay spoke to EURACTIV’s Jorge Valero
The EU’s 2017 budget allocated more funds for policies supporting growth creation and to bolster the European security. Are these new efforts enough to address citizen concerns about inequality and insecurity?
It is always a matter of perspective. It depends from where you are looking. We believe it was sufficient within the limits. You can always claim that more was needed. Both areas registered significant increases compared to the year before. Around 16% increase in the area of migration and security and 11% increase in growth- enhancing policies.
Your presidency led the review of the multiannual financial framework (MFF) 2014-2020, the EU’s long-term budget. Is it enough with bringing more efficiency and financial engineering?
From a Slovak perspective, we started using EU funds together with financial instruments back in 2012 or 2013, with the view that in the next MFF would bring probably less money for Slovakia.
We are in favour of using EU funds in a more innovative manner. Even before the European Fund for Strategic Investments (EFSI) was launched, we established a national vehicle with very similar principles, namely leveraging public money.
Do you see yourselves as the precursors of the EFSI?
Well, it was not a new idea. Financial instruments worked like that.
The mid-term review was introduced in order to add more funds once the crisis was over, given that this MFF was prepared in austerity times. How big will the new financial contributions be?
The first question is whether the recovery is here. I would not be so sure about it, with all the looming risks. When we talk about the mid-term revision, it is not a done deal yet. But the package will not change too much, and right now it brings €5 billion in new money.
The European Commission recently proposed a fiscal stimulus for the eurozone (an aggregated fiscal stance worth 0.5%).
Our contribution would not matter that much in the European perspective. We have a nuanced position here. From a Slovak perspective, unlike some member states, we don’t say that the concept of aggregated fiscal stance does not have its merits. We appreciate that stance. We believe that once you have a single monetary policy it makes sense to look at the fiscal policy not only as a sum of national perspectives but as an aggregated level. We don’t have a problem with the concept, but that doesn’t mean we support the interpretations…
By the media?
Yes, there are some slight indications that it was exaggerated in the media. For us, the take is that actually, we have a gap between the aggregated level of fiscal stance and the optimal level. This matters for the monetary union. Our preferred scenario would be to have some sort of central fiscal capacity. In absence of this capacity, the second option probably would be that member states invest more. But this is tricky. Legally, the Commission has the right to assess the aggregated fiscal stance, but I am not so sure whether it has the right to recommend that countries spend more.
Given that you expect a deficit of 1.29 GDP in 2017, and a GDP growth of 3.5%, it seems you are in a good position to contribute more. Would you?
Actually, we don’t have fiscal space. We are still on the path to reach our medium-term objective. We will reach it in 2019. For the Slovak government, it has been always a priority to invest more when we have fiscal space.
Should Germany invest more?
I would never say that, sorry…
The central fiscal capacity you backed could be used to support a European unemployment insurance scheme. The Council is currently assessing its feasibility.
There is no unanimity in the Council. There are very divergent views on the need for a fiscal capacity. A Eurozone budget would be even a step further, because you could have a fiscal capacity that doesn’t require such a loss of the political sovereignty, and can work pretty much independently. That could be the unemployment insurance scheme, bypassing the national budgets and working from the European level, based on automatic criteria and conditions. Another possibility would be an investment vehicle, similar to the EFSI, but with more economic importance.
Do you think that a European unemployment insurance scheme could be a reality one day or is it just fanciful thinking at the moment?
The Slovak Presidency, and myself, believe that for the monetary union to remain intact and work sustainably in the longer run, there should be some movement in this direction. I know it is difficult. I am aware of all the obstacles and the conditions. There are many ways to structure such an instrument. The important thing is that there is something like that.
Could the 60th anniversary of the Treaty of Rome be an occasion to lift Germany’s opposition to this idea?
Member states’ positions are really divergent. I would not highlight one particular member state. The change I perceive after the referendum in Britain is that there is much more appetite for some common financing of ‘commons’ at EU level, using the expression of Mario Monti. This is something being done in the field of security and defense.
The Commission urged the Council to adopt its revision of EFSI during the next Ecofin Council on 6 December. Will it happen? Have the Council’s concerns related to the additionality of the plan been addressed?
Yes, it will happen. We will reach an agreement on a general approach during the Slovak presidency. What is more important is the content of the deal. As a presidency, we were very vocal on the fact that the EFSI should strengthen the additionality. The Council made this point very clear. Before the summer break, the Commission said that the review would focus on extending the EFSI, nothing on the additionality. We are going even further to the amendments proposed by the Commission to strengthen the plan’s added value. But it is true that it is quite difficult to assess the concept and to implement it. But I believe that there will be more and more additionality whereas in the first years of functioning there was probably not enough, because EFSI started very quickly, and the European Investment Bank had to use some of the projects in its pipeline.
As a member of the Visegrád group, Slovakia is seen as not too pro-European. Prime Minister Robert Fico has even been labelled a populist. Do you think your EU presidency helped to correct this perception?
I am sure about that. Actually, I never heard that anybody said that Slovakia is not pro-European or is anti-European. I heard reports of populism, and I don’t want to comment on that.