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Slovakian report
by Euro Reporter
2012-07-22 10:24:52
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Slovaks find railway smuggling tunnel to Ukraine

A smuggling tunnel the length of seven soccer pitches complete with its own train has been found running beneath the border between Slovakia and Ukraine along with more than 2.5 million contraband cigarettes, the Slovak government said on Thursday. Police said the tunnel had possibly also been used to smuggle people into Slovakia, a European Union member state, from Ukraine, but that its main use had been to illegally import cigarettes into the EU bypassing customs duties. "This tunnel was equipped with a small train, capable of transporting various kinds of goods and we suspect also people," Interior Minister Robert Kalinak told reporters. "There has been no case like this in this region," he added.

The tunnel was 700 meters (765.5 yards) long and connected a warehouse between the Slovak villages of Vysne and Nizne Nemecke with a newly-built family house in the Ukrainian border city of Uzhorod, Kalinak said. Tibor Gaspar, president of the Slovak police, said sophisticated mining-technology appeared to have been used to dig out the tunnel, which ran about six meters below ground. Finance Minister Peter Kazimir said a special tax evasion task force formed by the police and custom officials had been monitoring the Slovak house for weeks. He said 13,100 cartons containing 200 cigarettes each had been seized in the raid, equivalent to 2.6 million cigarettes.

"We can assume excise tax evasion could reach up to 50 million Euros, in case the tunnel was used for a year," Kazimir said. The owner of the Slovak property was arrested on site along with a truck driver in a different location, police said, adding that a joint investigation with Ukraine would continue since many more individuals must have been involved.


Slovakia is on track to meet budget-deficit targets, IMF says

Slovakia is set to meet the goal of reducing its budget deficit below the European Union’s limit next year amid one of the strongest economic recoveries in the region, the International Monetary Fund said.

The euro-region member is on track to trim the shortfall to 4.6 percent of gross domestic product this year and 2.9 percent in 2013, the Washington-based lender said today in a report following regular Article IV consultations. The government will need to enact more measures to ensure the stabilization of debt levels and reduce vulnerability to market shocks, the IMF said in the document.

Austerity measures planned by the government shouldn’t constrain growth, the fund said, projecting an economic expansion of 2.6 percent in 2012 and 3.3 percent next year. An intensifying of the euro-area’s debt crisis and an eventual loss of investors’ confidence in fiscal consolidation represent key risks for the economy’s outlook, the IMF said.


No more patience for European bailouts

Slovakia's prime minister said Tuesday that people in his country have run out of patience with European rescue measures and more aid can only be offered if troubled eurozone nations get their finances in order. It is "very difficult" to explain to Slovaks why they should contribute to rescuing nations with significantly higher salaries and pensions, Prime Minister Robert Fico said during a visit in Germany. Slovakia is one of the newest and least affluent members of the 17-nation eurozone. "In Slovakia, people live of a monthly pension of €280 ($350) and salaries stand at about €400 a month," he said. "It is very difficult to explain to those people why Slovakia contributes to assisting countries where ... wages stand at €3,500."

Fico's comments appeared to be a veiled reference to Greece, which has a higher standard of living but has needed two sovereign bailout packages and has lagged in implementing reforms and austerity measures agreed with its creditors. "That is why Slovakia is not prepared to grant further financial assistance unless we have the guarantee that the countries who get those funds will also do their homework," Fico said through a translator. "The public's patience has run out," Fico added, speaking alongside German Chancellor Angela Merkel.

Merkel said they "agreed that in the future, we will need more Europe, not less" to overcome the debt crisis, with every nation having to fulfil its obligations. Last week, EU leaders agreed in principle to give Europe's new permanent bailout fund the ability to buy bonds on secondary markets to drive down countries' borrowing costs if those countries comply with recommendations from the EU's executive Commission for their economies. Merkel reacted coolly Tuesday to a threat from Finland to veto such bond purchases. She said there was no urgency to act on the matter because no country has so far requested such assistance. If a country requests assistance, Europeans will look for the most efficient way to provide it, she added.

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