Governor Masar warns that doubling the limit would represent a systematic change of law and emphasizes that government is only looking for a way to cover the Slovakian budget deficit, and that it won't solve the basic problem, which is lack of budgetary discipline. He also warns that the central bank probably won't be able to maintain the stability of Slovakian currency if it fills the demands of the government. The second essential change suggested by the amendment is to increase from 8 to 10 the number of members of the Banking Council, the highest management body of the central bank, one half of whom the government would appoint. The Parliament will decide Stated changes directly endanger the foundations of the independence of the Slovakian central bank, which should be guided only by the stability of the Slovakian Kruna and not by the interests of lobbying groups. Martin Barto, analyst for ING Barings Securities, thinks that approving the suggested changes in the law would significantly decrease the credibility of the central bank and the Slovakian economy in the eyes of foreign investors, and that the Slovakian Kruna would be under even stronger devaluation pressures.
Experts also warn of possible negative economic consequences.
Larger sums for covering the budget deficit would decrease the amounts intended for financing in the private sphere, which would weaken economic growth. In addition, according to Marcel Klimok, analyst for the Bank of Austria, the government's intentions contradict the general tendency to increase the independence of central banks in Europe, and international studies show that inflation is lower where a central bank is more independent. Whether the changes and additions to the law on the NBS will pass in the parliament is not clear for now.