Controversial bank levies to prop up Slovak economy

Slovakia has collected more than €1bn in bank levies since it began the controversial program eight years ago. Originally, the idea was to use the money to bail out banks when the next crisis hit. Instead, the government has decided to use the fund to support schools, hospitals, rental flats and cheap loans. "We agreed to use the money to finance the economy," said prime minister Igor Matovič. "By using leverage, we can use up to €1.5bn per year." And for once, the business community appears to be satisfied with the prime minister, whose first months of leadership have been unsteady under fire. "The transformation of the bank levvies will allow us to support the growth of Sloakia's economy by providing a greater number of loans said VUB banka's president Alexander Resch. "I think just the cancelling of the bank levvies is a step in the right direction," Maroš Ovčarik of Finanční kompas told the daily Pravda. "This year, several banks would have made a loss because of them." It's a bit of relief for banks, who were already forced by the government into agreeing to defer loan payments for nine months, to finance the state debt and to provide loans to companies hit by the crisis. Banks have also had to ask their owners to give up most of their dividends for the next four years.