EU fund freeze would hurt economic growth
If Slovakia spends only 80% of the €6.4bn of the Recovery Facility money, the country’s economic growth in 2025 and 2026 would be 0.2 and 0.6 points slower respectively than if it were fully used, estimates the Institute for Financial Policy at the Finance Ministry. The shortfall in EU subsidies would hit investments, the main growth engine in times of fiscal consolidation. At full absorption, the economy will grow by 2.2% next year and by 2.4% in 2026. Slovakia has already received €2.1bn from the Recovery Facility, with further payments at risk over failure to meet reform targets. A freeze of EU funds, reportedly being considered by the EU due to rule-of-law violations, would have significant effects on economic growth.
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