Prime Minister Janez Janša on the Government’s measures to combat the effects of the global financial crisis

At a press conference today following the 184th regular meeting of the Slovenian Government, the Prime Minister of the Republic of Slovenia, Mr Janez Janša, referred to the proposed amendments to the Public Finance Act and the proposals for the Government’s response to the current financial crisis.


(Photo: Office of the Prime Minister)


The Government of the Republic of Slovenia today adopted the proposed amendments to the Public Finance Act with a view to introducing guarantees on interbank lending for banks and insurance companies. The amended law stipulates that, in the emergency situation brought about by the current financial crisis, additional borrowing and granting of state guarantees above the limit set by the law governing national budget implementation may be allowed without prior budget amendment or without the adoption of a separate law governing state guarantees or of an amendment to the provisions of the law governing national budget implementation relating to state guarantees. For this purpose, the anticipated state guarantees for credit institutions will amount to EUR 8 billion. The proposed measures are aimed at restoring confidence in the financial system in Slovenia and abroad, and at enabling the economy greater access to loan capital.


The ministers in office also discussed the effects of the global financial crisis on the Slovenian economy; further discussion on this issue is to take place at their next regular meeting next week. Prime Minister Janez Janša stated that Slovenia had three major advantages. They include low national debt – standing at 24% of GDP and being one of the lowest levels of debt in the European Union as a whole, a budget surplus and membership of the European monetary union. And it is owing to the latter that the effects of the global financial crisis in Slovenia are considerably less than those felt by countries outside the eurozone.  The Prime Minister is convinced that Slovenia should use the aforementioned advantages in adopting measures to prevent the global financial crisis from affecting the standard of living and economy in Slovenia.


(Photo: Office of the Prime Minister)


"We believe that certain responses from the Slovenian public witnessed recently, which in fact represent a shift back to a socialist paradigm of distribution regardless of the value generated, are wrong," maintained the Slovenian Prime Minister. He went on to add that any pressures on increasing labour costs and social transfers were harmful at present. This is why an intergeneration agreement is needed on the sharing of burdens resulting from measures that must be taken to tackle the negative effects of the global financial crisis. "An intergeneration agreement of this kind should ultimately result in a consensus that, at present, efforts should be focused on those who can actually help things move forward. Or, to put it more simply, on the economy." In order to rapidly reduce the burden on the economy, the Slovenian Government had proposed introducing certain measures, speeding up state infrastructure and other projects, and reducing public spending.


The Prime Minister cautioned that there was not much time left to take decisions, and if we did nothing, we would make ourselves dependent on external factors. "We need measures. And since we need measures, we need the government to have full authority as well. From this point of view, I regret that these procedures are unusually slow. Four years ago, when there was no financial crisis, consultation with parliamentary parties took considerably less time and proposals for the Prime Minister designate were submitted to the National Assembly much faster. The National Assembly, which has already been constituted, could already have working bodies in place to consider the proposals," stated the PM. He said he was surprised that the National Assembly would decide on the Prime Minister designate as late as next Friday, since, as he stated, there is no time to put off such a decision.


(Photo: Office of the Prime Minister)


The PM said he hoped that the National Assembly would discuss and adopt the amendment to the Banking Act discussed by the Slovenian Government some time ago, as well as today’s amendment to the Public Finance Act, in as short a time as possible. This is the only way Slovenia will be able to avoid negative effects of the global financial crisis. Failing that, Slovenia will also feel the effects of the growing financial crisis.

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