NEWS

Prime Minister’s press conference following the Government’s 100th regular session

At today’s session, the Government of the Republic of Slovenia adopted several resolutions, including the Budget Memorandum for 2011 and 2012. At the press conference, the Minister of Finance Franc Križanič and the Prime Minister Borut Pahor presented the major resolutions and answered a number of topical questions posed by the press.

  

Today, the Government of the Republic of Slovenia adopted the Budget Memorandum for 2011 and 2012, the Draft amending the 2011 Budget of the Republic of Slovenia  and the  Draft Budget of the Republic of Slovenia for 2012.
The basis for the preparation of the Draft amending the 2011Budget and the 2012 Draft Budget was the Autumn Forecast of the Institute of Macroeconomic Analysis and Development (IMAD) drawn up in September 2010. As a result of the difference between the state budget revenue and expenditure, the budget deficit will in 2011 drop by 0.4% of the GDP and will amount to 4.5% of the GDP or EUR 1,690 million, while in 2012, it will stabilise at about 3.6% of the GDP or EUR 1,423 million.  In 2009, a new classification was introduced, i.e. a classification by development policies, development programmes and development sub-programmes.  In addition to this slightly different approach to the budget drafting, the Government also this year decided to set a budget expenditure ceiling by applying a fiscal rule.    This rule provides for a controlled growth of public expenditure and consequently, for the attainment of a medium-term offset balance of public finance that is not linked to the cyclical movement of public revenues.

   

At today's regular session, the Slovenian Government also adopted the wording of the draft Act amending the Implementation of the 2011 and 2012 Budgets of the Republic of Slovenia Act.  Since this is an Act adopted on an annual basis, its content will change in comparison to the currently applicable Budget Implementation Act only to the extent necessary for current and smooth budget implementation.

   

The Government also adopted the draft Act on Intervention Measures to Tackle Economic Crisis containing measures to be adopted to mitigate the effects of the financial crisis. The proposed measures are urgent and cannot be delayed, as they needed to be included in the draft budgets. The required documentation, including the laws necessary for the budget implementation, should have been be submitted to the National Assembly by 1 October 2010. Since the Government has not yet reached an agreement with the public sector trade unions on civil servants' wages, the Act on Intervention Measures also includes provisions that refer to civil servants' wages and measures related thereto. The draft Act is of a provisional nature and applicable for 2011 and 2012. Moreover, the draft Act containing measures as laid down by the Government during the preparation of the draft budgets will be submitted for a legislative procedure. If a different agreement is reached with the trade unions, relevant amendments will be proposed in respect of this part according to the Rules of Procedure of the National Assembly.  The escalation of the financial and economic crisis put further pressure on public finances. The projections of public finance aggregates indicate that the nature of public finance problems is not merely transitional, but also structural. The economic situation has a strong impact on the amount and structure of the budget expenditure for 2011 and it will have the same impact in 2012. The purpose of this Act is to introduce measures that will contribute to reducing the risk to public finance stability in the short term, while in the long run, the pension and health care systems and the operation of the public sector will in particular need to undergo changes. The proposed measures will not interfere with the previously acquired rights, but will only keep the scope of the 2011 and 2012 expenditure at the 2010 level.

   

The adoption of this Act will provide conditions for the implementation of the budget in 2011 and 2012; failing this would mean serious disruptions in the provision of public finance sustainability. At today's session, the Government also adopted the wording of the draft Ordinance on the Programme of Selling Financial Assets of the State for 2011 and 2012. Pursuant to the Public Finance Act, the Government will, together with the draft budget, submit to the National Assembly a draft programme of selling state-owned financial assets for the years for which the budget is being adopted.  Within the framework of economic and social reforms aimed at increasing prosperity in Slovenia, the Government adopted measures for a transparent and gradual withdrawal of the state from the economy.  The programme of selling state-owned financial assets involves not only major companies but also capital investments appropriate for sale, since an opportunity must be provided to sell them under favourable market conditions.  The programme also includes those investments where the selling procedure is already underway.

   

At today's session the Slovenian Government adopted a decision on the transfer of authorities for the implementation of the Norwegian Financial Mechanism, the EEA Financial Mechanism and the Slovenian-Swiss Cooperation Programme from the Government Office of the Republic of Slovenia for Development and European Affairs (GODEA) to the Government Office of the Republic of Slovenia for Local Self-Government and Regional Policy (GOSP) by 1 December 2010 instead of by 1 October 2010, as decided by the Government in August this year.

  

Following a detailed overview of tasks required for this transfer, the two Offices realised that the appropriate date for the transfer would be 1 December 2010 to avoid major disruptions in the current implementation of the aforementioned mechanisms and therewith provide conditions for the preparation of relevant documents. This transfer also complies with the 2011 draft Budget.