NEWS

Slovenia faces crucial decisions

'The issue here is not the fate of this government or the government coalition; it is simply the fate of Slovenia. If those who have repeatedly and publicly pledged to support the golden fiscal rule fail to keep their word, and those who understand the situation fail to put the interests of the country before the interests of themselves and their parties, then there is no saving this coalition,' the Slovenian Prime Minister, Janez Janša, said today in the National Assembly when commenting on the planned parliamentary vote on the incorporation of the golden fiscal rule into the Constitution and its potential (lack of) support.

 

In the Prime Minister's view, there will be two very serious consequences if the fiscal rule fails to win parliamentary support. The first is related to the already ratified fiscal pact, which imposes on us the obligation to incorporate this rule into our legal system at a constitutional or similar level. The second consequence of a potential rejection of the fiscal rule is linked with the fact that the National Assembly cannot decide on the same constitutional amendment twice in the same term. Prime Minister Janša warned that a deadline to meet this commitment — ratified in spring through the adoption of the act, which was also supported by those who today oppose to this step — expires next year. He also said that our European partners, who support our efforts to resolve the crisis, will require us to comply with the commitment made.

 

Prime Minister Janša further pointed to a content-related issue concerning the golden rule, which was also underlined by the Governor of the Bank of Slovenia at a closed session of the National Assembly, namely that the failure to adopt the golden rule would make 'borrowing by commercial entities from our country much more difficult than is currently the case'. He explained that this will eventually put additional pressure on the public finances and related areas, triggering a new crisis. In his view, the fiscal rule vote is one of the three important rounds of voting to be held at the current National Assembly's extraordinary session. A flurry of activity is expected by the time voting takes place and, according to the Prime Minister, the developments will also influence his decision as to whether to relate the vote of confidence to the fiscal rule.

 

The Governor of the Bank of Slovenia today gave firm support to the golden fiscal rule, as this is a crucial step in determining whether Slovenian commercial banks will be able to refinance their liabilities at a realistic cost and raise capital from abroad.

The Prime Minister stressed that the adoption of a package of acts for growth will generate important long-term effects. 'If adopted, it will eliminate hundreds of administrative barriers that hold back development in areas where there is sufficient capital and where other favourable circumstances exist. The Slovenian National Assembly has never before adopted such a package. This is a matter of urgency, important acts are at stake, and the key issue at hand is not whether the discussions can take a few minutes more or less. If the timeframes were normal, this would be welcomed; but the session on this topic has been convened three years too late and we do not have time nor the luxury of choice,' the Prime Minister emphasised.

 

He also commented on the proposed establishment of a Slovenia sovereign holding. In his view, the opportunity to obtain an instrument that would enable Slovenia to clean up its banks' balance sheets without imposing a direct burden on the taxpayers depends on the adoption of the Slovenia sovereign holding act. He pointed to the government's and taxpayers' common interest in the rehabilitation of the banking system being carried out as soon as possible and in a manner that does not put the whole burden on taxpayers. The rehabilitation of the banking system must be carried out transparently and in a way that allows the persons responsible to be called to account. As he said, those who want the problems in the Slovenian banking system to be resolved secretly within the banks have a strong interest in doing so; they would also want the situation to be handled by the same entities that caused these problems, and that no responsibility would be established. 

 

He dismissed the allegations made that the majority of the non-performing loans were granted during the 2004–2008 period and explained that this illusion has been shattered today to a large extent and by the data of the Bank of Slovenia. 'During that period, Slovenian banks yielded positive results, which means they received repayments for the loans granted at that time. But the picture has changed in recent years,' said the Prime Minister. He noted that, in comparison to the state-owned banks, the financial standing of the banks in private ownership is substantially better. In his view, the state should reduce its share to one quarter and look for strategic partners after the balance sheets have been cleaned up.