NEWS

At today’s 7th regular session of the National Assembly, Prime Minister Janez Janša presented draft budgets for 2013 and 2014 as one of the five fundamental measures that need to be adopted to revive Slovenia's economic growth. In his speech, Prime Minister Janša described the difficult circumstances in which the Government of the Republic of Slovenia adopted the two budgets and compared the current situation to that which the country faced after it gained independence. He went on to present all five fundamental measures that need to be adopted in order to achieve the desired effects as a whole. In addition to the proposed draft budgets, he also presented the programmes of bank system rehabilitation, the pension system stabilisation, a more flexible and safer labour market, and a more effective and transparent management of state assets. In this context, the Slovenian Prime Minister stressed the importance of keeping promises given by Slovenia to the international community and the Government’s awareness of the urgency of adopting unpopular measures with the ultimate aim of creating new jobs.

Prime Minister Janez Janša opened his address by recalling the difficult situation in the international and national environments in which the Government adopted the two draft budgets. "During the recent years of crisis, Slovenia has evolved from a stable and growing country into a country with the highest upward trend in public debt in Europe, which is why the fiscal expansion achievements in the period 2009-2011 mirror principally the high price of missed opportunities," the Prime Minister explained. He went on to emphasise that the real level of Slovenia's GDP was currently below the level of five years ago, that the country had lost a whole decade in terms of GDP per capita and purchasing power and that the real level of investment had even declined below the level of thirteen years ago.

"The more than eight billion of borrowing in 2009-2011 resulted in a one billion decline in GDP and 48 000 unemployed persons instead of in higher economic growth," he continued and pointed out that, by adopting the two draft budgets, the Government tried to make good the promises that we had failed to keep during the past three years and to restore confidence of domestic and foreign trading partners in Slovenia's capacity to keep government spending under control. "This time too, this goal is not easy to achieve and it is not an easy task, as the autumn forecasts for the euro area as a whole and for the global economy are worse than those made in spring and they also relate to Slovenia," he added. 

In his address, Prime Minister Janša pointed to the downward trend in funds for investment that is essential to economic recovery and stressed that the two draft budgets contained a considerably higher ratio of investment funds with respect to salaries and material costs. In this context, Prime Minister Janša also graphically presented a comparison between the 2004-2008 fiscal policy, which was based on a relatively higher growth in investment and material costs, reduction in transfers, a relatively moderate increase in the public sector wage bill and fiscal policy in the past three years. Based on comparative data, Prime Minister Janša explained the urgency to take action, as it was "The flexible part of the budget in which cut can most easily be made without being immediately noticed and without adopting painful legislation and adjustments. The price for such conduct is paid only after a few years. And those years are upon us now".

Prime Minister Janez Janša went on to outline the other key measures that Slovenia should adopt in order to revive economic growth. He briefly presented the need for the rehabilitation of the banking system, greater flexicurity in the labour market, the stabilisation of the pension system and a transparent and efficient management of state-owned assets. "This is not only the Government’s position, this is not only a fact that is clearly perceptible even without broader knowledge of the economy, but is also the official position of the European Commission, the European Central Bank and the International Monetary Fund," he said about the institutions whose opinion is, according to him, very important in the light of Slovenia’s international situation and has an impact on the country’s credit rating and the value of the state-owned assets.

After the presentation of the aforementioned fundamental measures, the Prime Minister stressed that their adoption still did not imply austerity and that Slovenia would have to borrow a billion euro per year over the next two years because of the budget deficit. He recalled the successful but less favourable borrowing on the dollar market, which would be, in his opinion, considerably lower if Slovenia had included the fiscal rule in its Constitution on time. "With this operation, we put our credibility at stake for the last time. Those to whom we presented these measures believed that they would be implemented, but, as I said, this was the last time that they trusted it in advance. Next time they will actually have to be and will, one way or the other, be implemented; otherwise, Slovenia will not be able to navigate its way through the turbulent waters of the crisis and will lose a part of its sovereignty," he added. 

The Prime Minister identified the restoration of the confidence of investors on international financial markets and the adoption of macroeconomic and other structural measures aimed at ensuring long-term growth potential for Slovenia's economy as one of the objectives. The Prime Minister reiterated that the country’s future was at stake and that it depended on us alone.  "The measure proposed, the budget for the next two years, shows the way out of the crisis and towards further growth. The Government, therefore, proposes that you support the budget and the accompanying documents," urged the Prime Minister on conclusion. 

Prime Minister Janez Janša then answered some questions from opposition deputies of Positive Slovenia Deputy Group – Maša Kociper and Alenka Bratušek, from the head of the Social Democrats Deputy Group, Janko Veber, and from a deputy from Slovenian Democrati