STA, 21 November 2018 - The European Commission has established that Slovenia'a draft budgetary plan for 2019 is at risk of non-compliance with the requirements of the Stability and Growth Pact. It has called on Slovenia to take appropriate measures and send a revised plan back to Brussels at least a month before submitting the 2019 supplementary budget to parliament.
The assessment published on Wednesday had been expected, as the new government, which took over in September, has sent the draft budgetary plan for 2019 under the no policy change scenario while it has recently engaged in changes to social transfer and pay policies. Slovenia also received the same mark last year.
The European Commission has called on Slovenia to take measures to bring the budget in line with the EU rules, especially when it comes to the difference between the recommended and planned structural effort and the difference between the recommended and envisages rate of growth of primary net expenditure.
Four other countries at risk of non-compliance
Joining Slovenia in the group of countries at risk of non-compliance are Belgium, France, Portugal and Spain.
The Finance Ministry said that Slovenia would sent to the Commission next year a draft budgetary plan which would be "as compliant as possible with the EU rules". It will be prepared along with the 2019 supplementary budget.
The ministry added that it had already informed the Commission in mid-October, when the draft plan was sent to Brussels, that a new draft would be made at the beginning of next year.
It said that the plan had been submitted under the no policy change scenario because "it is completely usual that right after a government change draft budgetary plans do not include envisaged measures."
The European transport commissioner, Slovenia's Violeta Bulc, commented on the assessment of Slovenia's budget by pointing to graphs for the last 15 years and recognising "very demanding, but successful steps Slovenia has made in the last four years."
According to Bulc, Slovenia has recorded a very good economic growth in the recent years, driven by strong investments and increased exports. The growth of public investments will continue to have a positive effect on GDP, she added.
The commissioner stressed, though, that Slovenia should not forget about the need to maintain stable public finances and ensure sustainable growth. This means a careful increase in public spending - of wages and social transfers.
Slovenia has addressed its macroeconomic imbalances
In a written statement, Bulc pointed to two aspects which represent a risk for the proposed budget to fail to comply with the requirements of the Stability and Growth Pact.
"What needs to be adjusted is the difference of 0.3% of GDP in state expenditure and the difference of 1.4% of GDP in reducing debt to up to 60% of GDP," she added.
Meanwhile, Slovenia will not undergo an in-depth review of macroeconomic imbalances this year for the first time after 2011.
The decision was expected as the European Commission announced in March that Slovenia had fixed its macroeconomic imbalances, six years after it had entered the excessive macroeconomic imbalances procedure.
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