The Slovenia Times

Budgets for 2017 and 2018 passed


However, the government expects to close a deal with the trade unions before the start of the new budgetary year. If not, it will take measures to keep the expenditure within its plans without harmonising them with the unions.

Following a severe economic crisis, Slovenia's economy has been growing again since 2014, which is also expected to continue in the next two years.

Budget revenue is therefore planned at EUR 8.8bn in 2017, up 5% from this year's estimated revenue, rising to almost EUR 9.3bn in 2018.

A more moderate growth is planned for expenditure, which will rise by almost 4% to EUR 9.5bn in 2017 and by another EUR 46m to almost EUR 9.6bn in 2018.

The budget deficit will thus amount to 1.6% of GDP in 2017, down from 2.2% this year, only to fall to 0.7% in 2018.

Following the passing of the 2015 fiscal rule law, the parliament set this spring the upper limit for expenditure for several years in advance.

The prime minister and the finance minister told the MPs this was the reason why not all austerity measures could be lifted.

Pay restrictions could be lifted gradually and social transfers and pensions raised over a certain period of time.

Despite this, pensions will rise by 1.15% in January 2017, which will be the first regular pension rise after the crisis, which hit the country in 2008.

Under the pension law, however, pension should rise by 1.2%, but Finance Minister Mateja Vraničar Erman said this would not be feasible.

Hoping pensions can further rise during the year, the coalition Pensioners' Party (DeSUS) is happy. "A pensioner with an average pension will get EUR 8 more a month," said MP Marija Antonija Kovačič.

"While pensions will at least partly rise, disability, parental and children's allowances and unemployment benefit will not rise at all for another two years," said Luka Mesec of the opposition United Left (ZL).

This is why the ZL would not vote for the budget implementation bill, a rather technical piece of legislation into which the government had been including austerity measures, some of which it is now gradually lifting.

Had the government not changed the income revenue scale to the benefit of 10% of best earners earlier this year, it would have already had the money to lift the remaining austerity measures, said the ZL.

Unhappy with the budgets are also the other opposition parties, which for instance highlighted they were based on "wrong numbers" given that they were not harmonised with the public sector trade unions.

Jožef Horvat of New Slovenia (NSi) would also like to see local communities get more funds.

These will get EUR 530 per capita as lump-sum average in 2017 (eight euros more than this year) and EUR 536 in 2018, which municipalities deem insufficient.

Employment restrictions remain in place, with staff in the public sector remaining at the level from the end of 2015. Ministries will however be able to employ up to ten new workers for jobs related to structural reforms.

The government will be able to borrow almost EUR 3.6bn to implement the budget in 2017 and slightly less than EUR 3.4bn in 2018.

The government also reserved EUR 10m to cover the expenses of mass migrations in 2017.

Some funds were also allocated for preparations for Slovenia's presidency of the EU in 2021.

The budgets were initially accompanied by a special bill on public sector wages that would prevent the relaxation of all austerity measures as of 2017.

But since the government failed to reach an agreement with the public sector trade unions, the pay bill was shelved.

Since then, the two sides have agreed to resume talks, but not before Friday.

The inability to send to parliament harmonised budgets earned the government strong criticism.

Presenting the budgets to parliament on Tuesday, PM Miro Cerar said both budgets were future-oriented enabling business incentives.

He said the budgets would enable the government to pursue its key priorities: health, infrastructure, security, science and employment.

The government also argued it had drafted to the budgets with a goal of encouraging economic growth and consolidating public finances.


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