The Slovenia Times

Govt adopts bill to defer businesses' debt


Addressing reporters after the government session on Wednesday, Finance Minister Andrej Šircelj said the deferral concerned liabilities under loan agreements closed with banks or savings banks.

"Companies, co-operatives, sole entrepreneurs, self-employed and farmers will be able to reach an agreement with banks to defer liabilities for a period of 12 months," said Šircelj.

Banks will be able to defer debt payments under the "condition that the company is solvent and is in fact in business, is paying taxes", the minister said.

Banks will be obliged to grant such a deferral to operations that have been unable to do business under a government decree, such as bars or restaurants.

The borrowers will need to settle on the terms and conditions of the deferral with the creditors themselves.

"Banks already have the option to restructure debt; if the borrower falls in trouble they take that into account. Then a new plan will be drawn up considering the new situation and both parties will sign a new document and the loan will be repaid under new terms," he said.

Banks cannot deny deferral applications without grounds.

The government has notified of the proposal the Slovenian central bank, which Šircelj said was not averse to the proposal.

"I believe the liquidity in the banking system today is stable and robust so that this bill will not affect the financial system or financial stability in the country in any way whatsoever."

However, Šircelj said that banks were not enthusiastic about the bill. He could not say yet how many entities would be able to benefit from the deferral or what it would mean for banks.

The government will notify the European Central Bank (ECB) on the bill.

"The information I have within the euro group indicates monetary policy in this aspect will be relaxed. The ECB needs to take the situation into consideration. Nor will banks have any liquidity or capital adequacy problems because of that."

Šircelj said that further measures would depend on the extent of the epidemic. "We're prepared to do everything necessary," he said, adding that financial impact assessments would be made first.

He confirmed that the staff in critical services involved in the coronavirus combat effort would be rewarded. There "will be money for those people and for bonuses".

Earlier, the central bank said that a deferral of debt payments would also be made possible for individuals, but no other details are available yet.

The bill will be fast-tracked through parliament, presumably at Thursday's emergency session.


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