Fiscal Council finds government coronavirus measures justified
The Fiscal Council, in a release issued on Tuesday, ascertained that the Slovenian government's measures were for the most part in agreement with recommendations by international organisations and by scope comparable to measures taken by other countries.
"Despite the temporary departure from fiscal sustainability over the mid term being justified and taking into account the discussions upon the passage of the [EUR 3 billion stimulus] law, we are calling on all stakeholders that in taking further measures they follow even more than in the process so far the principles of the targeted nature of the measures addressing the consequences of the epidemic, their simplicity and time limitations," reads the release.
Considering the increased social and economic uncertainty and the substantial cost to public finances, the Fiscal Council recommends a more careful consideration as to when or in which phase of the battle against the epidemic certain measures would be the most effective and when potential stimulus measures would be needed to restart the economy.
The council says that it will crucially depend on the combination of the measures taken and their implementation whether the Slovenian economy will await the end of the epidemic in a shape that will allow it to exit the crisis as fast as possible.
A fast exit from the crisis and restoration of trust is one of the urgent conditions required to ensure social security and economic prosperity as well as to maintain fiscal sustainability in the long term.
International organisations recommend taking measures in a sequence that best addresses individual fields affected. "On those recommendations it is first necessary to ensure suitable means meet the health system's needs. In the next phase it is necessary to see to preserving jobs and allowing the economy to function as normally as possible."
Back in March, the Fiscal Council said that declaring an epidemic allowed temporary deviation from the mid-term structural budget balance. Given the projections of a substantial economic contraction, the measures taken will result in a high general government deficit and will push up government debt.