The Slovenia Times

Party Heads Agree on Golden Fiscal Rule


Outgoing Prime Minister Borut Pahor, who hosted the meeting in Ljubljana, told the press that the rule had not been determined yet, as the government first had to base the level and structure of debt on certain principles.

Pahor added that the proposal for relevant constitutional changes would be drafted by the government, and then filed for parliamentary procedure by deputy groups.

According to him, this is a very important and far-seeing measure, because the EU summit at the end of January will most probably decide that golden fiscal rules should be written into the fundamental laws of the EU member states.

Pahor deems important that the agreement is not being made conditional on support to other proposals for constitutional changes. The party heads however did call for the launch of some other constitutional changes, he added.

The constitutional nature of the rule will force future governments to either obey the rule or step down, Pahor stressed, adding he expected the parliament to endorse the proposal.

The introduction of the rule would also trigger a mechanism which would regulate the implementation of referenda on fiscal matters, as the Constitutional Court would have a clear foundation when assessing whether individual referendum motions are justified.

Pahor noted that this was not about restricting the right of citizens to making decisions at a referendum, but about preventing debt from undermining the sovereignty of the state.

Economist Igor Masten of the Ljubljana Faculty of Economics pointed out that the golden rule would have to be enshrined in the Constitution quickly, preferably by the end of March, as Slovenia risks breaching the debt ceiling otherwise.

He also called for a safety limit set below the 48% ceiling that would trigger preventive action. "Waiting for the ceiling to be breached and only then taking action is much worse than reacting sooner," he told the STA.

Moreover, the public need to be told the ceiling is needed to protect the welfare state. "It is the only thing keeping the welfare state alive in the long run."

The summit further agreed that the National Assembly will discuss a package of six bills recently adopted by the government in a bid to break a deadlock in parliament and address the current economic situation.

The new bill on public finances, which caps the state borrowing at 48% of GDP and the amount of state guarantees to 20% of GDP, will be a priority and will be discussed along the proposed constitutional changes.

The heads of parliamentary parties also agreed to propose to the National Assembly to reschedule the second round on voting on a PM-designate to 28 January, as Pahor, who is also an MP, is attending the EU summit on 30 January.

Implementing the requisite constitutional changes will not be straightforward as the parliament is yet to name all working bodies.

But an an informal meeting with Speaker Gregor Virant in the afternoon, deputy group leaders agreed to set up a constitutional commission pending a final stamp of approval by the college of deputy group leaders on Wednesday.

Moreover, in order to allow a debate on the constitutional changes the powers of the the Joint Committee, which is entrusted with debating EU affairs and is one of a handful of working bodies that has already been established, will be temporarily expanded.


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