The Slovenia Times

Lagging Behind in Fiscal Consolidation


"Everywhere, this is a painful measure, and will be in Slovenia too," the prime minister warned. "The key and most painful thing, make no mistakes, is balancing expenditure with income."

He stressed that in addition to consolidating public finances, Slovenia would also have to adopt measures for growth and job creation in a very short amount of time.

"The key problem is that all these measures will have to be implemented together, which is considerably more difficult than if you have some time to consolidate public finances first...and then slowly expand manoeuvring space for re-starting economic growth," Janša said.

"This will be a challenging task and sacrifices will have to be made," he warned.

He stressed that the European documents discussed at the two-day summit "shatter an illusion very much present in Slovenia that passing a pension reform will solve all the problems".

Slovenia's real age of retirement is slightly lower than Germany's, but the latter has a record-low unemployment, record growth and is the engine of the European economy, while Slovenians work more but still have all the problems we are currently facing, Janša explained.

"This means that the solution is not only the pension reform. That is only a part of what needs to be done for structurally adapting to the trends in the future," he stressed.

Janša also touched on the introduction of a European financial transactions tax. He said Slovenia was leaning towards the tax, adding it might even introduce its own measures should the bloc fail in implementing such a measure.

Janša explained that the government was looking for new income sources that would not burden directly the labour costs or the economy in general. The tax on financial transactions is a step in that direction, he believes.

According to Janša, the two-day EU summit confirmed expectations that the atmosphere in the EU was turning "into a positive direction, but this does not mean the end of trouble nor is it a signal of the end of trouble".

The EU is paying a high economic and social price as a result of the crisis, Janša said, pointing to the record unemployment figures. This price is an additional motivation for fulfilling what has been agreed, he stressed.

"It is difficult to say that this meeting was ground-breaking in the sense of seeing the light at the end of the tunnel. But there was a feeling that the financial crisis is largely stabilised and that Europe can again turn to generating economic growth and jobs, thus creating a real foundation for prosperity," Janša concluded.


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