The Slovenia Times

PM: Artificial Dilemma Between Austerity and Growth Solved


He does not think many new measures are needed to kick-start growth, but mainly the implementation of those that have already been adopted.

The PM hopes that that the debate on the artificial dilemma between fiscal discipline and growth will now end. "Everyone agreed that both is needed and that it's just two sides of the same coin", Janša said.

As to the controversial topics such as the prospect of joint EU bonds, project bonds and financial transactions tax, "we heard little new actually, the views differ a lot", he said.

He said that a point repeatedly made was that issuing bonds jointly would mean a change to fundamental rules of the game in the EU, which would require a lot of time. Since most of the member states disagree with the proposal, Janša does not think it worthwhile to start the procedure.

Similarly, a majority of the member states oppose a European financial transaction tax. Still, Janša expects some form of the tax would probably be introduced eventually, but not any time soon yet.

He believes several EU members may try to introduce such a tax on their own before it is introduced at EU level. Slovenia too is considering this option.

"We'll probably opt for this step next year, unless agreement at EU level is reached before that, which I personally don't believe though," the prime minister told reporters after an informal dinner of EU leaders.

There was a bit more support for project bonds. "The debate today did not indicate any major consensus in principle, rather scepticism about project bonds, albeit at somewhat lesser level," Janša said.

Slovenia deems project bonds a good instrument when designed to realise the initial idea to help the countries that need stronger stimuli to growth. However, it is almost certain they will not be introduced as a general European instrument, as least a third of the member states said they did not need the instrument.

The latest meeting served as a preparation for the formal EU summit in June when EU leaders are expected to adopt a comprehensive package for growth and jobs.

Asked what new the package would bring, Janša said that "we don't need much new really". "The word growth did not emerge in recent months, this is a keyword that the European paradigm is build around," he commented.

"There's practically no proposal for measures to stimulate growth that is not contained in some of the European documents already adopted. It'll be probably a package of what can realistically be achieved from these documents at this time and a repetition of existing commitments, guidelines and programmes."

Commenting on the plans for a capital injection into the European Investment Bank, Janša said that considering the financing sources Slovenia could expect from the bank, it made sense to participate in the project, but that consensus had yet to be reached on the matter.

He said that Slovenia could chip in one to two million euros in the potential recapitalisation of the bank.

EU leaders also discussed national reform and budget plans that the European Commission will evaluate at the end of the month. The PM said that ever since it adopted the fiscal stabilisation package, Slovenia had been receiving messages that it was on the right path.

However, he also pointed out that Slovenia would now have to take the next step to carry out structural adjustments and secure long-term sustainability of public finances, which he said was the only condition for sustainable development.

Commenting on the contribution by the new French President Francois Hollande to the debate, Janša maintained that his participation "did not substantially change the mood".

Hollande's appearance confirmed the non-existence of the artificial dilemma between fiscal discipline and growth. "Balancing public finances is a very important goal for France as well and we also heard from them that this is the prerequisite to sustainable growth and development," the Slovenian PM said.


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