The Slovenia Times

Standoff on Fiscal Rule Continues


The government had tried to postpone Tuesday's session dedicated to the fiscal rule after party leaders failed to find common ground on Sunday, but the session had been requested by the opposition Democrats (SDS), which insists it must go ahead.

The SDS expects that parliament will endorse the constitutional amendment on the fiscal rule and that the rule needs to take effect in 2015 as originally planned, even though the government has said this would require unacceptable spending cuts.

"The fiscal rule is a mechanism to protect public finances...which will enable us to resolve our problems without foreign aid," SDS vice-president Zvonko Černač told the press on Monday.

Prime Minister Alenka Bratušek has said implementing the fiscal rule in 2015 would require drastic cuts and insists it should be postponed to 2017.

However, the SDS claims the opposite: Postponing its implementation will lead to savage spending cuts if spending spirals out of control and international aid is required.

"The fiscal rule protects us from pension and welfare cuts," Černač said.

The SDS's refusal to budge on 2015 despite warnings that it was unrealistic to implement the fiscal rule so fast has earned it reproaches that it is acting irresponsibly, but MP Andrej Vizjak said this was not the case.

"This is not a matter of political is a vital message and a means of fiscal self-restraint," said Vizjak.

Despite the SDS's recalcitrance, the ruling Positive Slovenia (PS) hopes for a last-minute compromise, deputy group leader Jani Möderndorfer suggested today.

He said the PS would do everything it can to forge a compromise tomorrow, but if a "reasonable agreement" is not reached, it will orchestrate a vote to send the fiscal rule back to the Constitutional Commission.

Implementing the fiscal rule in 2015 would be an "anti-state measure" that could end up becoming a "stumbling block to growth," he said.

The coalition Social Democrats (SD) have already said they would endorse sending the proposal back to commission, while the opposition New Slovenia (NSi) said it would no longer take part in the commission if that happens.

The People's Party (SLS) main committee expressed in a vote on Monday the party's support for enshrining the fiscal rule in the Constitution. SLS head Franc Bogovič told the press that they wanted the rule implemented as soon as possible.

However, the exact year of the first implementation of the balanced budget rule should be determined after the government presents measures for the consolidation of public finance. Touching on one of the potential measures - a VAT rise - Bogovič said the increase would be "anti-social".

The standoff over the fiscal rule is seen by pundits as a power struggle between SDS leader Janša and PM Bratušek.

A commentator on public Radio Slovenija labelled it today as an "all-out battle for dominance" instigated by Janša as part of his "attack is the best form of defence" strategy.

Commentator Tomaž Celestina suggested the way to end the impasse would be for Bratušek to "finally start governing" and stop following the tempo dictated by the opposition.

Bratušek, who is "unskilled in controlling the governing game", should do what prime ministers are supposed to do: Take measures and firmly stand behind her actions, the commentator suggested.


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