The Slovenia Times

EC to Assess Slovenia's 2014 Budget by Mid-November


The Commission will analyse the budget in detail in the coming weeks, Somin O'Connor, the press relations officer of Economic and Monetary Affairs Commissioner Olli Rehn told the STA a day after the budget was adopted by the government and sent to the National Assembly.

"At this stage it is premature for me to make any substantive comments on the budget...We will also go into a profound analysis of all of the underlying assumptions and of the quality of the fiscal measures," said O'Connor.

Touching on targets required of the budget document, O'Connor said it was very important that "they broadly reflect the requirements that were set by the Council in its recommendations earlier this summer and adjustment of the budgetary deficit in structural terms".

"We think that the adjustments should be weighted towards the expenditure side rather than the revenue side, so as to ensure that the budgetary adjustment has a minimal impact on growth," O'Connor moreover said.

Unofficially, one of the key guidelines in national budget assessments would be the requirement to focus two thirds of efforts to reduce deficit on budget expenditure and one third on budget revenue. The sources also clearly stated that cuts should focus on expenditure and not on investments.

Other sources in Brussels say that the Commission will examine Slovenia's public spending and tax structure to see whether there is a way to make the budget more growth-friendly and a lesser burden for productivity and industry.

In the past Brussels has advised member state to transfer the tax burden from labour onto consumption, environment and real estate.

Talking to the STA only hours after the Institute of Macroeconomic Analysis and Development downgraded its forecast for Slovenia, O'Connor said the Commission would release its economic forecast for member states on 5 November.

It is very important to boost confidence and to do that Slovenia needs to make determined progress on three fronts: fiscal consolidation, repair of the financial sector and privatising the fifteen companies identified by the government, O'Connor said.

He believes that Slovenia made good progress on the three key fronts last year because it passed several important reforms, including reforms of the pension system, referendum legislation and labour market.

The Commission meanwhile refused to comment on speculations that Slovenia might need international aid. Unofficially, the question of whether Slovenia will need aid is being replaced with the question of which aid programme Slovenia will need - either the banks programme with softer conditions or the comprehensive programme with stricter conditions.


More from Nekategorizirano