The Slovenia Times

PM Defending Continious Borrowing


If the government wanted to eliminate budget deficit as early as this year, expenditure would have to be cut by EUR 1bn. This would entail 40% staff or pay cutbacks, a 20% reduction in pensions and all but scrapping social transfers, Bratušek told MPs at the outset of a new regular session.

"You won't see that movie in the Alenka Bratušek government and I hope no one in the future gets the chance to do something like that," Bratušek responded to MP Andrej Šircelj of the opposition Democratic Party (SDS), who challenged her about government fiscal measures.

The PM denied Šircelj's claim that the budget deficit could reach up to 5% of GDP this year because of EUR 500m higher expenditure. She said the government was sticking to its plan to reduce the budget deficit to 3.3% of GDP, disregarding bank recapitalisations and other exceptional outgoings, and to 2.5% in 2015.

Noting that fiscal consolidation was conducted in accordance with recommendations from the European Commission, the PM said the government did not set out to balance public finances at any cost like the previous, SDS-led government did by the end of its term.

She argued that a raise in VAT had not affected exporters, the driving force of the economy, or consumption as much as some had predicted. She repeated the argument that the real estate tax was "the fairest decision we could have taken".

The government's main goal is to cover the debt resulting from the bailout of banks, through management and sale of assets that have been transferred to the Bank Asset Management Company (BAMC), which she said "cannot be done overnight".

Quizzed by Matej Tonin of the opposition New Slovenia (NSi) what the government would to speed up company deleveraging, the PM cited data showing that BAMC was currently involved in 43 large and nine smaller cases of company deleveraging, its total exposure in these cases being EUR 1bn. But she said she too would "wish for these procedures to run faster".

Bratušek also mentioned a package of measures that is being drawn up by the Economy Ministry to kick start growth. Aside from deleveraging and comprehensive restructuring the package would provide access to financing under easy terms, investment in research and development, more investment, education and jobs.


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