The Slovenia Times

Budget Shortfall by May at 70% of Annual Target


The opposition-dominated Public Finance Oversight Commission expressed concern over the rising public debt and the gap between budget revenue and expenditure, urging the government to submit within 30 days a detailed fiscal consolidation plan, with financial effects of measures and dates for their implementation.

Commission chair Andrej Vizjak (SDS) underscored that Slovenia's government debt had increased by about EUR 20bn over the past six years, of which almost EUR 12bn in the past year alone, criticising the government for only stating goals rather than measures or financial effects in documents sent to Brussels.

Responding to MPs queries, Finance Ministry State Secretary Mitja Mavko explained that fresh borrowing went in part to repay old debt (EUR 3.5bn in 2014 and EUR 2.9bn in 2013) and in part to finance the budget deficit (EUR 1.5bn in 2013 and EUR 1bn planned for 2014).

A third chunk was earmarked for extra financing, for example EUR 3.6bn for the bailout of banks last year.

Mavko also rejected a suggestion by Andrej Šircelj (SDS) that Slovenia borrowed unnecessarily in February at an interest rate of 5.5% when it could have borrowed now at 3%, explaining that the yield on Slovenian bonds would have been higher today had the government not had enough funds on its accounts.

MPs had moreover been given insight into the list of investors subscribing for Slovenian bonds, a document labelled confidential. "The investors are well dispersed geographically- and type-wise," Mavko said, adding that liabilities over the next 10 years are evenly distributed at around EUR 2bn a year.

Mavko also presented a report on the implementation of the budget, which shows the deficit amounted to EUR 707m by the end of May, which compares to EUR 1.14bn in the same period a year ago. A surplus of EUR 15.1m was recorded for May.

Budget revenue in the first five months of the year amounted to EUR 3.45bn, or 17.6% more than in the same period a year ago, as tax receipts rose 14.7% to EUR 2.67bn (tax on income and profit going up 64.8% to EUR 554.6m and tax on goods and services rising by 5.8% to EUR 2.02bn, VAT alone up 9.5% to EUR 1.25bn).

Overall budget revenue stood at EUR 4.15bn, up 2.1% compared to the same period last year. Receipts from EU budget increased by 1.8% to EUR 358m. Slovenia is expected to get almost EUR 1.2bn back from the common budget this year after it had received EUR 934m last year.

The costs of interest on loans paid in January-May were up 14% on the same period last year to EUR 662.4m. The cost of interest rates paid this year is to total almost EUR 940m.


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