The Slovenia Times

Fiscal Rule, Bank Fund, Public Sector Pay on Parliament's Agenda

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Following Monday's questions' time when the prime minister and ministers answer questions from MPs at the start of each regular session, Tuesday will be dedicated to efforts to implement further savings in the public sector.

A bill on measures related to pay and other costs in the public sector in 2015 is a result of a deal the government and trade unions signed on 8 December after weeks of hard talks.

The bill is being rushed through parliament to take effect as of 2015 to extend into next year the existing austerity measures negotiated a few years ago.

These old extended measures will save the government EUR 313m.

An additional EUR 36m will come from a set of fresh measures, which is much below the EUR 130m target the government had in mind as it entered the austerity talks.

The additional cuts will be achieved for instance through reductions in performance bonuses and lower top-up pension insurance contributions.

Also agreed was a delay in promotions, while staff will able to choose a shortened working week (36 instead of 40 hours) for a proportional pay cut.

The deal was signed by 29 of 38 trade unions, with the rest rejecting it for various reasons specific to their lines of business (medical doctors, police officers).

Nevertheless, a sufficient number of trade unions have signed it for the new legislation to apply to the entire public sector.

Another item of the MPs' agenda is a bill to implement a zero-budget deficit rule or the fiscal rule, which was enshrined in the Constitution in May 2013.

A six-hour debate at first reading is planned for Thursday, with the government hoping to secure a two-thirds majority, or 60 votes in the 90-member legislature.

To persuade the opposition to join in, Finance Minister Dušan Mramor had a series of meetings with them before the government adopted the bill on 4 December.

While the Democratic Party (SDS) and the United List (ZL) oppose the bill, the other two opposition parties might contribute the missing six votes.

The bill would implement the constitutional provision requiring that Slovenia has a structurally balanced budget over the medium term, except in economic crises.

It is still unclear when exactly the new rule would kick in, but Mramor believes Slovenia could eliminate the structural deficit in four to five years.

The bill is much milder than a motion filed by the SDS, which would like to have a zero-deficit already next year.

Mramor described the SDS bill as excessively restricting fiscal policy's scope to tackle economic shocks.

A day earlier, parliament will debate a bill to establish a bank resolution fund which would finance measures to help banks in trouble.

The fund would be managed by the central bank, while the money paid into it would come from banks.

The banks would contribute EUR 195m as the start-up capital, with another EUR 150m coming in the form of guarantees.

The new legislation, which the opposition says was drafted in rush, is planned to take effect as of 2015.

The plenary session will end with a six-hour debate on a set of SDS-sponsored recommendations about the controversial investment into unit six at the Šoštanj coal-fired power station (TEŠ).

No concrete decision is expected from the debate as the recommendations have been rejected already at committee level.

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