The Slovenia Times

Fiscal Rule Passes First Reading



The bill implements the fiscal rule after it was enshrined in the Constitution in May 2013 in line with the EU's fiscal compact signed in March 2012.

Rather than immediate, the implementation of the rule will be gradual, which Finance Minister DuĊĦan Mramor said would enable the country to avoid jeopardising economic growth.

The bill, which requires a two-thirds majority, allows for a deficit and loan taking at time of recession and a surplus and paying out of the debt at times of economic upturn.

"In the mid-term period no new debt is generated - the state is not taking out new loans but is spending as much as it generates," Mramor said as he presented the bill to MPs on Wednesday.

According to him, exceptions will be allowed only in case of extraordinary events of big proportions.

In line with the bill, the National Assembly will determine the target balance and maximum level of expenditure for 2016 and 2017 within 60 days after the act takes effect.

The implementation of the law will be overseen by the Fiscal Council as an independent body.

Comprising three members, the council is to be appointed by the National Assembly with nominees put forward by the president, the central bank and the government.

The members, who need to be experts in finance or macro-economy, will be elected for a five-year term and can only be appointed for up to two consecutive terms.

While the bill is vague on the details, the passage at first reading was secured after parties signed a separate pledge that the details will be hashed out.

The commitment states that the bill, along with draft versions of amendments agreed after it was submitted to parliament, constitutes the appropriate basis for the next reading.

The only party to oppose the fiscal rule in principle was the United Left (ZL), which called for removing it from the Constitution.

The opposition Democratic Party (SDS) wanted the rule to be implemented immediately, and the fellow New Slovenia (NSi) called for stricter provisions.

However, both parties have contributed their votes with the stated aim of trying to tighten the provisions in subsequent readings.

Mramor said after the vote that he had not expected the bill to get such a wide support at first reading and that the government would strive for the final version of the bill to also enjoy such a wide support.

He said the passage of the bill was crucial for Slovenia, as it was the last eurozone country to not have fully implemented the fiscal rule yet.


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