The Slovenia Times

Govt Facing Anti-Austerity Push Amid Continuing Consolidation


A lot also remains to be done to alleviate the debt burden suffocating businesses.

The government is currently facing the adoption of the budgets for the coming two years, which are expected to stand slightly above nine billion euros.

The available data indicates that if fiscal constraints are to be met, expenditure will have to be slashed significantly compared to this year - for next year by as much as EUR 675m.

This signals tough negotiations, among the ministers and especially with civil servants, who are demanding after years of austerity that the economic growth start being reflected in the content of their wallets.

It presently looks like the government is only ready to restore the possibility of promotions, which would mean around EUR 180m in additional expenditure. The government hopes to offset this with more effectiveness in public spending and public investments.

On the revenue side, the Finance Ministry is planning a tax reform that would shift part of the tax burden from labour to capital and property. As part of this, a real estate tax could be introduced in 2017.

Much remains to be done to tackle overindebtedness in Slovenia's corporate sector and there are plans to join forces with private capital to form a special company that would manage the claims of SMEs.

The Economic Development and Technology Ministry meanwhile wants to focus on improving competitiveness, boosting exports and attracting foreign investments. As part of efforts to strengthen economic diplomacy, Slovenia is planning to reopen its embassy in Iran next year.

Also seen as an opportunity is the long planned second railway line to the Koper port, for which the Infrastructure Ministry wants to secure as much EU funding as possible and then obtain a private partner. The project is currently estimated at EUR 1.4bn.

The government moreover wants to finalise Slovenia's energy strategy, while the state and its energy companies will need to find a way out of the low electricity prices on the market and what seems like an economically unviable new generator at the coal-fired power station in Šoštanj, just completed for EUR 1.4bn.

The Justice Ministry is preparing a new strategy for the development of the judiciary. One of the measures standing out in plans for next year is the abolition of the institution of investigating magistrate.

"Where there is no claimant there is not judge," Justice Minister Goran Klemenčič has moreover recently announced, indicating the need to follow up the beefing up of the prosecution with effective police work.

The understaffed and underfinanced police force has prompted Interior Minister Vesna Györkös Žnidar to announce efforts for changes.

The ministry is also facing challenges posed by the refugee crisis and is announcing a new act on international protection needed to transpose the common European asylum system.

The Defence Ministry is seeking the adoption of a new umbrella legislation governing defence policy, which is also expected to deal with labour issues, an area that has been increasingly problematic for the army due to ongoing austerity and the ageing of the force.

Related priorities include a gradual increase of defence spending and investments into the modernisation of the Slovenian Armed Forces.

The Foreign Ministry is also expected to contribute to the stabilisation and providing of security. One of its major concerns presently is however the stalled border arbitration process with Croatia.

In agriculture, the main ambitions include supporting Slovenian farmers with "buying Slovenian" schemes and boosting of exports, especially to China. More effective forest management via a central state company is another priority.

In health care, changes to the health insurance system and rights covered by compulsory insurance remain a priority for next year. Changes are also in the making concerning patients' rights as well as health care institutions, which are to be given more independence as well as responsibility.

A long awaited law on long-term care is expected to enter public debate in the autumn, while there have also been calls for another pensions reform.

Youth issues waiting to be addressed include access, possibly free, to meals in schools, as well as the regulation of apprenticeship and housing issues, which are being addressed with a recently adopted programme.

The Culture Ministry is announcing a strategic reflection on a modernisation of the culture system, the media and cultural heritage protection.

An overhaul of the national programme for culture is in the making, while the minister is facing unsettled passions among culture workers who are protesting against continuing cuts.


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