Opposition accuses govt of covering up fiscal hole

Ljubljana – Two centre-left opposition parties have accused the government of failing to come up with general government documents for the coming period because it does not want to talk about a “huge hole” in public finances ahead of the election.

Speaking for her SAB party, Alenka Bratušek, who served as PM in 2013-14 during a debt crisis, pointed to a EUR 750 million shortfall that she said resulted from a EUR 250 million deficit in the pension fund and a EUR 500 million budget shortfall as a result of new laws.

Her comments come after the Fiscal Council warned that it was yet to receive from the government a general government budgeting framework proposal for 2023-2025 and a draft stability programme for 2022.

The government has also not yet got formally acquainted with the spring forecast of the Institute of Macroeconomic Analysis and Development (IMAD), initially planned for the cabinet session on 23 March.

Bratušek said today the government did not want to take note of the latest forecast because the figures were worse than those in the autumn forecast.

This was also the reason why the government has not yet drawn up a stability programme, a document that needs to be submitted to Brussels, and a draft general budget framework, which serves as a basis for the state and local government budgets and health and pension insurance funds.

Bratušek said that if the government had drawn up those documents it should have said what followed, warning of the risk of an austerity law modelled on the one adopted by a Janša-led government in 2012.

Similarly, Social Democrat (SD) Milan M. Cvikl commented that the current government “has no interest whatsoever in what will happen after the election”.

“This government hasn’t adopted even IMAD’s assessment that Slovenia’s development problems are much bigger because it thinks last year’s 8% growth on a 5% deficit is a major success, which it isn’t,” he told reporters.

Considering the number of measures adopted, including the income tax reform, it would have to show “we have a big hole in public finances already in 2022, let alone in 2023”.

Interior Minister Aleš Hojs said the government would submit drafts of the budgeting framework and stability programme to the Fiscal Council and National Assembly after the election.

He denied the allegation that the government had not endorsed the IMAD forecast because of a downgrade, but said it wanted to weigh “whether all input parameters are realistic or not”.

Hojs, who is also a vice-chairman of the Democratic Party (SDS), said past experience showed IMAD projections may have turned out to be “a bit overoptimistic” or “understated”.

“It’s worth remembering such a forecast by IMAD is also very important for potential future borrowing by this or any other government, so it’s only right these estimates be as realistic as possible,” he said.

Under the fiscal rule act, the government needs to submit the budgeting framework and a draft stability programme to the Fiscal Council at least 20 days before the deadline for the programme’s submission to the European Commission, which EU member states need send in by the end of April.

The European Commission in March downgraded its economic forecast for Slovenia by 0.4 percentage points to 3.8% for this year, followed by a more subdued growth of 3.6% in 2023.