There is no Choice

7


Austerity is definitelly affecting growth, but…

Šušteršič explained that the growth prospects for 2012 are not encouraging, admitting this is in part due to the austerity measures. But this is the price we have to pay to regain higher growth in the coming years, he stressed. Slovenia has been one of the countries that suffered most among the EU members, he explained. The decline in GDP was one of the largest in the EU, partly because of structural weaknesses before the crisis and because the measures to fight the crisis were not appropriate.”We now have no other choice than to start lowering the deficit…and trying not to kill the economy by doing that.”

Relying on the private sector

The government coupled the austerity measures with a series of tax breaks, including a gradual reduction in corporate income tax from 20% to 15% through to 2015. The government wants to open the space for the private economy to grow, Šušteršič said, calling on the business community to play their part. He stressed that the government had a clear majority in parliament, but warned that a call for a referendum could derail their efforts. Businesses should also talk to the people and explain to them why the measures are necessary, not only the government and the unions. “ You also have the opportunity to talk to the people and explain why this good for the future. We cannot do it alone, it is also your responsibility.”

The call for a strategy of foreign investments

AmCham Slovenia President, Matej Potokar, meanwhile voiced support for the government austerity package but also warned that Slovenia needed a strategy for attracting foreign investment.
Restructuring will not be possible by merely cutting costs, he said, stressing that measures for generating growth and revenue will also be needed. Potokar, Microsoft’s Senior Director for Business Solutions for Central and Eastern Europe, pointed to Slovenia’s advantages such as the exceptional strategic position, high quality of life and well educated labour force. He praised the government plans for lowering corporate income tax and raising investment allowances but was critical of plans for a 50% tax bracket for those earning more than EUR 70,000 saying it was in direct opposition to plans for attracting the most educated and productive workers.