Slovenia: From “Return to optimism” to “A step in the right direction”

Slovenia: From “Return to optimism” to “A step in the right direction”

Newspaper Dnevnik in Slovenia analyses the new EUR 2 billion stimulative package introduced by the government in order to mitigate the coronavirus crisis effects on state economy.

The newspaper finds the coronavirus crisis package introduced by the Slovenian government a step in the right direction, but it also finds it modest compared to Germany’s 750 billion rescue plan and points to some shortcomings.

The government package is valued at EUR 2 billion in addition to measures worth EU 1 billion adopted by the previous government, which combined equals to one-sixteenth of Slovenia’s GDP. The government is promising further measures with up to EUR 5 billion in additional funds mentioned.

“To put it differently, while the German government has taken action based on the worst-case scenario at the moment, the assumption of a 20% fall in GDP, Slovenia picked IMAD’s most favourable outlook as a starting point”, writes the paper under the headline “Reserved Step in the Right Direction”.

The paper hopes that the government will clear up some uncertainties such as how long individual measures will be in effect, suggesting most should last for at least as long as schools remain closed.

It also suggests the government should fully cover the cost of pay of temporarily laid-off workers.

The government should also state its position as to the realistic possibility that some company loans would have to be transformed into ownership stakes and that some companies may need to be nationalised to be defended against takeovers, in particular by companies outside Europe.

“This is why the government would do best to consult not only select individuals in drawing up the next package but also representatives of systemic institutions such as Banka Slovenije, Bank Assets Management Company, Slovenian Sovereign Holding, SID Bank and IMAD. Even if their leaderships were appointed by the previous coalition”.

Newspaper Delo’s front-page commentary on Wednesday argues that “optimism has returned to Slovenia with the EUR 2 billion stimulus package” and that the concerns about how bad things will be will now be replaced with a search for ways forward.

Compared to the last crisis, the incentives are much more spread out this time, but the stimulus package will only be enough to patch up the wounds and ease the pain brought by the epidemic, the paper says in Return of Optimism.

However, comparing the current situation to the pains of an athlete only starting intense preparations for a season, Delo says that the government will need to preserve this new hope all the way until a full recovery, or else the scenario from the previous crisis could be repeated.

The paper calls for proactive measures as well, for instance, the renovation of state and regional roads, while stressing that the key will lie in the Slovenian manufacturing industry being ready to join the incentives of Slovenia’s trade partners and In a position to benefit from EU’s aid.

The former will require a quick response and a competitive edge, meaning companies will have to be ready with proper staff, materials, funding sources and potential state incentives.

To secure the latter, the government should significantly reduce the administrative obstacles that now require for years to pass before an idea can materialise./ibna