Slovenia: Gov’t introduces bill to ease the economic situation

Slovenia: Gov’t introduces bill to ease the economic situation

The Slovenian government has adopted an emergency bill to allow banks to defer liabilities of companies, co-operatives, self-employed and farmers by 12 months. Banks will be compelled to do so for those whose operation has been thwarted under government measures to contain the coronavirus outbreak.

Addressing reporters after the government session on Wednesday, Finance Minister Andrej Šircelj said the deferral concerned liabilities under loan agreements closed with banks or savings banks.

“Companies, co-operatives, sole entrepreneurs, self-employed and farmers will be able to reach an agreement with banks to defer liabilities for a period of 12 months”, Šircelj said.

Banks will be able to defer debt payments under the “condition that the company is solvent and is in fact in business and is paying taxes”, the minister said.

State news agency STA reported that banks would be obliged to grant such a deferral to businesses that have been unable to do business under a government decree, such as bars or restaurants.

The borrowers will need to settle on the terms and conditions of the deferral with the creditors themselves.

“Banks already have the option to restructure debt; if the borrower has difficulties they take that into account. Then a new plan will be drawn up considering the new situation and both parties will sign a new document and the loan will be repaid under the new terms”, he said.

Banks cannot deny deferral applications without grounds.

The government has notified the Slovenian Central bank of the initiative, which Šircelj said was not averse to the proposal.

“I believe the liquidity in the banking system today is stable and strong so that this bill will not affect the financial system or financial stability in the country in any way whatsoever”.

However, Šircelj said that banks were not enthusiastic about the law. He could not say yet how many entities would be able to benefit from the deferral or what it would mean for banks.

The government will notify the European Central Bank (ECB) on the bill./ibna