Slovenian government considering savings to cover budget shortfall in 2015

Slovenian government considering savings to cover budget shortfall in 2015


Review Hari Stefanatos

Slovenian Prime minister Miro Cerar will suggested on Tuesday that the government will need to make up for the budget shortfall, which is in the region of 2.8% of the GDP. To do that it will require to make shavings across the board in 2015.

Cerar told reporters that apart from the necessary restrictive measures, the government is considering the “economics of the processes in the public administration”, most notable of which is the discussion regarding the pensioner’s holiday alliance. This refers to a EUR 40 million expense, which was put in the coalition contract by the Pensioners’ Party (DeSUS) as a condition for joining the coalition.

DeSUS held a meeting yesterday to discuss the holiday allowance, with its president Karl Erjavec stating that the party is willing to consider a compromise given the difficult economic situation of the country, but under no circumstances will it consent to its complete withdrawal, as  was proposed by Finance Minister Dušan Mramor. In such a scenario DeSUS president “DeSUS stated that his party “would not be able to participate in such a government”.

Cerar said the government would attempt to find “compromise solutions” that will reduce the general government deficit, promote economic growth and “preserve welfare”, and despite the fact that the Finance ministry calculations show that the public sector will bear the brunt of the proposed spending cuts, the Slovenian premier said the government must proceed with caution, so as not to “demotivate” civil servants.

The government has still not come up with a concrete budget plan for 2015, other than the fact that spending will be reduced, since as it is the budget does not appear viable. Most of the cuts will come from a reduction of the public sector wage bill (negotiations with the trade unions will start shortly), while the Finance Ministry has already announced revenue-side measures, including higher tax on banking and insurance services.

Negative reactions have already started from the unions, with the education trade union SVIZ announcing that it will go on a strike should the government insist on additional wage cuts, since they point out that wages of teachers in Slovenia remain below OECD average. This position is reinforced by a survey conducted for the European Commission by Eurydice, the network on education systems and policies in Europe, which showed that the purchasing power of Slovenian teachers is still “significantly below the level of 2009”, having dropped by 17%, while it is barely noticeable in other countries.

The rest of the coalition parties did not exhibit strong reactions, but are waiting to be fully informed on the details before commenting, or that they will wait for the adoption of the final version before making any statements.

Opposition parties on their part have voiced their criticism on the fact that the budget was first presented in Brussels and not in the National Assembly. United Left in particular said that it expects massive cuts oriented towards social transfers and the public sector as opposed to corrupt public procurement or the “energy lobby”.

(Source: Sloveniatimes)