The Macroeconomic Situation in Slovenia is Becoming More Difficult

Due to the economic crisis and the state of the money market, Slovenia’s macroeconomic position is increasingly deteriorating, and the budget deficit for this year will be increased from 0.6 percent, as calculated by the previous government, to at least 2.5 percent of the national product, Slovenian media reported on Monday.

Prime Minister Borut Pahor’s government is responding to the worst global recession since World War II “far from optimally” and “with considerable confusion,” and the macroeconomic position of the country is becoming weaker, assesses Slovenia’s leading newspaper, Ljubljana’s “Delo.” The government’s measures, which promised employers 230 million euros for subsidizing wages in companies that are shortening the workweek due to the crisis, have “elements of populism” and mean wasting budgetary resources at a time when it is difficult to obtain new loans on the global money market, “Delo” adds, noting that Pahor has simultaneously forgotten to try to rein in “undisciplined” public spending across ministries.

The Ministry of Finance, according to Slovenian Television, has prepared a proposal for a budget revision under which the state budget deficit this year will rise to at least 2.5 percent, excluding the so-called pension and health funds which are managed separately. Together with health and pension funds, the deficit will exceed three percent of the national product, which is the “ceiling” for countries in the eurozone that Slovenia joined two years ago. The government’s advisor for financial issues, Mojmir Mrak, stated that funds need to be secured somewhere for the planned budget deficit and added that other countries are also borrowing due to the economic crisis. However, the deputy governor of the Slovenian central bank, Andrej Rant, told Slovenian Television that due to the financial crisis and distrust of banks, it will become increasingly difficult to obtain loans and that “breaking” the ceiling of three percent of allowed deficit could reduce the country’s credit rating.  (H)