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NEWS

The Government adopts the Economic Partnership Programme

Ljubljana, 30 September 2013 - At today’s regular session, the Government of the Republic of Slovenia adopted the Economic Partnership Programme, which will be referred to the European Commission. The Programme will also be discussed in the National Assembly.

The guidelines for Slovenia’s economic and fiscal policy for the 2013-2016 period are defined in the National Reform Programme and the Stability Programme, which were approved in May 2013. The European Commission reviewed both programmes, and the Council of the EU issued recommendation regarding Slovenia’s 2013 national reform programme and the Council’s opinion on the stability programme for 2012-2016.

 

In July 2013, the Council of the EU established that there is still excess fiscal deficit. Therefore, Slovenia is obliged to draw up an economic partnership programme with consolidation strategy in accordance with Regulation (EU) No 473/2013 of the European Parliament and of the Council of 21 May 2013 on common provisions for monitoring and assessing draft budgetary plans and ensuring the correction of excessive deficit of the Member States in the euro area.

 

The purpose of the document is to present the implementation of recommendation of the European Council and a presentation of priority measures and policies aimed at ensuring effective and permanent reduction of excess deficit.

 

Crucial measures in the Economic Partnership Programme include:
- limiting expenditure on goods and services, 
- re-structuring subsidies (additional funds for creating jobs by providing subsidies to private companies and individuals), 
- investment funds (greater investment into railway infrastructure, while decreasing investment transfers from the budget),
- maximising the performance of spending authorities,
- limiting the amount of earmarked funds in order to enable selective planning and realistic timelines of project implementation,
- public procurement (joint procurement for civil service sectors, combining work and computerising orders and purchase in the health care sector and local authority. 
 
With regard to revenues, Slovenia introduced higher VAT rate, and will suspend gradual decrease of corporate income tax at 17 per cent. Automatic harmonisation of tax deductions and net taxation basis with the growth of retail prices is to be eliminated, while property is to be taxed, and a tax on lottery tickets introduced.

 

In order to achieve greater fulfilment of tax commitments, the Slovenian Government adopted a comprehensive range of measures to limit grey economy and achieve greater tax compliance. Crucial areas include:  
- oversight of cash payment – stricter provisions on software for registering payments – certified cash registers,  
- limiting cash payments, 
- preventing illegal employment and underground work, 
- strengthening and more coordinated inspections, 
- construction system and preventing unauthorised construction, 
- measures in different sectors aimed at improving regulation and registers in the area of work and transactions in the health-care sector, forestry, winemaking, bakery industry, tourism, transport services, mining, aviation, art dealership and musical activity, 
- promoting commitment: improving the taxation culture and promoting voluntary payment of taxes via a comprehensive communication strategy, while raising the awareness of all citizens on grey economy and its effect.

 

Based on the recommendation of the Council of the EU, asset quality reviews and ‘bottom-up’ stress tests of the banking sector are taking place. Quality reviews include checking the completeness and integrity of data, review of individual loan operations, client and business ratings and detailed valuation of credit insurance. The goal of stress tests is to assess potential need for capital under a baseline scenario and in a situation of greater macro-economic imbalances from 2013 to 2015. Based on the final report, the Government plans to transfer underperforming assets of the three biggest banks to the Company for Managing Non-performing Assets of Banks in accordance with rules on government aid. At the same time, capital adequacy of banks will be established.

 

Slovenia has reviewed the regulatory framework for banks, and has adopted several amendments to the Banking Act and Financial Conglomerates Act, and a new Act Defining the Measures of the Republic of Slovenia to Strengthen Bank Stability. Slovenia will expand the competences of the Bank of Slovenia and introduce additional measures for increasing banks’ core capital.

 

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