By: Domen Mezeg / Nova24tv
“One only needs to look at the facts, the economic results of the work of this government during the greatest crisis. After that, I believe the choice is not difficult for anyone anymore. We have always been convinced that nothing is possible in Slovenia, and they told us about the things that are not possible… However, in two years, this government has proved that with this dynamic of economic growth, we can reach the level of the most developed EU members very quickly if we continue to adopt the right measures and, most of all, if we allocate public money for real projects, for example, for concrete construction of infrastructure, homes for the elderly, hospitals, and not for useless studies about how many genders there are in Slovenia and so on,” economist Lahovnik believes.
We asked several economists how they see the work of the current government of Janez Janša after its two years in office, how they would assess the condition of the economy, and what the forecasts are for the future. We were also interested in what kind of government Slovenia needs in the coming years to cope with the challenges posed by difficult crisis times. Economist Matej Lahovnik was one of the first to share his opinion: “Three credit agencies – Standard&Poor’s, Fitch and DBRS, have repeatedly confirmed Slovenia’s credit ratings during the corona crisis. Moody even raised it in October 2020. In this term of office, Slovenia has borrowed at a negative interest rate twice, which means that creditors have paid us to keep their money,” Lahovnik said.
Last year, GDP was 8.1 percent in real terms and more than 11 percent in nominal terms. Unemployment is at a record low, and companies in Slovenia are facing the problem of finding employees. Indeed, this government has succeeded in proving that even in times of greatest crises, excellent economic results can be achieved. “If we want this trend to continue, it is necessary to also continue with the measures already adopted by this government. It is important to reduce the tax burden on salaries, and the government has already adopted the first Personal Income Tax Act, which allows this.” Structural reforms also need to be pursued, as the OECD reminds us. And with such dynamics, we will reach the EU average in the next government term. In the last quarter of last year alone, we had twice as much growth as other countries in the EU, with which we like to compare ourselves. We are talking about Austria, Germany and Italy. With such a pace and dynamics, we will achieve the average development of the EU in the next term, as we are currently at 90 percent already.
However, if a different government comes to power, which will decide to experiment and commission studies and analyses instead of concrete projects, we will be the same state again as we were before the term of the current government when we had a lot of institutes that did expensive studies but did not build homes for the elderly, hospitals, or anything else. One only needs to look at the facts, the economic results of the work of this government during the greatest crisis. “After that, I believe the choice is not difficult for anyone anymore. We have always been convinced that nothing is possible in Slovenia, and they told us about the things that are not possible… However, in two years, this government has proved that with this dynamic of economic growth, we can reach the level of the most developed EU members very quickly if we continue to adopt the right measures and, most of all, if we allocate public money for real projects, for example, for concrete construction of infrastructure, homes for the elderly, hospitals, and not for useless studies about how many genders there are in Slovenia and so on,” economist Lahovnik believes.
This government listened to the business sector, and the latter is the foundation for the development of the country
Entrepreneur and director of the company Rihter, Janez Rihter, also shared his opinion on the matter: “I hope we get the same, or at least a very similar government as the current one. In principle, I am extremely pleased with the work of this government. I think all the things that have been done so far were a step in the right direction. The government has started listening to the business sector, and this is the basis for any development of the country.” If the business sector is not strong, then all of the other entities in the country cannot operate because there is no money. However, the government is doing an excellent job in this area, as it has proportions included in its long-term programmes and is also implementing these matters. Former Minister of Finance, Janez Šuštaršič, said the following about the current government’s work: “This government has generally been successful, and it would be perfectly fine if that continued. However, there are always certain things to talk about, specifically, if they were okay or not.” In the future, it will certainly be necessary to pay a lot of attention to the field of energy.
Some new rethinking of the strategy is needed in terms of what is happening with prices, supplies, the war in Ukraine, and so on. It is crucial to consider matters of resources and vision. However, it will also be necessary to start reducing the budget deficit. The director of the Borzen electricity company, Martin Bratanič, said the following: “In its very short term, this government has stabilised the economy’s confidence in the government.” It is easy to feel the businessmen’s new, strong impetus. This is seen not only in renewable energy sources, where both companies and private individuals are looking for channels to become and then exist self-sufficiently, but also in the willingness to invest in renewable energy sources, regardless of the amount of the subsidies. This awareness of the existence and importance of renewable energy sources and the green transition is constantly increasing, and the company Borzen also wants to make a significant contribution to this in the future, especially in the framework of its competencies, powers and tasks, as the only neutral company in the country which is 100 percent state-owned.
Nuclear energy is the key transitional solution, and more long-term, the solution is hydrogen technology
The company Borzen provides public utilities as a market operator and support centre for the establishment of the so-called financial fund for energy, where certain funds would be invested in quality projects, for renewable energy sources, especially in companies and with that are at least 10 percent or predominantly state-owned. This would undoubtedly accelerate investments in renewable energy sources, increase absorption capacity, and thus we would be able to obtain new funding for new green projects. However, at this moment, at this stage of development, nuclear energy is certainly the one that ensures the uninterrupted production of electricity in the belt, regardless of whether the sun is shining, the wind is blowing, and regardless of the water level. “But I think a lot of effort has already been put into hydrogen technology.” This could be an excellent bridge of cooperation between different stakeholders (producers, traders, non-governmental organisations, developers and all people), and above all, it is one of the safest, cleanest, and most sustainable forms of energy.
Economist Sašo Polanec also shared his opinion on this topic: “I see the period of the last two years as relatively successful, especially compared to the great economic crisis of 2008/2009. The anti-corona legislative packages were, to a large extent, an appropriate response to the specific challenges posed by the closure of the economy. I would specifically like to highlight the measures that have secured jobs and entrepreneurial activity – from subsidising being on temporary leave to reduced working hours, to subsidising individual entrepreneurs’ contributions and tourist vouchers.” During the previous crisis, we saw a sharp decline in economic activity, followed by a decline in employment. This time, the link between economic activity and employment – with the help of adopted measures – was broken. However, in the last two years, due to objective circumstances, the part of healthcare that was not related to covid-19 has been largely neglected.
Let’s increase the number of enrolment places at the Faculty of Medicine!
“I believe that it is now necessary to increase the scope of healthcare services, which is primarily possible mainly by increasing the budget allocated to health.” The budget we spend on healthcare needs to be increased to about 10 percent of GDP, which is as much as the more developed countries in the EU spend on it. One of the central measures in the field of healthcare is to increase the number of enrolment places at the Faculty of Medicine and, at the same time, to increase the attractiveness of general healthcare – both from a financial standpoint and from the point of view of the quality of studying. The prices for healthcare services are not cost-effective – therefore, the price model should also be changed.
Supplementary health insurance companies should be involved in setting the prices of healthcare services, at least to that they can give the opinions, to which the Health Insurance Institute of Slovenia would then have to respond. “During the covid crisis, research and development were also being partially neglected, but they are the key drivers of economic policies and, with appropriate incentives, also key for achieving sustainability – for example, environmental objectives.” Expenditure in this area should also be increased from 2.3 percent to more than 3 percent. Many countries have already exceeded the share of 3 percent, but Slovenia, despite the commitments made in the past, does not achieve this goal. One of the key measures to make a significant contribution to increasing research output is the funding of doctoral programmes, which already generate a number of basic and applied research, but to a lesser extent than could be done with larger funds.
The government has helped the economy and the population with its well-thought-out, concrete and decisive measures
Aleksander Zupančič, President of the Management Board of the energy company Elektro Ljubljana, was the last to provide a comment on this topic for our media outlet: “In the last two years, the Government of the Republic of Slovenia has effectively helped the economy and the population overcome the difficult period of the coronavirus crisis. Unfortunately, the war in Ukraine pushed us from one crisis into another, so in the future, we can only wish for people who would listen to us and for such concrete actions of the Government of the Republic of Slovenia.”