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Monday, August 15, 2022

SDS: “In areas where people and their problems are at stake, the government is clearly in no hurry”

By Lea Kalc Furlanič

 A month and a half has passed since the elections, but the government has only now begun to prepare the first proposals for measures to alleviate the energy and food costliness that are so persistently knocking on our door. In fact, they have just formed a working group. However, the government is quick to increase ministries and staff changes.

However, the media are so much quicker with questions, and as they say in the government’s communications office and at the Ministry of the Economy, both are already receiving several journalistic questions on the subject. They responded only with information about the first meeting of the working group last week, but its conclusions do not promise much for now: they have started preparing the first proposals for measures, and a document with solutions should be prepared (only) by the end of this month.

The government is in a hurry with revanchism, not with helping the people

Asked whether they believe that Golob’s government is too slow to act in the face of a severe food and energy crisis and whether a special working group is really needed to prepare a plan of measures, the Slovenian Democratic Party (SDS), leaders in the previous government, said: “The coalition agreement is very clear in the parts where it takes from people – higher taxes. Robert Golob was very quick when it came to an unnecessary increase in the number of ministries. This government is very fast in personnel changes, even where there are no political functions involved. In areas where people and their problems are at stake, however, they are clearly in no hurry. The measures announced in the outlines by individual ministers to alleviate energy and general costliness will, with the support of the service and government-friendly media, be cheaper PR and will not help people significantly.”

After the first meeting of the group, the Government Communication Office (Ukom) sent the following press release: “The working group of the Prime Minister for the mitigation of energy and food prices has started preparing the first proposals for measures. It is headed by the Prime Minister and includes the Ministers of Economy, Infrastructure, Agriculture, Labour, and Finance. At the proposal of the Prime Minister, a strategic council will be formed under the Prime Minister for Food and Energy Prosperity, which will include representatives of interest groups and experts in the fields covered by the Strategic Council.”

Where is this “short time”?

The group has not yet said a word about any draft proposals for measures to alleviate food and energy costs. Prime Minister Golob emphasised that “we must take measures that will be targeted in a short time”, so the first measures on the nutrition side will be focused on alleviating the price faced by farmers, and on the energy side in the field of motor fuels. Just words again.

The day before, Ukom wrote down what would happen at the first meeting and announced: “As the Prime Minister has already announced, the final document with measures to overcome food and energy costs will be ready by the end of June. In it, the members of the working group will present concrete solutions on how to distribute the burden of costliness.”

The day before the first meeting, the Ministry of the Economy, which is supposed to be in charge of preparing a framework set of measures at high food and energy prices, also informed the public about its activities due to media pressure: “Controlling costliness is a high government priority, which is being addressed in close coordination with the Prime Minister and the relevant ministries. The government’s strategy is to reach an agreement on the management of the precious goods together with all key stakeholders in the food, energy, and raw materials sectors. The aim is to reach an agreement on the distribution of burdens vertically along the entire chain of stakeholders (manufacturers, distributors, trade). To this end, the Ministry is preparing the first meeting with stakeholders in agreement with the Prime Minister. The ministry is also examining all possibilities to act in accordance with its powers to prepare solutions to protect consumers, maintain the competitiveness of the economy and improve the supply of key goods.” Golob announced with some ministers that the government would respond to high energy and food prices in two steps: first together with stakeholders, if this is not successful, they announced price regulation as the second step.

Farmers are sharp: either arrangement or tractors

But as it turns out, it is not going to be easy. Namely, the farmers have already responded, and quite sharply. They are afraid of lowering purchase prices and warn that they have no reserves and that they have not covered all costs with purchase prices for a long time. President of the Chamber of Agricultural and Food Companies Janez Rebec said that their sales are worse when food prices rise, and that the first indicator for forecasting prices will be wheat harvest. The president of the Slovenian Farmers’ Union, Anton Medved, hopes that the government will listen to them, otherwise they will act differently. “Definitely the conversation at the table starts first. If we are not successful, we will have to come to Ljubljana with tractors,” he warned.

The Confederation of Trade Unions of Slovenia PERGAM also came forward, where they have already made some proposals for measures. They call on the government to include in the set of measures the immediate calculation of the minimum cost of living and the extraordinary harmonisation of the minimum wage; promoting collective bargaining at all levels and agreeing on higher wages, including those above the minimum wage, in order to maintain disparities in job complexity, and agreeing on higher reimbursement of work-related costs; adoption of measures to promote greater self-sufficiency of Slovenia in the field of food and energy, which would reduce dependence on imports and reduce pressure on the prices of these goods; examining the possibility of selectively reducing VAT and excise duties on certain products or groups of products and, as a last resort, regulating prices, in particular if it is found that price increases for certain products are not justified or that it is a cartel.

Economist Matej Kovač assesses the situation: “If Golob’s government really knew what it could do to mitigate the impact of rising prices on the well-being of the population, it would act, not convene working groups. Immediately after the price shock, the SDS, NSi, and Konkretno governments froze fuel prices and exempted households from paying electricity taxes.” On short-term price regulation in activities where providers are capital-strong, he says that it may have more positive than negative effects on prosperity: “In the long run, even large companies cannot withstand such business conditions. Traders, farmers, and manufacturing companies always react immediately to loss-making regulation by streamlining supply, which affects uninterrupted supply and the standard of living of the population in the long run. We can only hope that it will remain only with the pompous words of economic illiterates and the meeting of working groups.”

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