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Saturday, February 4, 2023

Eva Irgl warned that the government’s economic measures turned out to be inadequate

By: Domen Mezeg (Nova24tv.si)

“Despite the very high total amount of planned aid to the economy, the representatives of the economy and employers clearly warn that the Proposal for the Law on Aid to the Economy to Mitigate the Effects of the Energy Crisis does not solve the basic problem of high offers for electricity leases for 2023, as the Regulation of the Government of the Republic of Slovenia on the price setting mechanism did not affect the offers, so the effect of the law will be extremely modest or insufficient,” SDS MP Eva Irgl pointed out the essence of the problem.

“Preserving the smooth operation of the economic sector at a time when we are facing an energy crisis, or the consequences of the energy crisis is of vital importance for the country. The Organisation for Economic Co-operation and Development (OECD) expects Slovenia’s gross domestic product growth to fall from this year’s five percent to 0.5 percent in 2023,” SDS member of parliament Eva Irgl wrote in her thoughts on Facebook. She went on to state that according to data from the Statistical Office of the Republic of Slovenia in November 2022, the annual price growth was 10% (4.6% in the same period last year), and the average annual price growth was 8.7%. Monthly inflation in November 2022 was 0.9% higher than in October 2022. As she also wrote, the annual price increase, measured by the harmonised consumer price index, was 10.8% (in the previous November 4 .9 percent).

“The monthly inflation was increased the most, by 0.4 percentage points, by more expensive oil derivatives: the prices of liquid fuels grew by 7.6%, and the prices of fuels and lubricants for passenger vehicles by 5.7%. Food prices rose by 0.9% and contributed 0.2 percentage points to monthly inflation. The higher prices of sports equipment (by 13.2%), solid fuels (by 6.5%), healthcare services (by 2.5%) and clothing and footwear (by 1 .9%) had a 0.1 percentage point of influence. 0.2 percentage points were contributed by all the remaining monthly price increases,” Irgl stated, adding that in recent months the Government of the Republic of Slovenia adopted the Act on Aid to the Economy due to High Increases in Electricity and Natural Gas Prices and the Amendment to the Act on Aid to the Economy Due to High Increases electricity and natural gas prices, which together provided around 86 million euros of aid to the economy.

However, according to her observation, the mentioned measures turned out to be too modest considering the conditions and needs of the economy. “The Government of the Republic of Slovenia then adopted and sent to the Parliament a bill on aid to the economy to mitigate the consequences of the energy crisis, which is said to have financial consequences for the state budget in the amount of 975 million euros. Despite the very high total amount of planned aid to the economy, representatives of the economy and employers clearly warn that the Proposal for the Law on Aid to the Economy to Mitigate the Consequences of the Energy Crisis does not solve the basic problem of high offers for electricity leases for 2023, as the Regulation of the Government of the Republic of Slovenia on the price-setting mechanism for the offer had no effect, so the effect of the law will also be extremely modest or insufficient,” she warned.

Subsidies do not solve the problem: companies will pay many times higher electricity prices than foreign competitors

In the following, she recalled that the Chamber of Commerce and Industry of Slovenia, the Chamber of Crafts and Small Business of Slovenia, the Slovenian Chamber of Commerce, the Employers’ Association of Slovenia, and the Association of Employers in Craft and Small Business of Slovenia announced, among other things, in their appeal to the Prime Minister of the Republic of Slovenia and the competent ministers: “Despite the subsidies, companies will pay many times higher price of electricity than their competitors in neighbouring countries. Thus, they will be forced to reduce energy consumption also by reducing production, which will lead to the dismissal of redundant workers, which no one in companies wants.” According to her, the aforementioned forecasts are cause for concern, and at the same time, the Government of the Republic of Slovenia is taking measures that have not proven to be adequate in practice, as inflation rose again in November 2022, and the OECD forecast for the growth of the gross domestic product for the following year has significantly worsened.

Also, according to her, the Government of the Republic of Slovenia does not listen to the views of employers’ representatives and representatives of the economy. Therefore, she addressed the following questions to the Government of the Republic of Slovenia: 1. What measures will the Government of the Republic of Slovenia take to reduce or prevent inflation from rising again in the Republic of Slovenia? 2. Why does the Government of the Republic of Slovenia adopt measures that have a major impact on public finances in a way that is not considered effective by representatives of employers and the economy? 3. How will the Government of the Republic of Slovenia provide Slovenian companies with electricity prices comparable to what their competitors in neighbouring countries have and will have? 4. What is the position of the Government of the Republic of Slovenia of the Organisation for Economic Co-operation and Development (OECD) regarding the forecast of a significant drop in gross domestic product in 2023? 5. What (if any) other measures is the Government of the Republic of Slovenia planning to preserve jobs and mitigate the consequences of the energy crisis for the economy?

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