By: Vida Kocjan
Macroeconomic indicators confirm that Slovenia is on the verge of entering a recession, as recently stated by Prof. Dr Vito Bobek in an interview for Demokracija. The ruling coalition continues to dismantle everything positive that was implemented by the government of Janez Janša.
One of the recent cases is the proposal for day-care fees for the second child. At the same time, they continue to spend taxpayers’ money lavishly on NGOs that are favourable to them, which were elevated to the “leadership throne” last April. Money is also flowing in torrents for illegal migrants. Meanwhile, the government has sent budget documents for the next two years to the National Assembly, which were torn apart by the Fiscal Council. Ministers in Golob’s government are also lying. Let’s go through them step by step.
The Fiscal Council tore apart the budget documents
The Fiscal Council has published an assessment of the budget documents for the years 2024 and 2025 approved by the government. According to the plans, the National Assembly is expected to approve both budgets at its regular November session, which begins on November 20th, and parliamentary procedures are already underway. In 2024, the government plans to have expenditures that are 2.2 billion euros higher than revenues, and in 2025, an additional 1.3 billion euros. In terms of percentages of Gross Domestic Product (GDP), this accounts for 3.3% in 2024 and 1.8% of GDP in 2025.
The Fiscal Council notes that the budget documents submitted indicate a deterioration of the public finance outlook and the continuation of pro-cyclical fiscal policy in this and the next year, considering a more realistic assessment of public finance developments in this year compared to what is presented in the documents. Such findings are independent of the substantial funds allocated for post-disaster recovery after the August natural disaster. In the face of necessary emergency measures, additional fiscal impulses in a situation of relatively high nominal economic growth and supply-side constraints are not suitable, as they can contribute to prolonged high inflation, among other things. The challenges of addressing the consequences of a natural disaster further underscore the necessity of counter-cyclical fiscal policy, which should create the necessary manoeuvring space even for responding to exceptional events during favourable economic cycles. However, once again, the budget documents fail to address significant and growing long-term challenges, which pose increasing risks to public finance sustainability.
In contrast to the budget plans submitted, the starting point for budget planning in high uncertainty should be a credible scenario of unchanged policies, which is a fundamental requirement for identifying manoeuvring space for emergency and other discretionary measures. Even in this instance, the budget documents submitted for assessment by the Fiscal Council, given the understandable uncertainty regarding flood-related costs, are not comprehensive and credible enough. They deviate from best practices in medium-term budget planning and do not enable a comprehensive assessment of compliance with fiscal rules established by legislation, as stated by the Fiscal Council.
Social dialogue under the Golob government hits a new low
The attempt to re-establish social dialogue has also failed. In the Chamber of Craft and Small Business (OZS), they attempted to revive it as part of discussions with the Minister of Labour, Luka Mesec, on the topic of the amendment to the Employment Relationships Act. However, they were disappointed to find that it was not sufficient for the trade unions that employers consented to a compromise draft text of the amendment, which, in addition to two EU directives, would include 13 articles of the law.
In discussions, the trade unions demanded approval for all six articles from the coalition agreement, something that employers could not agree to. OZS stated that they showed a lot of goodwill in trying to re-establish social dialogue. However, discussions on the Employment Relationships Act demonstrated that the attempt to revive social dialogue was essentially a one-way communication, as they only talked about proposals from the unions and the Levica party, but not about proposals from the employers. Blaž Cvar, the President of OZS, also communicated that they would continue to seek solutions for the greater good of society, desiring favourable conditions for businesses and satisfied employees. They emphasised that in times when companies are facing a decline in orders and a cooling economy, laws should be enacted to relieve, not impose additional burdens on the economy. They added, “Only with a successful economy can we provide jobs and prosperity for all.”
False data on flood damage assessment
According to the latest information from the government coalition, the damage caused by the August floods and landslides is estimated to be as high as 9.9 billion euros. The government has not yet published a list of damaged structures. Last week, Aleksander Jevšek, the Minister for Cohesion and Regional Development, explained that the government adopted this estimate for the purpose of preparing an application for obtaining funds from the EU’s Solidarity Fund for assistance following the August disaster. The damage estimate was sent to Brussels on Friday, October 20th. The damage estimate was incredibly inflated while revealing that Slovenia can receive a maximum of 400 million euros in aid from the EU. The rest will need to be covered by the state from other sources. To this end, the government is already planning to raise taxes and introduce new ones, which is harmful to both the population and the economy. This does not seem to be a concern for Alenka Bratušek, a failed politician and the current “Golob’s” Minister of Infrastructure. Nor does she seem to find deceiving the European Commission or the European Union problematic. All of this was confirmed during last week’s session of the Parliamentary Commission for Public Finance. It should be added that such manipulation of data and deceit is illegal and punishable by law.
Border control and illegal migrants
Last week, the government also adopted a decree to establish police control at the state border with Croatia and Hungary. Allegedly, border crossings are to be monitored due to increased terrorist threats. However, the fact is that in the first nine months of this year, approximately 45,000 migrants entered Slovenia entirely uncontrolled, with 300 or more arriving daily. Former Minister of the Interior, Dr Vinko Gorenak, commented on the government’s decree, stating that border control will only cause additional problems for travellers and daily commuters near the border. Illegal migrants will continue to use old methods to cross the green border. “The argument that they are introducing border control due to an increased level of risk in Slovenia does not convince me. It is indeed a convenient excuse given the situation in which Slovenia found itself with closed borders with Austria and Italy. It cannot be denied that Slovenia’s level of risk increased due to the Hamas attack on Israel and the retaliatory measures. However, it is clear that border control at border crossings will not reduce the risk to Slovenia in any way. Golob’s government should have increased control along the green border with Croatia long ago, especially after Croatia’s entry into the Schengen area when it became clear that Croatia poorly guards the external Schengen border,” said Dr Gorenak. Former Police Director-General Dr Anton Olaj added that this border control at border crossings essentially disrupts and complicates normal daily legal migrations. “Crisis management should be carried out in accordance with the provisions of Article 10b of the Aliens Act, and I call on the Ministry of Internal Affairs and the government to do so,” he added. Let’s recall that Article 10b of the Aliens Act stipulates that the police must not allow entry to a foreigner who does not meet the conditions for entry. Those who have already entered unlawfully and are on Slovenian territory unlawfully are to be taken to the state border and sent back to the country from which they entered unlawfully.
Therefore, the government’s decision to control border crossings is another evasive choice under the leadership of Robert Golob.
Preschool fees, frozen transfers
In line with its “principles” to dismantle everything that the Janša government had introduced, the government coalition is now proposing that preschool fees for the second child be introduced for parents. Currently, free preschool for the second child, when enrolled simultaneously with a sibling, has been in effect since September 1st, 2021. Parents are exempt from preschool fees for the third child and any subsequent children from the same family, regardless of how many of them are enrolled in preschool.
In addition, the government unanimously passed a resolution at a session to freeze social transfers (scholarships, child benefits, unemployment benefits, aid, and the like) in the coming year. This is intended to save 300 million euros in 2024, taking it from the pockets of socially vulnerable citizens. Luka Mesec initially attempted to deny that this resolution had been passed but was then publicly confronted by Robert Golob, who stated that Mesec had indeed voted in favour of the resolution to not adjust social transfers for inflation. Mesec subsequently backed down, including cancelling one of his press conferences last week.
Who can still believe them?
Residents in areas flooded in August are still waiting for the promised state aid. Robert Golob promised them assistance by the end of November, which will be four months after the floods. Initially, he promised it in just one month or a few weeks.
(Article was originally published in the printed edition of Demokracija.)