Press Release

The Government approves the amended Stability Programme and the draft Minimum Wage Act

At today's regular session the Government approved the Stability Programme - Update 2009 and authorised the Ministry of Finance to refer it to the European Comission and the Council of the EU. In addition, the National Assembly is to be briefed on the programme.

The Stability Programme for 2009 differs significantly from previous documents, as on 2 December 2009 the EU started legal action against Slovenia due to its excessive deficit. According to the recommendations of the Council of the EU, the country must reduce the general government deficit from the figure reached in 2009 to less than 3% of GDP by 2013.

The key challenge facing the Government in the next four years is to implement a fiscal policy which will ensure the consolidation of public finances. The document defines economic policy measures until 2013 by considering the latest macroeconomic forecasts by IMAD, which point to gradual recovery and modest economic growth in export partners, which should increase in 2011. Along with the global recovery, Slovenia's economic growth should rise to 2.5% of GDP in 2011, until finally reaching 3.7% of GDP in 2012 and 3.5% of GDP in 2013.

The Stability Programme contains measures aimed at fiscal consolidation, which will ensure consistency during the time of alleviating the effects of the economic crisis, ensuring the functioning of the social state and the gradual consolidation of public finances. The strategy of consolidation of public finances aims to gradually remove fiscal incentives by the end of 2010 and to introduce measures aimed at reducing and rationalising expenditure in 2011 in an accelerated fashion. Such a strategy will lead to a lower general government deficit under the reference limit of 3% of GDP in 2013 to 1.6% of GDP. By 2013, government debt will have increased to 42.1% of GDP.

At today's session, the Government finalised the text of the draft Minimum Wage Act, which it will submit for passage to the National Assembly.

The act provides a more efficient legal framework for the statutory minimum wage, following the principle that all who receive the minimum wage must be ensured a decent living.

The act stipulates a gross minimum wage of €734.15 (or 562 net pay) for work performed from the first day of the month after the act becomes effective. The net amount equals the cost of the minimum consumer basket, as calculated by the Institute for Economic Research of the Faculty of Economics.

The Government approved a Decree Laying Down the Work Permit Quota for 2010 to limit the number of aliens in labour market, which it will submit for publishing in the Official Gazette of the Republic of Slovenia. A draft Decree was approved beforehand by the Economic and Social Council without reservations.

Compared with 2009 figures, the work permit quota for 2010 has been halved to 12,000 permits. As of the end of 2009, 10.152 (42.3%) work permits were issued.

Given the slower growth of trade in goods, particularly exports, and the decrease in manufacturing output and construction, 2010 is expected to see an even bigger shortfall in economic activity in sectors which employed predominantly foreign labour. Considering these trends, coupled with an expected rise in unemployment, it is safe to assume that 2010 will not see an increase in demand for foreign labour, but rather vice versa. The quota of 12,000 work permits for 2010 is thus a realistic estimate.