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First two years of Borut Pahor's Government

Foto: Stanko Gruden/STA, vir: UKOM

After two years of Government under Borut Pahor, one can safely say that the global economic and financial crisis, which emerged as the Government took office has significantly marked its term.

 

When in the first year, a fast and effective response to the crisis situation was crucial (it called for completely different priorities than had been planned, as anti-crisis measures targeting the financial sector, the economy and social situation of the population were taken), the beginning of the implementation of these vast structural reforms had the most significant impact on the current Government’s second year in office.

 

Confronting the crisis revealed all the long-term structural and developmental weaknesses of the country and showed that it needs major systemic adjustments. All main Government's activities in the past year were focused on gradually fullfilling the three key long-term goals, set in the Slovenian Exit Strategy 2010–2013.

 

Therefore, at the end of 2010, Slovenia is in a much better position compared to the majority of European countries and EU member states.

 

During the debate in parliament on the first of the key structural reforms, Slovenia is at important crossroads: if as a country and society we wish to make a development breakthrough in the longer term, the realisation of pension, health-care, agricultural and some other reforms is essential.

 

The Government is fully aware of this situation, so it will insist that they are implemented.  

In the first two years of its term, the Government of the Republic of Slovenia has:


maintained social cohesion

Despite the worst international economic crisis since World War II, the Government has managed with timely anti-crisis measures to prevent grave economic, political or social shocks. Moreover, despite the crisis, we have managed to maintain social cohesion.

 

maintained economic growth at one per cent of GDP

Despite a significantly lower GDP due to the onset of the economic and financial crisis, economic growth will be about or over one per cent of GDP in 2010, which shows that Slovenia is on the road to economic recovery.

 

maintained the status of a country in the first circle of European development

Despite the economic crisis, Slovenia has managed to maintain the status of a country in the first circle of European development and will become one of the most successful EU member states along with Germany and France.

 

maintained public debt well below the 60 per cent of GDP required by the Maastricht criteria

Despite taking on loans to calmly overcome the economic crisis, Slovenia’s loan parameters are much better than in the large majority of comparable countries: public debt stands at 42 per cent of GDP and is well below the 60% required by the Maastricht criteria, while the budget deficit currently totals about 5 per cent of GDP and will fall to the required 3 per cent in 2013 over the 2011 (4.5) and 2012 (3.6) budgets. The introduction of the so-called fiscal rule limited government expenditure in relation to economic growth.

increased funds for social security, research and development

In the year of the greatest economic crisis, Slovenia allocated as much as 44 per cent more funds for social programmes than before the crisis, thereby maintaining social sustainability. At the same time, it ensured a far greater amount of funds for research and development: the share increased from 0.51 to 0.78 per cent of GDP, which is the greatest R&R public investment increase in the last 20 years.

maintained the unemployment rate close to 7 per cent

Despite the coallpse of several large companies with over one thousand employees, the Government has maintained the ILO unemployment rate at just above 7 per cent at 100,000 thousand, despite forecasts estimating the number of unemployed between 130 and 150 thousand.

increased funds aimed at promoting entrepreneurship and competitiveness

In the first half of its term, the Government supported over 3,500 company project through calls for proposals: over 275 million euros were allocated in 2009, while 290 million euros were distributed in 2010, which exceeds the fund for promoting entrepreneurship and competitiveness in 2008 by over 50 per cent.

prepared an exit strategy and defined key structural adjustments

In the first two years of its term, the Government responded to the crisis with structural adjustments included in the exit strategy. The adjustments foresee 26 new or amended acts. Thirteen have already been passed, seven are being debated in parliament (including the most difficult – pension, railways, transport and labour legislation), while six are awaiting government approval. In addition, two extensive packages of new legislation are being prepared on health care and agriculture.

 

prepared new pension reform for a safer old age for all generations

The Government has prepared and referred to the National Assembly new pension legislation. It is one of the most long-term measures, which will ensure the country greater sustainability of public finance and a safer old age for all generations.

 

 

 

limited public sector salaries

Despite the difficult financial situation, the Government has managed in two years to meet half of the commitments regarding the indexation of salaries in the public sector, and then after long months of coordination, reached a consensus with public sector unions to adjust the indexation dynamic to the new situation. Thus the burden of the crisis will be more evenly distributed among all employees. The Government has also begun the preparation and implementation of the reform aimed at the greater modernisation of public sector activities.

provided a 100% guarantee for bank deposits of natural persons

With the timely adoption of anti-crisis measures and guarantees, the Government prevented the crisis in the Slovenian banking system and the collapse of a domestic bank, thereby protecting the deposits of Slovenia’s inhabitants which, unlike in numerous other countries, remain safe despite the crisis.

 

 

 

introduced a new method of recruitment

The Government has introduced new recruitment practices with regard to the appointment of management personnel in companies owned by the state, agencies and public institutes with staffing and accreditation councils, which was the first step away from the political recruitment used in the past.

 

acquired the seat of the Agency for the Cooperation of Energy Regulators (ACER) and joined the South Stream

Slovenia has acquired the seat of the Agency for the Cooperation of Energy Regulators. By signing an agreement with the Russian Federation, we joined the construction of the South Stream gas pipeline, which will ensure long-term energy security.

 

In addition, the Government began making profound changes to Slovenia’s energy map: it has reviewed the too costly and disputed investment in TEŠ6 - Unit 6 of the Sostanj Thermal Power Plant, begun discussions on merging energy pillars, and placed them in a new national energy programme which will also clearly define which direction should Slovenia take, particularly with regard to renewables.

 

resolved the issue of the so-called erased

After 18 years of many complications over issuing decisions regarding the so-called erased, the Government has resolved the problem, which had attracted severe international criticism for many years.

opened a new chapter in relations between Slovenia and Croatia

By signing the arbitration agreement, which was confirmed by referendum, and by reaching an agreement on how to resolve the issue of deposits in Ljubljanska banka, the government made a significant breakthrough in relations between Slovenia and Croatia. Both problems are awaiting international arbitration and binding solutions, which the countries failed to reach in the nineteen years since they declared independence.

concluded the OECD admission process

During the term of this Government, Slovenia successfully completed the OECD admission process, which will enable the modernisation of the country’s corporate management system.

strengthened our role in the Western Balkans

In the last two years, Slovenia returned to the global diplomat arena with a more active role in the Western Balkans, where it is considered a partner in an increasing number of dispute resolutions.

strengthened economic diplomacy

A significant achievement of this Government was the transition of foreign policy and diplomatic priorities from traditional to economic diplomacy, which means aiding Slovenian businesses in entering foreign markets, particularly the Western Balkans, North Africa and Asia, China, Russia, Brazil and India.

strengthened our role in international missions

The Slovenian Government has drafted the Cooperation strategy of the Republic of Slovenia in international operations and missions, which sets guidelines for participation and ensures that Slovenia will continue to be a successful and esteemed partner in global efforts for peace and stability, such as in operations in Afghanistan.