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Slovenia Business Week no. 01/2005: Meeting Euro Criteria the Biggest Challenge in 2005, Says PM

Meeting the criteria for the introduction of the euro will be one of the biggest challenges for the new government in 2005, Prime Minister Janez Jansa told the press on Wednesday. The fact is that we need to curb inflation and make sure that the general government deficit stays within the boundaries of the Maastricht criteria, he stressed

To achieve these objectives, Slovenia will likely pursue a restrictive spending policy in 2005 and most of 2006. In addition, the government will embark on a reform of the tax legislation immediately after New Year's, according to Jansa.

The new government had considered postponing the comprehensive tax reform due to enter into force on 1 January, but later changed its mind, saying it would be impossible to assess all the consequences of such a move in the short period before the end of the year.

"Whatever the government might have done in the limited time after 3 December in reforming the reform, it would only expose taxpayers to even greater risk than is already present now," Jansa explained.

There is only one solution: to make an assessment after the tax legislation has been enacted, conduct a comprehensive analysis and draft appropriate legislative changes. Jansa believes that possible shortcomings which can be eliminated during the year should be tackled immediately.

Jansa also announced that a supplementary budget for 2005 would have to be passed: the budget was adopted almost two years ago, when certain circumstances were not known yet, and others were assessed too poorly.

For example, the 2005 budget does not take into account the loss of revenue following the enactment of the new tax legislation. It also assumes that a reform of social transfers was enacted in 2004, which did not happen.

According to Jansa, the budget will have to go through the most far-reaching restructuring ever, in order to facilitate the drawing of EU funds. "If we are to draw these funds efficiently, we have to undertake a big and not at all simple restructuring of budget funds on a scale not seen since 1991," he said.

The prime minister also brushed aside the opposition's fears that the coordination of Slovenia's EU commitments is jeopardised now that the Government Office for European Affairs (SVEZ) is no longer headed by a minister but by a state secretary from the PM's office.

The assignments of the SVEZ have not changed in any way, he said. There will be certain changes aimed at streamlining the work, but the office will continue to perform the coordinating task.

Another major EU-related project in 2005 will be the launch of preparations for Slovenia's presidency of the EU alongside Portugal and Germany from the beginning of 2007 to mid-2008. Jansa said that a team in charge of the preparations would be appointed in January.

Source: Slovene Press Agency STA

Author: Branka Murn