Slovenia: Last year’s state budget reaches high deficit

According to preliminary data, the Slovenian state budget recorded about 9.08 billion euros in revenues last year, or 10.4% less than in 2019, while expenditures increased by 26.8% to approximately 12.57 billion. The budget deficit was recorded at just under 3.49 billion euros last year, which is mainly due to declining economic activity as a result of the COVID-19 epidemic and the adoption of measures to mitigate its consequences.

The consolidated public funding balance, which consists of all four public funds, recorded about € 18.53 billion in revenues and about € 22.07 billion in expenditures last year.

EU funds planned for this year could partially improve the financial situation. The government on Thursday ratified the EU “own resource decision”, the legal basis to allow the withdrawal of post-COVID recovery funds. In 2021-2027, Slovenia should be able to attract € 5.2 billion.

The EU 1. 1.8 trillion recovery fund consists of the € 2021-2027 budget worth € 1,074 trillion and the EU Next Generation recovery plan worth € 750 billion.

The main instrument of the next generation of the EU, which includes grants and loans, is a € 673 billion regeneration and sustainability scheme.

To attract these funds, EU members must ratify the decision on their resources, as the European Commission will borrow in financial markets on behalf of member countries to fund grants.

While grants will not have to be returned by individual member states, they will have to be repaid at EU level.

The aim is to repay the borrowed funds with a presentation of “own resources”, ie new European taxes to fill the common budget.

Senior EU officials have urged member states to immediately ratify the legal basis for funding and prepare national plans for the recovery funds phase.

Member States are expected to receive the first transfers before the end of June.

Slovenia’s national recovery and sustainability project to attract 5.2 billion euros – 1.6 billion euros in grants and up to 3.6 billion euros in loans – is being finalized.

The government is expected to approve it once the legal basis is adopted at EU level, which is due in February.

Until then, the document remains labeled “internal”, which raises concerns among opposition parties, who have urged the government to make it public.

The EU Parliamentary Affairs Committee will debate the document privately.

However, it is already known that loans coming from the recovery instrument will be treated as public debt, first at EU level and then at national level.

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