Golden Fiscal Rule will not go into the Constitution
At the first meeting, after the summer holidays, of the heads of the parliamentary parties and deputy group leaders, there was no progress regarding efforts to include the “golden fiscal rule” into the Constitution which should presumably be done following Slovenia’s ratification of the European Fiscal Compact. Without the support of the opposition, PM Janez Janša said he is still allowing for the possibility of linking the issue to a confidence vote.
Opposition Firmly Against the Rule
Coming out of the meeting which examined the work of three cross-party working groups trying to find consensus on some of the country’s key challenges, Janša disagreed with the view of Positive Slovenia (PS) and the Social Democrats that a special Act on the fiscal rule would be sufficient to meet Slovenia’s obligation to the EU. Arguing that Slovenia promised to implement the golden rule of a zero deficit at the constitutional or comparable level, Janša said that a standard Act would be “seen by our partners as a bad joke” and will not be put forward by the government. He is convinced that constitutional change will eventually come, since “we will be forced into it by circumstance”, but the cost of the delay will be high. Janša still allows for the possibility of linking the fiscal rule issue or other urgent measures to a confidence vote in parliament. He said that progress was at least made on the other two main topics which were examined by the cross-party working groups - sorting out the banking system and establishing a sovereign holding as the custodian of state assets - and that it would be clear within two weeks whether the legislation could be coordinated.
Change in Government Priorities
Janša added that the falling credit rating has led the government to change its priorities and push ahead faster with pension and labour market reform. With time running out, the government will be “forced to put forward coordinated or possibly uncoordinated legislative proposals at the start of the autumn”. Meanwhile, PS Deputy Group Head, Jani Möderndorfer, expressed doubt regarding the need for the August meeting, which lasted only about an hour, saying that no common ground had been found during the negotiations. “They did not convince us that the fiscal rule is important,” he said, adding that the positions on this matter remained unchanged. Regarding the banking system and the sovereign holding, Möderndorfer said that talks amongst parties would continue. SD President, Igor Lukšič, explained that he had proposed first the passing of the law on the fiscal rule and then moving to the two-third majority needed for constitutional changes only if the Act proved insufficient.
“Our condition is that we obtain the view of constitutional experts and relevant authorities within the European Commission,” Lukšič added.
EU Bailout Package a Realistic Option?
Finance Minister, Janez Šuštaršič, described the outcome of the meeting as bad news saying that it will be hard to explain to the international public. He noted that more important than the views of political parties at home is the opinion of those who define Slovenia’s options on the sovereign debt market. Šušteršič said that Slovenia is only a step away from being marked as a country not to lend money too but was quick to add that this would not necessarily entail a bailout as spending can be cut to the level of revenue.While stressing that progress had been achieved in the coordination of the other two topics on the agenda, he repeated the need to provide positive signals to the market, also mentioning the sale of assets in state ownership.
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