Fiscal Instability in Slovenia during the Economic Crisis

Stanka Setnikar Cankar Veronika Petkovšek
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Stanka Setnikar Cankar Veronika Petkovšek: Faculty of Administration, University of Ljubljana, Ljubljana, Slovenia Faculty of Administration, University of Ljubljana, Ljubljana, Slovenia

Zagreb International Review of Economics and Business, 2014, vol. 17, issue 1, 95-105

Abstract: The changed macroeconomic conditions brought about by the global financial and economic crisis are posing an increasing challenge to economic policymakers to achieve the objectives of the planned consolidation. The fiscal situation in Slovenia, as in other EU Member States, remains tight; the current priority is therefore to ensure the sustainability of public finances and to create conditions for stable economic growth. Slovenia faces the challenge of reducing the public fi nance defi cit below 3% of GDP in 2013. If it does so, it will fulfil its commitment to bring its excessive deficit under control and re-establish opportunities for financing on international markets. Long-term sustainability of public finances and stable economic growth will be ensured by economic policy measures, structural measures and institutional adjustments. If the economy is to function successfully, appropriate management frameworks are required in which the government plays a key role. Long-term economic success can be achieved with high-quality government institutions. The objective of this paper is to show the current state of public finances and to outline the features of the austerity measures being conducted in Slovenia. The need to balance public finances in order to ensure a stable and sustainable macroeconomic environment and meet the requirements of the EU, has led to amendments to legislation in Slovenia that are radically affecting the size and structure of public expenditure. On the other hand, Slovenia is also adopting measures to promote economic activity. JEL Classification: E62, E65, E66

Keywords: Economic crisis; Fiscal instability; Austerity measures; Public finance defi cit; Economic growth (search for similar items in EconPapers)
Date: 2014
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