Slovenia’s Budget Revision: Navigating the Aftermath of Severe Flood Damage
Revising Financial Plans for Flood Damage Repairs
The Slovenian government is currently reassessing its financial plans for 2024 and 2025 owing to the significant costs required to repair the extensive damage caused by devastating floods. The budget for 2024 was originally projected to be €15.2 billion, while the budget for 2025 was estimated at €15.9 billion. However, due to the pressing need to allocate funds towards flood damage repair, €1.1 billion will be redirected towards a flood recovery fund. This reallocation will inevitably result in substantial budget cuts across various ministries.
Significant Contributions and Cost-cutting Measures
The Slovenian Army is expected to contribute a significant portion towards the flood recovery fund, although some sources believe it could contribute more. On the other hand, the Ministry of Environment, Climate, and Energy proposed a cost-cutting measure that involves charging retirees for public transportation tickets. However, this measure was reportedly dismissed due to the potential political implications since retirees form a significant part of the voting base.
Multiple measures are being considered to finance the flood damage repair. One such measure is a 0.2% tax on the balance sheet total of banks. Additionally, some employer benefits introduced by the previous government might be abolished, and sick leave compensation could be recalculated as before the last mandate change, a less favorable arrangement for employers.
Ministries Reducing Expenditures amidst External Resistance
While ministries are making efforts to reduce expenditures, some external budget users are either disregarding or only partially adhering to the Ministry of Finance’s call for urgent saving. The State Council reportedly refused to cut its budget, while the Human Rights Ombudsman only partially considered the proposal for reduction.
Future Budget Approval and Recalculation
In the coming days, the Ministry of Finance will recalculate the outcome of the negotiations and evaluate if additional cuts are necessary. The budget is expected to be approved at the government session on Thursday, as it must be submitted to the National Assembly by October 1. Despite rumors of potential cuts in social transfers to save money, it has been confirmed that existing rights should remain, although their adjustment might be temporarily suspended.
Continuation of Crucial Projects amidst Budget Cuts
Minister of Infrastructure, Alenka Bratušek, confirmed that ongoing projects and those associated with European funds and have a completion deadline will not be affected. Also, projects related to flood damage repair will be prioritized, while others will be postponed for a year.
The Slovenian government’s efforts to manage the budget amidst the aftermath of the floods highlight the challenging balance of addressing urgent needs while maintaining fiscal responsibility. The decisions made during this period will have a profound impact on the country’s recovery and future resilience.
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