Recommendation for a Council Recommendation with a view to bringing an end to the situation of an excessive government deficit in Slovenia

On 2 December 2009, the Council decided, in accordance with Article 126(6) of the TFEU, that an excessive deficit existed in Slovenia and issued a recommendation to correct the excessive deficit by 2013 at the latest, in accordance with Article 3 of Council Regulation (EC) No 1467/97 of 7 July 1997 on speeding up and clarifying the implementation of the excessive deficit procedure.

On the basis of the Commission’s 2013 in-depth review on Slovenia the Commission considers that Slovenia is experiencing excessive macroeconomic imbalances. Sustainable improvements in fiscal, macroeconomic and labour market outcomes require simultaneous progress in reducing macroeconomic imbalances and correcting the excessive deficit.

Slovenia has seen real GDP falling considerably more abruptly than in the euro area as a whole as a result of the global economic and financial crisis as well as domestic imbalances. The real GDP drop of 7.8% in 2009 was driven mainly by trends in gross capital formation. The export-led recovery Slovenia enjoyed in 2010 and 2011, when real GDP grew by 1.2% and 0.6%, respectively, was modest due to the drag from weak domestic demand. In 2012 the Slovenian economy slipped into a double dip recession with a negative real GDP growth of -2.3%. A positive contribution to growth from net external demand was a result of robust growth of export to non-EU markets and a sharp decline in imports due to weak domestic demand.

Slovenia fulfils the conditions for the extension of the deadline for correcting the excessive general government deficit as laid out in Article 3(5) of Regulation (EC) No 1467/97 on speeding up and clarifying the implementation of the excessive deficit procedure.

• Primary Source

EUR-Lex: COM(2013)396: Follow the progress of this recommendation through the decision-making procedure http://eur-lex.europa.eu/legal-content/EN/HIS/?uri=COM:2013:396:FIN

ESO: Background information: Commission takes steps under the Excessive Deficit Procedure http://www.europeansources.info/record/memo-commission-takes-steps-under-the-excessive-deficit-procedure/

EUR-Lex: SWD(2013)396: Analysis by the Commission services of the budgetary situation in Slovenia http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=SWD:2013:396:FIN

---