Austerity Bill Passed in Unanimous Vote

The National Assembly unanimously passed a fiscal austerity bill to keep social benefits, pensions and public sector pay frozen at 2010 levels in the first half of 2012, securing EUR 65m in immediate savings.

The bill is the result of a concerted effort by the outgoing government and parties forming the new parliament which, headed by Speaker Gregor Virant and prospective PM-designate Zoran Janković, hammered out a compromise with the social partners in a matter of days. The first motion to be passed by the new parliament, the law stipulates that salaries of public employees and officials, pensions and social transfers, with the exception of unemployment allowance will remain frozen in the first half of 2012. Finance Ministry State Secretary Mateja Vranicar estimated that the law would bring about EUR 65m in savings, while the ministry had previously calculated that the savings would amount to EUR 260-300m if the freeze was valid throughout the year as initially proposed. After previous attempts at enacting a freeze that would prevent the rises agreed in 2008 to go ahead failed, the outgoing government filed the bill in parliament at Jankovic's initiative earlier this week, but the motion was amended to reduce the duration of the freeze to six months. As a result of the consensus, 86 members of the 90-strong Assembly voted for the motion today, with all the deputy factions voicing their support, even the Pensioners' Party (DeSUS), which until today had been staunchly opposed to the freeze on pensions. DeSUS leader Karl Erjavec told the chamber that the bill was bad as it extended to the most threatened group of population - pensioners, but that the executive committee of the party had decided today to back the bill to demonstrate it was a responsible party. Alenka Bratusek of Positive Slovenia said that he party was aware of the distress of some people, but that the law was absolutely needed to help restore financial markets' trust in Slovenia. "With this law we are well on track to reduce the price of borrowing."

The Democrats (SDS) support solutions that "bear the signature of the trade unions", but also expect fairer solutions to be introduced in the first half of 2012, especially when it comes to pensions, Andrej Vizjak said, labelling the bill "an emergency exit". One of the reasons the Social Democrat (SD) Janko Veber quoted for endorsing the bill was that it would not reduce income. He said one of the reasons the bill was necessary was for Slovenia to prove its capability of keeping its public finance under control. Kristina Valencic of Virant List and Jozef Horvat of New Slovenia (NSi) highlighted the importance of the consensus demonstrated over the law, with Valencic agreeing that its adoption was needed to demonstrate Slovenia's fiscal credibility. The People's Party (SLS) says that the savings made from the bill would be more substantial than those estimated by the Finance Ministry, party boss Radovan Zerjav said. President Danilo Tuerk welcomed the bill in a press release, labelling it as the first and very important step towards stabilisation of public finances in Slovenia. The unanimous endorsement is a "clear and encouraging signal to the public, and primarily to international financial markets, that Slovenia understands the need to take measures for tackling the consequences of the global financial crisis and recession". Tuerk believes that the agreement between the government, National Assembly and trade unions is a foundation for future agreements on reforms Slovenia needs for its development and wellbeing of its citizens. Before the vote, support for the bill was also voiced by Roberto Battelli and Laszlo Goencz, the MPs representing the Italian and Hungarian ethnic minorities, respectively. The pair also called for structural reforms. While the majority of trade unions support the bill, the Trade Union of Slovenian Police Officers announced they would start collecting signatures of support for a referendum on the bill because of the freeze of promotions. The union believes that underprivileged sections of the police force will be the most affected by the law. If the union manages to collect 2,500 signatures within seven days after the bill is passed, it will be in a position to halt the implementation of the bill by launching an initiative for collection of the 40,000 signatures necessary to call a referendum. Legal expert Miro Cerar told the STA that even if a bill is passed it cannot step into force in that case, because it would not be published in the Official Gazette. The National Assembly can, in turn, stop the collection of signatures by requesting a Constitutional review of the referendum motion, he added. But the law cannot step into force until the Constitutional Court makes a decision.

Souce: The Slovniatimes