BELGIUM: European Commissioner for Economic and Monetary Affairs Olli Rehn says Slovenia's reform plan should be enough to avoid bailout

Record ID: 861116

  • Title: BELGIUM: European Commissioner for Economic and Monetary Affairs Olli Rehn says Slovenia's reform plan should be enough to avoid bailout
  • Date: 29th May 2013
  • Summary: BRUSSELS, BELGIUM (RECENT) (REUTERS) EXTERIOR OF EUROPEAN COMMISSION BUILDING EU COMMISSION LOGO
  • Embargoed: 13th June 2013 13:00
  • Keywords:
  • Location: Belgium
  • City:
  • Country: Belgium
  • Topics: European Union,Economy,Politics
  • Reuters ID: LVA6561HU9R3E0FV3FIJW4YTQFXF
  • Aspect Ratio:
  • Story Text: The European Commission said on Wednesday (May 29) that with a full implementation by Slovenia of its reform strategy, the euro zone country could avoid needing international financial aid.
    Slovenia is pushing ahead with large-scale privatisation plans, the clean-up of a debt-heavy banking sector and other structural reforms to fend off the risk of becoming the next euro zone country requiring a bailout.
    "Once fully implemented, this reform strategy - as it is spelled out in the reform programme and in the letter I've received from Minister Cufer - should lead to a sustainable correction of imbalances and to an improvement in market sentiment. This should help to end the recession in Slovenia and as such justified to grant Slovenia two more years to correct its excessive deficit," EU Commissioner for Economic policy and Monetary affairs Olli Rehn said during a presentation of the EU Commission's 2013 Country-Specific economic recommendations.
    Slovenia's Finance Minister Uros Cufer said Slovenia would do external stress test of banks as recommended, and added the country is considering lowering the national pension bill and rationalising its health system in order to further cut public spending.
    The Commission gave Slovenia two more years to cut its budget deficit below the EU ceiling of 3 percent of gross domestic product and said it should hire independent external advisers by June to conduct a system-wide bank asset quality review.
    Rehn added Slovenia should further reduce the public sector wage bill and social transfers and adopt and implement new structural measures to correct the excessive deficit by 2015.
    Slovenia was the fastest growing euro zone member in 2007 but was badly hit by the global crisis due to its dependency on exports. It fell into a new recession last year amid lower export demand and a fall of domestic spending caused by budget cuts.
    During the representation Rehn said Italy, Hungary, Latvia, Lithuanian and Romania were to exit the EU's excessive deficit procedure, which they had been put into for running deficits above the permitted threshold of 3 per cent of GDP.
    "The Commission is recommending an exit from the excessive deficit procedure or as it is called in the legislation, abrogation from the EDP for the following five countries in alphabetical order, for Hungary, Italy, Latvia, Lithuania and Romania," Rehn said.
    The recommendations, once approved by EU leaders at a summit in late June, will become binding and are expected to influence how national budgets are drafted for 2014 and onwards.
  • Copyright Holder: REUTERS
  • Copyright Notice: (c) Copyright Thomson Reuters 2013. Open For Restrictions - http://about.reuters.com/fulllegal.asp
  • Usage Terms/Restrictions: None
Register