Eurogroup statement on the updated draft budgetary plans of Slovenia for 2019

The Eurogroup welcomes Slovenia's submission of an updated draft budgetary plan (DBP) for 2019, as requested in its statement of 3 December 2018, as well as the Commission opinion issued on 27 February 2019.

On the back of growth above potential for a number of years, Slovenia’s nominal deficit has improved strongly, from a deficit of 5.5% of GDP still in 2014 to a projected budget surplus of 0.6% of GDP this year. Public debt is falling, too, and is projected to reach 66% of GDP this year. However, taking into account the cycle, the structural effort in both 2018 and for 2019 is falling short and the growth of public expenditure is exceeding what the Council recommended.

We agree therefore with the Commission opinion that the draft budget of Slovenia is at risk of non-compliance with the requirements of the preventive arm of the Stability and Growth Pact (SGP). According to the Commission assessment, Slovenia’s DBP might result in a significant deviation from the adjustment path towards its medium-term budgetary objective (MTO). Slovenia is expected to comply prima facie with the debt reduction benchmark in 2019.

The Eurogroup invites Slovenia to consider in a timely manner the necessary additional measures to address the risks identified by the Commission and to ensure that its 2019 budget will be compliant with SGP provisions.

We note that Latvia submitted its updated DBP on 19 February and that Luxembourg also intends to submit an updated DBP in the following days. We look forward to the Commission assessment of those updates.

We will continue to monitor euro area member states' fiscal and economic policies, as well as the budgetary situation of the euro area as a whole.