COMMISSION STAFF WORKING DOCUMENT Assessment of the 2012 national reform programme and stability programme for SLOVENIA Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on Slovenia's 2012 national reform programme and delivering a Council opinion on Slovenia's updated stability programme, 2012-2015
Date: 2012-05-30
Institutions: European Commission
Subjects: Slovenia, banking system, budgetary equilibrium, economic reform, free competition, labour market, minimum pay, pension scheme, retirement conditions, temporary employment, work contract

EUROPEAN COMMISSION 

Brussels, 30.5.2012  
SWD(2012) 327 final 

COMMISSION STAFF WORKING DOCUMENT 

Assessment of the 2012 national reform programme and stability programme for 
SLOVENIA 

Accompanying the document 

Recommendation for a  

COUNCIL RECOMMENDATION 

on Slovenia's 2012 national reform programme and delivering a Council opinion on 
Slovenia's updated stability programme, 2012-2015 

{COM(2012) 327 final} 

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1.  EXECUTIVE SUMMARY 

According to the Commission services’ 2012 spring forecast, Slovenia's economic activity is 
projected to further contract in 2012, by 1.4%, before rebounding in 2013. Unemployment is 
foreseen to continue rising. 

No  major  structural  reforms  were  taken  in  2011.  The  latter  part  of  the  year  was  marked  by 
early  elections  and  the  caretaker  government  took  temporary  measures.  Slovenia  lacked  a 
fully-fledged  budget  for  2012  until  mid-May,  creating  uncertainty,  notably  over  the 
achievement  of  the  2012  deficit  target.  Following  the  early  elections  of  December  2011, 
Slovenia is now in the condition to address the structural reforms it needs. 

The challenges already identified last year remain relevant in 2012. Indeed, the intensification 
of market pressures lends new urgency to credible and durable fiscal consolidation, cleaning 
of  bank  balance  sheets  and  pension  reform.  Failure  to  overcome  the  other  challenges  could 
hamper the economy's adjustment and return to growth. Notably, labour market segmentation 
remains high in Slovenia and skills mismatches are being observed, with risks of transitions 
from  short-term  to  long  term  unemployment.  The  business  environment  is  not  attractive 
enough for businesses and investors. Finally, given current policy settings, renewed economic 
growth could reignite wage developments detrimental to competitiveness. 

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1. INTRODUCTION 

In  June  2011  the  Commission  proposed  six  country  specific  recommendations  (CSRs)  for 
economic and structural reform policies for Slovenia. In July 2011 the Council adopted these 
recommendations  which  concerned  (i)  public  finances  and  fiscal  governance,  (ii)  pension 
reform,  (iii)  banking  sector  balance  sheets,  (iv)  labour  market  segmentation,  (v)  skills 
mismatches and (vi) selected aspects of the business environment. 

In  November  2011,  the  Commission  published  its  Annual  Growth  Survey  for  2012  (AGS 
2012) in which it set out its proposals for building the necessary common understanding about 
the  priorities  for  action  at  national  and  EU  level  in  2012.  It  focused  on  five  priorities  – 
growth-friendly  fiscal  consolidation,  restoring  normal  lending  to  the  economy,  promoting 
growth  and  competitiveness,  tackling  unemployment  and  social  consequences  of  the  crisis, 
and modernising public administration – and encouraged Member States to implement them 
in the 2012 European semester. 

Slovenia  submitted  the  National  Reform  Programme  ("NRP")  on  13  April  2012  and  the 
Stability  Programme  ("SP")  on  26  April.  These  programmes  give  details  on  progress  made 
since July 2011 and plans going forward. The NRP follows some but not all of the guidelines 
provided by the Commission. It outlines measures and structural reforms and plans related to 
the 2012 AGS priorities and the Europe 2020 targets and clearly shows CSR implementation 
progress in the standard assessment table. Slovenia’s Europe 2020 targets have not changed 
since the 2011 NRP. The SP describes the fiscal consolidation strategy over 2012-2015 and 
includes all the elements requested in the Code of Conduct, with the exception of minor gaps 
in  compulsory  and  optional  data.  Some  additional  information  was  made  available  by  the 
authorities to update aspects of the programme following parliamentary adoption on 11 May 
of  the  austerity  package  (supplementary  budget  for  2012  and  Act  on  Balancing  Public 
Finances). Consistency between the NRP and SP is ensured through the sharing of a common 
macroeconomic  scenario.  The  NRP  was  discussed  in  the  competent  committees  of  the 
National Assembly, in the National Council and the Economic and Social Council, with both 
organisations involving representatives of employee and employer associations. The SP was 
discussed in the competent committees of the National Assembly. 

However,  the  NRP  often  lacks  detail  on  the  reform  agenda,  particularly  on  how  it  will  be 
implemented,  by  when,  by  whom  and  with  which  budgetary  consequences.  This  is 
particularly the case as regards major structural reform challenges in areas such as pensions, 
labour market functioning and the business environment. As a result, the NRP is insufficiently 
specific to enable the Commission to make a full assessment of the impact of reforms. In part 
this reflects the embryonic stage of development of the new government’s reform agenda and 
the fact that the reforms currently planned do not measure up to the scale and urgency of the 
economic challenge. 

This Staff Working Document assesses the state of implementation of the 2011 CSRs as well 
as  the  AGS  2012  in  Slovenia.  It  identifies  current  policy  challenges  and,  in  this  light, 
examines the country’s latest policy plans. 

Overall assessment 

2011 was a difficult year in Slovenia as the tentative economic recovery lost all momentum. 
There  was  a  complete  absence  of  major  structural  reform.  The  latter  part  of  the  year  was 

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marked by early elections and the caretaker government took temporary measures. Slovenia 
lacked a fully-fledged budget for 2012 until mid-May, creating uncertainty, notably over the 
achievement  of  the  2012  deficit  target,  and  decisions  regarding  the  availability  of  a  public 
backstop in the recapitalisation of the biggest bank were postponed to the new government, by 
which  time  the  European  Banking  Authority  (EBA)  deadline  was  fast  approaching.  The 
period was notable for high yields on Slovenian government bonds and multiple downgrades 
of the country’s sovereign and commercial bank credit ratings.  

This  lack  of  reform  and  policy  implementation  and  the  renewed  weakness  of  the  economy 
mean the challenges already identified and reflected in the country-specific recommendations 
addressed  to  Slovenia  in  June  2011  remain  relevant  in  2012.  Indeed,  the  intensification  of 
market pressures lends new urgency to credible and durable fiscal consolidation, cleaning of 
bank  balance  sheets  and  pension  reform.  Failure  to  overcome  the  other  challenges  could 
hamper  the  economy’s  adjustment  and  return  to  growth.  Notably,  the  reduction  of  labour 
market  segmentation  and  the  prevention  of  skills  mismatches  will  be  important  to  contain 
unemployment  and  prevent  transitions  from  short-term  to  long-term  unemployment.  In  the 
past year the business environment has not improved, making it harder for Slovenia to attract 
investment in productive activities. 

2. ECONOMIC DEVELOPMENTS AND CHALLENGES 

2.1. Recent economic developments and outlook 

Recent economic developments 

In the years preceding the crisis, Slovenia enjoyed faster economic growth than the euro area 
average, driven by buoyant exports and investment. However, by 2007 there were mounting 
indications  that  underlying  trends  were  leading  to  overheating  pressures  and  potential 
macroeconomic imbalances, particularly over-indebtedness in the corporate segment. 

Rapid  growth  ended  in  the  third  quarter  of  2008,  when  the  economy  was  hit  hard  by  the 
global  crisis,  chiefly  through  the  trade  channel,  coming  on  top  of  a  correction  in  the  over-
sized  construction  sector.  By  mid-2009,  real  GDP  had  dropped  by  nearly  10  pps.  from  the 
peak  reached  in  the  third  quarter  of  2008,  reversing  part  of  the  previous  catch-up  process. 
Difficulties  in  wholesale  financial  markets  forced  banks  to  turn  to  ECB  funding,  bond 
issuances (both with and without government guarantees) and government deposits. 

The export-led recovery Slovenia enjoyed in 2010 was very modest due to the continued drag 
from  weak  domestic  demand.  The  recovery  ended  in  2011  by  an  accelerated  contraction  in 
gross  fixed  capital  formation,  with  construction  investment  falling  by  23 %,  and  by  the 
renewed international slowdown. The real GDP growth outturn was negative in all quarters of 
2011,  with  the  steepest  fall  in  the  fourth  quarter.  Whereas  the  recession  in  2009  spread 
through the trade channel to the domestic economy on the verge of overheating, the situation 
in  2011  was  very  different,  with  domestic  demand  already  depressed,  deleveraging  already 
underway and more subdued price and wage developments. 

Weak domestic demand  was  a persistent feature of  the Slovenian economy during  the  2009 
recession,  the  period  of  export-led  recovery in  2010  and  the  subsequent  slowdown  in  2011, 
with wide-ranging consequences. Firstly, the economy has undergone a degree of adjustment, 
notably as regards the external balance and the inflation gap vis-à-vis the euro area average, 
although this may reflect cyclical as much as structural developments. Secondly, Slovenia’s 

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public  finances  deteriorated  rapidly  due  to  strong,  in-built  expenditure  dynamics  predicated 
on high growth, and for purely cyclical reasons. Thirdly, employment continues to fall (after 
initial  resilience  in  2009  due  to  labour  market  support  measures,  reflected  in  labour 
productivity).  Finally,  many  companies,  especially  those  targeting  the  domestic  market, 
struggle  to  service  debts.  There  have  been  significant  bankruptcies,  particularly  in  the 
construction sector. As a result, banks have continued to face substantial losses on their loan 
portfolios  at  a  time  when  they  face  repeated  stress  on  the  funding  side,  where  government 
deposits are required for deficit financing, guaranteed bonds are coming to maturity and the 
availability  of  wholesale  foreign  funding  has  not  improved.  These  trends  have  combined  to 
push the non-financial corporate sector into the early stages of a difficult deleveraging process 
and  caused  Slovenian  banks  to  access  the  ECB’s  three-year  longer-term  refinancing 
operations for funds amounting to almost 11 % of GDP in December 2011 and February 2012. 

Outlook 

Slovenia is forecast to continue to underperform the euro area in terms of real GDP dynamics 
as real GDP is forecast to contract by 1.4 % in 2012 before rebounding by 0.7 % in 2013. The 
main  drag  on  growth  from  the  retrenchment  in  construction  (due  to  the  lack  of  new  large 
infrastructural projects and a high stock of unsold new housing) and also private consumption 
(in  response  to  further  job  losses  and  negative  real  wage  growth  per  head)  is  projected  to 
continue in 2012 and, to a lesser extent, in 2013. Negative employment growth is projected to 
continue  and  inflation  is  expected  to  remain  below  the  euro-area  average  to  the  forecast 
horizon.  

The  macroeconomic  scenario  underlying 
the  budgetary  projections  of  the  stability 
programme, which is the same as that of the national reform programme, projects real GDP 
growth will rebound and strengthen gradually, from -0.9 % in 2012 to 2.2 % by the end of the 
programme  period  (2015),  driven  by  improving  investment  and  private  consumption 
prospects. A delayed response of the labour market and structural labour market weaknesses 
are  projected  to  result  in  a  jobless  rebound  with  employment  stabilising  only  in  2015. 
Assessed  against  currently  available  information,  including  the  Commission  services’  2012 
spring  forecast, 
these  macroeconomic  projections  appear  favourable  throughout  the 
programme period.1 

2.2. Challenges 

The 2011 European Semester assessment identified six key challenges:  

(i)  ensuring  long-term  sustainability  of  public  finances,  including  by  addressing  the  low 
employment rate of older workers;  

(ii) repairing the financial sector;  

(iii) improving Slovenia’s external trade prospects, which are hampered by past losses to its 
cost competitiveness;  

(iv) reducing labour market segmentation, including that arising from "student work";  

(v) improving the overall business and competition framework, particularly in services;  

1  The  exception  to  this  pattern  is  the  macroeconomic  scenario's  employment  projection,  which  is  more 

unfavourable than the Commission services' 2012 spring forecast. 

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(vi)  better  harnessing  research  and  development  and  meeting  the  needs  for  new  skills  to 
support growth and the upgrading of Slovenia’s production structure.  

These challenges, which were reflected in the country-specific recommendations addressed to 
Slovenia  in  June  20112,  remain  equally  relevant  in  2012  because  nothing  significant  has 
happened  to  alter  this  assessment  in  the  intervening  period,  during  which  the  economic 
recovery lost its momentum and economic reforms failed to materialise. 

These challenges, as brought forward from 2011, are also in line with the priorities outlined in 
the  2012  Annual  Growth  Survey.  If  anything,  recent  developments  lend  even  greater 
emphasis to some of them. This is notably the case for fiscal policy and pension sustainability, 
as  it  is  now  clear  that  even  relatively  low-debt  countries  such  as  Slovenia  can  face  severe 
difficulties  funding  their  general  government  deficit  and  debt  rollover  needs  on  the  market. 
Likewise,  the  continued  deterioration  in  the  labour  market  and  the  extent  of  sectoral 
restructuring still required following the construction boom further emphasise the pertinence 
of  the  challenges  identified  in  the  labour  market  and  the  overall  business  and  competition 
framework. Furthermore, it is now apparent that the financial sector challenge is greater than 
previously  thought  and  that  the  extent  of  repair  required  before  credit  flow  to  productive 
activities  and  high  investment  levels  can  be  restored  will  have  to  go  beyond  balance  sheet 
cleaning and recapitalisation. It will inevitably involve a painful period of deleveraging and it 
will require more equity financing from abroad. 

The challenges facing the Slovenian economy are closely interwoven and developments in the 
past  year  have  emphasised  the  crucial  link  between  the  banking  sector  and  the  business 
environment,  in  the  broadest  sense,  including  judicial  and  legal  frameworks.  The  banking 
sector  is  struggling  to  restructure  its  problematic  exposure  to  over-indebted  non-financial 
corporations, requiring timely resolution either through bankruptcy or restructuring. There are 
lengthy and cumbersome court proceedings, during which loan collateral — often in the form 
of real estate or stocks — may effectively be frozen. Restructuring of loans and the resolution 
of  uncertainties  over  future  ownership  are  difficult,  especially  when  several  banks  are 
involved. These difficulties harm banks, keep the real estate market in suspended animation 
and  stifle  financing  and  investment  in  viable  companies,  notably  small  and  medium-sized 
enterprises.  This  expanded  challenge  relating  to  the  business  environment  (in  the  broadest 
sense) also corresponds to a 2012 Annual Growth Survey priority. 

Box  1:  Summary  of  the  results  of  the  in-depth  review  under  the  macroeconomic  imbalances 
procedure 

Rapid growth, credit expansion and strong domestic demand have left Slovenia with a legacy of thinly 
capitalised banks reliant on foreign funding, over-indebted companies, a bloated construction sector, 
high  real  estate  prices,  deteriorated  cost-competitiveness  and  a  large  negative  net  international 
investment position. This was caused by excessive and — in retrospect — unwise lending by banks 
during the years of plentiful and cheap wholesale financing. Luckily the financial health of households 
was  largely  unscathed  and  the  boom  was  relatively  short-lived,  meaning  the  stock  of  internal  and 
external debt has remained — in aggregate — relatively limited. De-leveraging is underway and the 
necessary  adjustment  process  in  Slovenia  is  expected  to  be  lengthy.  However,  negative  spillover 
effects for other euro-area economies are expected to be small.  

2   The  2011  recommendations  covered  (i)  public  finances  and  fiscal  governance,  (ii)  pension  reform,  (iii) 
banking  sector  balance  sheets,  (iv)  labour  market  segmentation,  (v)  skills  mismatches  and  (vi)  selected 
aspects of the business environment. 

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Depressed  output  has  helped  to  close  the  current  account  deficit,  but  competitiveness  losses 
accumulated  in  2008-2010  could  contribute  to  the  future  reappearance  of  external  imbalances.  Solid 
economic  growth  and  strong  export  performance  would  help  correct  these  internal  imbalances  and 
prevent the re-emergence  of external imbalances. However, this is difficult to achieve in the face of 
weak  external  demand,  a  shrinking  construction  sector,  private  sector  deleveraging  and  fiscal 
consolidation.  It  is  also  hampered  by  the  current  product  structure  and  geographical  orientation  of 
Slovenia’s  exports.  It  will  take  a  substantial  amount  of  time  to  overcome  these  obstacles  given  the 
weaknesses identified in the economy’s adjustment capacity. 

In  this  context,  possible  further  areas  for  a  relevant  policy  response  could  be  found  in  corporate 
governance and prudential standards in the financial sector, in the business environment for FDI and in 
cost competitiveness. Some specific areas for consideration include reducing the state’s shareholdings, 
addressing  the  multiple  challenges  identified  in  the  business  environment  in  the  context  of  the 
European semester, and refraining from public and minimum wage policies that could put pressure on 
wage costs.  

3. ASSESSMENT OF POLICY AGENDA 

3.1. Fiscal policy and taxation 

Budgetary developments and debt dynamics 

The  main  goal  of  the  programme’s  medium-term  budgetary  strategy  is  to  bring  the  general 
government deficit below 3 % of GDP in 2013, the deadline set by the Council and to pursue 
further  deficit  reduction  thereafter  so  as  to  broadly  achieve  Slovenia’s  medium-term 
budgetary objective (MTO) by the end of the programme period (2015)3. The MTO is defined 
as a balanced position in structural terms, unchanged from the previous programme. The 2011 
assessment  was  that  this  MTO  could  not  be  regarded  as  appropriate  for  Slovenia  under  the 
provisions  of  the  Stability  and  Growth  Pact  as  it  was  predicated  on  the  expected  beneficial 
impact of a pension reform on age-related spending in the long term, an impact that could not 
be  assessed  at  the  time.  Given  that  this  pension  reform  has  since  been  rejected  in  a 
referendum, the conclusion that this MTO cannot be regarded as appropriate remains because, 
based  on  current  policies  and  projections,  it  does  not  ensure  sufficiently  rapid  progress 
towards long-term sustainability.4 

The deficit outturn for 2011 is 6.4 % of GDP. Without significant one-offs related to capital 
support operations (including a recapitalisation of the largest banking group, NLB), estimated 
by  the  Commission  services  at  1 %  of  GDP5,  it  would  have  been  5.4 %  of  GDP.  The 
difference  from  the  deficit  target  of  5.5%  of  GDP  set  in  the  April  2011  programme  is 
explained by lower-than-planned revenue growth (2.4 % vs. 1.2 %), with a large undershoot in 
indirect taxes, as well as by a more negative starting position as the 2010 deficit turned out to 

3  According  to the  programme, the  (recalculated)  structural  balance (i.e.  the  cyclically  adjusted  balance  net  of 
one-off and temporary measures, recalculated by the Commission services on the basis of the information 
provided in the programme, using the commonly agreed methodology) is -0.1% of GDP in 2015. Additional 
information received from the authorities updating aspects of the programme after parliamentary adoption 
on 11 May of the austerity package points to a structural deficit of -0.2% of GDP in 2015. 

4 This assessment is based on the minimum MTO established in 2009. The minimum MTO will be updated this 
year, in line with Article 2a of Regulation (EC) No 1466/97 requiring that the MTO should be revised every 
three years. 

5 This is the figure used in the rest of the text (the programme estimates one-offs in 2011 at 1.3% of GDP). The 

programme does not indicate one-offs in the remaining years of the programme period. 

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be  higher  than  estimated  in  the  previous  programme  (5.5 %  vs.  6.0 %  of  GDP)  due  to 
expenditure slippages. Expenditure grew less than budgeted in 2011 (2.3 % vs. 2.0 %) 

The deficit target for 2012 is set at 3.5 % of GDP (3.6 % according to additional information 
from the authorities following parliamentary adoption of the austerity package), better than in 
the  previous  programme  (3.9 %)  in  spite  of  the  worse-than-planned  deficit  outturn  for  2011 
and a strong downward revision of the underlying macroeconomic scenario (real GDP growth 
in 2012 has been revised from +2.2 % in the previous programme to -0.9 %). 

The consolidation effort planned over the programme horizon is frontloaded as the deficit is 
targeted  to  drop  by  almost  2  percentage  points  of  GDP  in  2012  (excluding  the  one-offs 
recorded  in  2011)  and  by  about  1  percentage  point  in  each  of  the  remaining  years.  As  the 
interest burden is projected to rise markedly in 2012 (from 2 % of GDP in 2011 to 2.5 %), the 
adjustment  in  primary  terms  in  2012  is  even  higher;  after  2012  interest  expenditure  is 
projected  to  remain  broadly  stable  as  a  percent  of  GDP.  Growing  primary  surpluses  are 
planned to be recorded as of 2013. Compared with the previous programme, the planned pace 
of headline deficit reduction in 2013-14 is unchanged so that the deficit targets for those years 
are  slightly  better  given  the  more  demanding  target  set  for  2012.  According  to  additional 
information  received  from  the  authorities,  the  impact  of  the  final  version  of  the  austerity 
package, which was approved by Parliament after the submission of the stability programme, 
is to increase the deficit targets for the period 2012-15 marginally, namely by 0.1 pp. of GDP 
in each year. 

The  programme’s  revenue  and  expenditure  projections  (as  updated  to  reflect  parliamentary 
approval of the austerity package) indicate a predominantly expenditure-based consolidation 
effort. In particular, primary expenditure is planned to fall by almost 6 percentage points of 
GDP between 2011 and 2015 (again, excluding the one-offs recorded in 2011), while revenue 
is  projected  to  drop  by  some  ½  percentage  point.  The  envisaged  expenditure  restraint  is 
broad-based,  affecting  social  transfers,  the  public  sector  wage  bill  and  intermediate 
consumption, which together fall by more than 4 percentage points of GDP, while subsidies, 
public investment and other expenditure fall by about ½ percentage point each. 

The planned consolidation effort is fully underpinned by measures for 2012 and partly as far 
as  the  remaining  years  of  the  programme  are  concerned.6  In  particular,  the  supplementary 
budget  for  2012  was  adopted  by  parliament  on  11  May  2012,7  together  with  the  Act  on 
Balancing  Public  Finances,  which  has  a  multi-annual  perspective  and  extends  some  of  the 
budget  consolidation  measures  until  after  2012  and  implements  some  additional  ones.  The 
main measures are summarised in Box 2.  

Box 2. Main measures 
The budget for 2012 and Act on Balancing Public Finances, which were adopted by parliament 
on  11  May  2012,  implement  broad-based  expenditure  restraint.  Most  expenditure-restraining 

6 This is reflected in the wide gap between the 2013 deficit target and the deficit projection in the Commission 
services’ 2012 spring forecast of 1.3% of GDP. The gap is due to (i) the base effect from a worse deficit 
projection for 2012 in the spring forecast, (ii) a worse macroeconomic scenario for 2013 and (iii) a cautious 
assessment of the measures foreseen for 2013. 

7 The original budget for 2012 was adopted in autumn 2010 as part of the two-year budget (2011/2012) that is 
usual practice in Slovenia, but did not contain any measures to underpin the 2012 targets and projections set 
therein.  The  adoption  of  the  supplementary  budget  for  2012  was  postponed  to  spring  2012  given  the 
December 2011 early general elections. 

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measures  are  of  a  temporary  nature,  with  either  a  fixed  expiry  date  (e.g.  till  end-2013)  or  a 
conditional one (e.g. until the year after the year in which real GDP growth exceeds 2.5 %). On 
the revenue side, for 2012 the positive impact of higher excise duties and charges (concession 
fees)  on  student  work  and  of  the new  temporary  real  estate  tax  (till  end-2014)  is  almost 
fully offset by the impact of direct tax relief. The corporate income tax rate will gradually be cut 
further until 2015, while in 2013 the government will implement some changes to the personal 
income tax system with net revenue-reducing impact. 
The programme does not include the impact on the public finance projections of major macro-
structural reforms as these reforms (of pensions and health care) are to be agreed in the context 
of negotiations with social partners on the Social Agreement for the period 2012-2016. 

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  Main budgetary measures 
  Revenue 
2011 
•  Higher excise duties on tobacco (0.1 %) 

Expenditure 

•  Lower indexation of pensions (until end-
2012) and other social benefit rates (until 
end-2014) (-0.25 %) 

•  Public  sector  wage  bill:  freeze  on 
promotions  (until  end-2012)  and  lower 
performance  and  workload  bonuses 
(until end-2013) (-0.3 %) 

•  Lower 

•  Public sector wage bill: net cut in wages 
by  3 %  and  lower  holiday  and  other 
allowances  (the  latter  until  end-2013)  (-
0.3 %; full-year impact: -0.6 %) 
recreational 

for 
pensioners  (until  the  year  after  the  year 
in  which  real  GDP  growth  exceeds 
2.5 %)  and  lower  specific  pensions  not 
based  on  paid  contributions  (until  end-
2012) (-0.15 %) 

allowance 

•  Lower  coverage  of  certain  health-care 
services  and  medicines  from  mandatory 
health  insurance  scheme  (-0.15 %;  full-
year impact: -0.3 %) 

•  Restraint in subsidies (-0.3 %) 
•  Restraint in gross fixed capital formation 

(-0.4 %) 

•  Lower  parental  allowance  for  child  care 
(until the year after the year in which real 
GDP growth exceeds 2.5 %) (-0.1 %) 

•  Restraint in subsidies (-0.3 %) 

2012 

•  Reduction in the corporate income tax rate from 
20 %  to  18 %  and  higher  R&D  and  investment 
allowances  for  personal  and  corporate  income 
tax (-0.3 %) 

•  Higher excise duty rates on tobacco and alcohol 

(0.1 %) 

•  Higher  charges  (concession  fees)  on  student 

work (0.1 %) 

•  New  real  estate  tax  (until  end-2014)  (0.2 %; 

full-year impact: 0.4 %) 

2013 

•  Further  reduction  in  the  corporate  income  tax 

rate, to 17 % (-0.1 %) 

•  Higher  taxation  on  vehicles,  road  use  and 

financial income of households (0.1%) 

•  Personal income tax relief: higher threshold for 
the  bracket  taxed  at  41 %  (permanent),  partly 
compensated  for  high-wage  earners  by  new 
bracket taxed at 50 % (until end-2014) (-0.1 %) 

2014 

•  Further  reduction  in  the  corporate  income  tax 

rate, to 16 % (-0.1%) 

2015 

•  Further  reduction  in  the  corporate  income  tax 

rate, to 15 % (-0.1%) 

  Note:  The  budgetary  impact  in  the  table  is  the  impact  reported  in  the  programme,  i.e.  by  the 
national authorities. A positive sign implies that revenue / expenditure increases as a consequence 
of this measure. The degree of detail reflects the type of information made available in the stability 
programme and other budget documents. 

There  are  risks  that  the  deficit  outcomes  could  be  worse  than  targeted  throughout  the 
programme period. The measures for the period 2013-15 are not yet fully spelled out and the 

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programme also does not indicate what measures will be taken to compensate for the expiry 
of  the  temporary  expenditure-restraining  measures  (see  Box  2  for  overview).  Furthermore, 
there  is  a  general  risk  of  expenditure  overruns  based  on  the  past  track  record,  especially  in 
view of the very significant restraint embodied in the programme projections, although, as has 
happened  before,  emerging  overruns  in  primary  current  expenditure  may  to  some  extent  be 
offset by higher-than-planned cuts in public investment. Also, the revenue projections may be 
on  the  optimistic  side  because  (i)  the  macroeconomic  scenario  could  turn  out  worse  than 
envisaged,  (ii)  the  roll-out  of  the  new  IT  tax  administration  system  could  generate  lower 
additional revenue than expected, (iii) revenue from the new real estate tax could fall short of 
expectations  and  (iv)  the  impact  of  the  multi-annual  direct  tax  relief  could  be  larger  than 
accounted for in the programme8. This risk might be partly offset by revenue from possible 
auctions for CO2 emission coupons as from 2013, which is not included in the SP projections. 
Finally, there is a non-negligible risk of additional capital support operations (e.g. the pending 
second recapitalisation of NLB) and the calling of guarantees could entail higher outlays than 
currently projected (about 0.1 % of GDP annually). 

The frontloaded nature of the planned consolidation effort is confirmed by the programme’s 
projections  for  the  change  in  the  (recalculated)  structural  balance,  as  updated  to  reflect 
parliamentary approval of the austerity package. This indicates a fiscal effort of 2¼ % of GDP 
in 2012, followed by ½ % in 2013, ¼ % in 2014 and ½ % in 2015. The average annual fiscal 
effort  over  the  EDP  correction  period  (2010-13)  is  thus  planned  to  be  almost  1 %  of  GDP, 
slighty  above  the  level  recommended  by  the  Council  (¾ %).  Based  on  the  Commission 
services’ 2012 spring forecast, which is based on a cautious assessment of the measures for 
2012-13 in the draft supplementary budget and draft Act on Balancing Public Finances, the 
average annual fiscal effort for the period 2010-12 stands at around ¾ % of GDP, still in line 
with the Council recommendation. The structural balance is projected to improve by another 
¼ %  of  GDP  in  2013  taking  into  account  all  measures  known  at  the  forecast  cut-off  date, 
which implies that additional effort will have to be made to respect the recommendation over 
the entire correction period. A re-assessment of the spring forecast reflecting the parliament-
approved  version  of  the  austerity  package  points  to  a  slightly  lower  average  annual  fiscal 
effort  for  the  period  2010-12  (still  rounded  to  ¾ %  of  GDP)  and  no  further  structural 
improvement  in  2013,  thus  reinforcing  this  assessment.  However,  when  taking  into  account 
the  change  in  the  macroeconomic  scenario  between  the  projections  underlying  the  EDP 
recommendations  and  the  2012  spring  forecast,  it  appears  that  the  current  estimate  of  the 
fiscal  effort  is  affected  by  the  downward  revision  of  underlying  growth  prospects;  when 
correcting for this downward revision, the estimated fiscal effort over 2010-12 would actually 
exceed the one recommended by the Council. 

After  the  envisaged  correction  of  the  excessive  deficit  in  2013,  the  annual  pace  of  progress 
towards the MTO according to the programme is in line with the 0.5 % benchmark set in the 
Stability  and  Growth  Pact  in  2015  but  below  it  in  2014.  According  to  the  information 
provided in the programme, the expenditure benchmark (which applies only after the planned 
correction  of  the  excessive  deficit)  will  be  respected  in  2014-15  as  the  real  growth  rate  of 
government expenditure, net of discretionary revenue measures, is planned to be negative and 
will  thus  be  below  a  rate  which  is  lower  than  the  reference  medium-term  rate  of  potential 
GDP growth and which ensures an annual structural adjustment towards the MTO by 0.5 % of 
GDP  (0.64 %).  Following  an  overall  assessment  of  Slovenia’s  budgetary  plans  after  the 
planned  correction  of  the  excessive  deficit,  with  the  structural  balance  as  a  reference  and 

8 The programme recalls that the previous multi-annual corporate tax reform implemented over the 2007-2010 

period had a larger negative impact on revenue than initially estimated. 

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including  an  analysis  of  expenditure  net  of  discretionary  revenue  measures,  the  planned 
adjustment path towards the MTO seems to be broadly appropriate. However, the risks to the 
budgetary strategy highlighted above imply that progress towards the MTO could be slower 
than appropriate, thus putting the planned achievement of the (inappropriately low) MTO by 
2015 at risk. 

Overall,  some  parts  of  the  2011  country-specific  recommendation  in  the  area  of  fiscal 
consolidation were implemented and others were not. In particular, although the 2011 deficit 
target was not achieved, the 2012 deficit target, which is more demanding than the one meant 
in the 2011 country-specific recommendation, was underpinned with concrete measures and 
some  measures  for  the  period  beyond  were  also  spelled  out  in  the  Act  on  Balancing  Public 
Finances, although most of them are of a temporary nature. At the same time, based on the 
Commission services’ evaluation, the average annual fiscal effort over the period 2010-12 is 
in  line  with  the  Council  recommendation  under  the  EDP  but  an  additional  effort  will  be 
needed  in  2013.  Furthermore,  there  is  some  risk  to  the  appropriateness  of  the  pace  of 
adjustment  towards  the  MTO  and  the  MTO  itself  cannot  be  regarded  as  appropriate  for 
Slovenia.  

From  around  48 %  of  GDP  in  2011,  general  government  gross  debt  is  projected  in  the 
programme  to  rise  to  53 %  by  2013  before  falling  slightly  to  51 %  by  the  end  of  the 
programme period. The snowball effect increases the debt ratio over the entire period but for 
the  primary  deficit  and  stockflow  adjustment  this  holds  only  until  2012.  Risks  to  the  debt 
projections  in  the  programme  arise  from  those  to  the  deficit  targets  highlighted  above  and 
from  a  higher-than-projected  stock-flow  adjustment.  According  to  the  Commission  services 
2012 spring forecast, the debt ratio is likely to be much higher in 2012-13 given the higher 
primary  deficits,  lower  economic  growth  and  higher  stock-flow  adjustment.  Still,  the  debt 
ratio should remain below the 60 % of GDP reference value until 2013, so the debt reduction 
benchmark is not applicable. 

Long-term sustainability 

The long-term change in age-related expenditure is clearly above the EU average. The initial 
budgetary  position  compounds  the  long-term  costs.  Under  a  no-policy-change  assumption, 
debt is likely to increase to 66.8 % of GDP by 2020. However, the full implementation of the 
stability  programme  should  be  enough  to  put  debt  on  a  downward  path  by  2020.  Ensuring 
sufficient primary surpluses over the medium term and reforming the pension system, so as to 
curb  the  projected  substantial  increase  in  age-related  expenditure,  would  improve  the 
sustainability of public finances. 

Slovenia was recommended to take the required steps to ensure the long-term sustainability of 
the  pension  system,  while  preserving  the  adequacy  of  pensions  (see  section  3.3  for  the 
assessment  of  labour  market  aspects  covered  by  this  2011  recommendation).  Systemic 
changes were not within the power of the government, owing to the 12-month moratorium on 
legislation after a referendum,9 but short-term cost containment measures were prolonged and 
strengthened  at  the  end  of  December  2011  and  again  in  the  May  2012  Act  on  Balancing 
Public Finances. While relevant and beneficial in the short term, these stop-gap measures are 
clearly  insufficiently  ambitious  to  address  the  long-term  challenge.  In  the  NRP  and  SP  the 
government envisages a new pension reform, based on a multi-pillar system and a rise in the 

9 The previous parliament adopted a pension reform in December 2010, which was rejected in a referendum in 

June 2011. 

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effective retirement age, to be implemented by the end of 2013. While no further details are 
provided, the degree of ambition of these reform plans seems modest given the scale of the 
challenge. 

Fiscal framework 

Slovenia  was  recommended  to  implement  a  more  binding  medium-term  budgetary 
framework.  The  recommendation  was  not  implemented  as  parliament  rejected  relevant 
amendments  to  the  Public  Finance  Act.  Slovenia’s  medium-term  budgetary  framework  and 
expenditure  rule  thus  remain  insufficiently  binding  and  insufficiently  focused  on  achieving 
the medium-term objective for the budgetary position and to secure long-term sustainability. 
The recently established Fiscal Council does not yet weigh in on fiscal strategy as it has yet to 
earn  a  reputation  and  an  important  role  within  Slovenian  budgetary  procedures.  Efforts  to 
make  Slovenia’s  fiscal  framework  more  binding  are  underway,  with  a  constitutional  fiscal 
rule  currently  under  consideration  (a  two-thirds  parliamentary  majority  will  be  needed) 
stipulating  that  the  general  government  budgetary  position  in  structural  terms  should  be 
balanced  or  in  surplus  unless  there  are  exceptional  circumstances.  A  parallel  draft 
constitutional act sets out implementing provisions for this new rule, including escape clauses, 
an automatic correction mechanism and a stronger role of the Fiscal Council. This approach 
certainly  appears  relevant,  but  the  stringency  of  the  rule  will  depend  on  the  final  technical 
details. 

Tax system 

Compared to the EU average, in Slovenia the tax burden on capital is low, average in relation 
to  labour  and  high  in  relation  to  consumption.  A  specific  feature  of  the  tax  system  is  the 
relatively  high  share  of  social  contributions,  which  offsets  a  relatively  low  share  of  income 
taxes. Overall, taxation on consumption has remained stable since 2000 with the implicit tax 
rate  oscillating  around  24 %.  Taxation  on  labour  has  declined,  as  shown  by  a  drop  from 
37.5 % to 35 % of the implicit tax rate on labour during the last four years in observation. In 
autumn  2011,  the  tax  administration  launched  a  new  electronic  system  for  tax  collection, 
which in time could have a positive impact on the time for tax compliance and help combat 
tax evasion. This may also help combat the shadow economy. Furthermore, the time taken for 
tax compliance may indicate scope for administrative simplification (although  the system is 
already cost-efficient). The new government has drafted an aggressive direct tax relief, most 
of which was already adopted in April 2012 with effects as of January 2012. It provides for a 
gradual  lowering  of  the  corporate  income  tax  rate  from  20 %  in  2011  to  15%  by  2015  and 
increased  tax  allowances  for  R&D  and  investment.  The  NRP  envisages  a  further 
simplification  of  the  tax  system,  including  for  small  and  medium-sized  enterprises,  and  the 
restructuring of taxation of movable and immovable property (no details available). There is 
scope  for  growth-friendly,  revenue-neutral  tax  shifting  as  recurrent  taxation  of  immovable 
property  is  rather  low.  A  closer  link  between  the  recurrent  property  value  tax  and  actual 
market values might also restrain future housing market bubbles. 

3.2. Financial sector 

Slovenia  was  recommended  to  facilitate  the  strengthening  of  banks’  balance  sheets,  with  a 
view to enhancing the flow of credit to the real economy. This is fully in line with the 2012 
Annual Growth Survey. Following the October 2011 European Council conclusions and the 
temporary  recapitalisation  exercise  for  systemically  important  banks  coordinated  by  the 
European Banking Authority, the biggest bank (NLB) was requested to raise fresh capital to 

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comply with the higher minimum core Tier 1 capital ratio of 9 %.10 As highlighted above, the 
situation  in  the  banking  sector  now  appears  even  more  challenging  than  at  the  time  of  the 
2011  assessment.  The  full-year  losses  of  the  sector  in  2011  were  substantial  and,  looking 
ahead, the slowing economy will bring further loan losses as more companies struggle with 
debt service. Increasing competition for scarce capital and retail deposits will prove expensive 
for  banks  with  limited  income-generating  opportunities.  Tighter  lending  conditions  mean 
companies  (especially  small  and  medium-sized  enterprises  that  lack  collateral)  struggle  to 
obtain  funding  for  investment  projects  and  for  working  capital.11  It  may  not  be  possible  to 
resume healthy levels of lending until further balance sheet repair is carried out both in banks 
and in non-financial corporations, which are often themselves lightly capitalised.  

Judged  against  the  2011  recommendation,  the  Annual  Growth  Survey  priorities,  and  the 
worsening  situation,  the  measures  introduced  or  announced  so  far  lack  ambition  given  the 
scale  of  the  challenge.  Against  a  backdrop  of  increasing  political  deadlock,  the  previous 
government  did  not  push  forward  the  urgent  second  recapitalisation  of  NLB.  The  new 
government  has  indicated  its  intention  to  reduce  its  shareholdings  in  the  systemically 
important major banks to a blocking minority (which may itself deter some investors) but has 
so far failed to clarify the relationship between this longer-term goal and the immediate and 
pressing need for fresh capital, where the state as majority owner unambiguously carries the 
burden  of  responsibility  in  the  final  analysis.  A  clear  privatisation  strategy  underpinned  by 
timely  injections  of  capital  to  cover  realised  and  anticipated  losses,  a  guarantee  of  good 
governance  and  professional,  de-politicised  management  would  make  this  policy  and  the 
potential sale of these banks more credible. 

In 2011, a modest, selective balance sheet tax was introduced to stimulate lending but in the 
2011  Staff  Working  Document,  this  was  not  expected  to  incentivise  banks  to  reprioritise 
lending  to  industries  with  growth  potential  and  lower  indebtedness.  However,  it  would  be 
difficult to discern the precise impact of this small measure in the overall context of relatively 
rapid  deleveraging.  Initiatives  to  facilitate  recovery  of  claims  and  asset  disposals  where 
companies  owed  money  to  several  banks  have  stalled  due  to  lack  of  cooperation  and 
agreement among banks. The NRP lacks substance on measures to repair the financial system 
in  spite  of  recognising  the  lack  of  sufficient  capital  and  the  need  for  efficient  and  de-
politicised management. It states that the second recapitalisation of NLB should be carried out 
primarily  without  any  direct  budget  funds.  The  Bank  of  Slovenia  has  recently  adopted 
prudential  regulations  to  limit  the  pressure  of  competition  for  deposits  on  banks’  margins, 
which  may  help  incumbents  in  the  retail  banking  market  to  protect  their  deposit  base  from 
banks  seeking  to  enter  this  market.  The  Bank  of  Slovenia  has  also  signalled  that  it  has  the 
power to intervene directly in the management of commercial banks, which may play a role in 
encouraging management to focus on balance sheet cleaning and recapitalisation, but which in 
any  case  would  not  be  required  if  good  corporate  governance  were  guaranteed  at  the  state-
owned banks. 

10  The  EBA’s  October  2011  temporary  bank  recapitalisation  exercise  identified  additional  capital  needs  of 
EUR 320 m at NLB (which had already received a capital injection of 0.7% of GDP from the state in March 
2011).  Further  losses  in  2011  have  now  resulted  in  a  greater  recapitalisation  need  at  NLB  and  the 
appearance of a shortfall below the required 9 % core Tier 1 capital ratio at a second bank, NKBM. At the 
time of writing, these recapitalisations have not occurred. 

11 Larger companies are less dependent on the domestic banking sector. 

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3.3. Labour market, education and social policies 

Several  labour  market  challenges  were  identified  in  2011  and  these  were  reflected  in 
recommendations relating to the employment of older workers, labour market segmentation, 
skills and competences and — implicitly — professions. These recommendations, which are 
broadly in line with 2012 Annual Growth Survey priorities, have either not been implemented 
at all or only partially. Meanwhile, the context has worsened, with employment still falling, 
unemployment rising and hence a greater risk of long-term unemployment. Prospects remain 
subdued pending correction of the unit labour cost increases accumulated in 2008-2010.  

Policy  intervention  over  the  past  year  has  avoided  further  damage  to  the  economy’s  cost-
competitiveness,  but  has  not  sought  to  redress  the  deterioration  that  has  accumulated  since 
2008.  Public-sector  pay  restraint  has  been  extended  and  tightened.  The  wage  bill  was 
contained  by  ceasing  to  pay  various  bonuses,  a  ban  on  promotions,  recruitment  restrictions 
and limited indexation. The remaining instalments of the public-sector wage agreement will 
be  paid  out  in  June  2012,  but  they  will  be  more  than  offset  by  a  nominal  cut  in  the  public 
sector wages in June 2012 and a cut in holiday and other work related allowances for public 
employees. As regards the minimum wage, there was no further discretionary uplift as there 
was in 2010, although there is full indexation for inflation in the previous year. In 2011 the 
minimum wage as a percentage of the average wage was among the highest in the EU (it is 
still below the poverty threshold). In these respects, policy has been less harmful than in 2008 
and 2010, cutting nominal growth of average wages in the private sector from 5.1 % in 2010 
to 2.6 % in 2011 and achieving a second consecutive year of zero nominal growth of average 
wages  in  the  public  sector.  However,  as  policy  currently  stands,  there  are  strong  in-built 
dynamics in both these areas that could reignite adverse trends in the coming years. Renewed 
economic growth would also put pressure on wages just above the level of the new minimum 
wage as employees seek to re-establish differentials that were compressed in 2010. 

Regarding  the  2011  recommendation  on  pension  sustainability  and  adequacy,  Slovenia  was 
recommended to increase the employment rate of older workers by postponing the retirement 
age and better tailoring active labour market policies. The NRP does not specify whether the 
announced  pension  reform  negotiations  will  also  encompass  issues  related  to  active  ageing 
and lifelong learning and does not indicate whether the government will seek to equalise the 
retirement  age  for  men  and  women.  So  far,  no  specific  measures  tailored  for  older  workers 
have  been  implemented,  although  the  2012-15  guidelines  for  the  implementation  of  active 
labour  market  policy  measures  and  the  2012  plan  for  the  implementation  of  active 
employment  policy  measures  (both  adopted  in  December  2011)  address  older  unemployed 
persons  as  a  specific  target  group.  The  guidelines  offer  a  framework  of  measures  to  tackle 
problems  in  the  Slovenian  labour  market  and  the  plan  sets  concrete  goals  regarding  the 
inclusion of the unemployed in active labour market policy measures. However the numbers 
are  similar  to  those  included  in  active  labour  market  policy  measures  in  2010,  and  appear 
inadequate given the rising trend in unemployment. Older workers, who are regarded as one 
of the most vulnerable groups, are entitled to ‘priority treatment’ by the public employment 
service to foster their activation. The evaluation of the active employment policy measures is 
not available yet. The NRP underlines the need to adapt workplaces, however it lacks specific 
measures  going  beyond  changed  severance  pays  and  periods  of  notice.  The  policy  agenda 
therefore appears incomplete and — where specific plans exist — insufficiently ambitious in 
terms of coverage. 

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Slovenia was recommended to reduce asymmetries between the protection given to workers 
on permanent and temporary contracts and to tackle misuse of ‘student work’.12 Negotiations 
with social partners on the Labour Relationship Act started in 2011 but no agreement has been 
reached or amendments adopted. The NRP restates the need for structural reforms increasing 
flexicurity and addressing segmentation. It indicates some measures, including the revision of 
severance pay with a possible establishment of a special purpose fund and changes to periods 
of notice, but provides no timetable for their adoption. The recently adopted Act on Balancing 
Public  Finances  raises  charges  (concession  fees)  for  student  work  by  around  two  thirds  to 
25 % to reduce the attractiveness of this labour market status but no additional measures are 
currently  envisaged.  These  measures  have  some  relevance,  but  overall  they  cannot  be 
regarded  as  an  adequate  response  to  the  recommendation.  In particular,  they  do  not  address 
the high procedural barriers to dismissals.  

Slovenia  was  also  recommended  to  forecast  labour  market  needs  in  terms  of  skills  and 
competences  and  to  evaluate  the  effectiveness  of  the  public  employment  service.  The 
education  and  training  system  remains  insufficiently  responsive  to  labour  market  needs, 
although  career  guidance  services  are  currently  being  introduced  in  the  whole  cycle  of 
education  and  beyond  and  efforts  are  being  made  to  provide  information  on  future 
professional careers. No concrete steps have been taken to set up a system to forecast labour 
market  demand.  Some  projects  co-financed  by  the  European  Social  Fund  were  launched  to 
promote  professions  in  high  demand  in  the  labour  market.  These  measures  are  relevant  but 
taken  together  are  inadequate  as  a  response  to  the  recommendation.  The  second  part  of  the 
recommendation  has  not  been  addressed  as  the  external  expert  evaluation  of  the  overall 
effectiveness  of  the  public  employment  service  in  Slovenia  is  not  yet  finalised.  The  NRP 
announces  that  the  public  employment  service  will  focus  more  on  tailor-made  services  to 
employers and employees. 

The current tertiary attainment rate in Slovenia is above the EU average and is set to improve 
further as overall entry rates into tertiary education are relatively high. However, the relatively 
slow throughput and drop-out rates of university students clearly indicate inefficiencies. There 
is still no new Higher Education Act to operationalise the participation and completion rates 
planned  in  the  National  Higher  Education  Programme  2011-2020  adopted  in  2011.  In 
vocational  education  and  training,  enrolment  is  in  decline.  The  NRP  identifies  the  main 
challenges to make programmes more attractive, with a focus on intensified co-operation with 
employers to define curricula and provide apprenticeships. While the policy intentions in this 
area seem relevant, overall it is premature to assess them fully. 

Slovenia is one of the top performers in the EU with regard to tackling early school leaving. A 
comprehensive strategy to combat early school leaving, based on an analysis of the rate and 
drivers,  is  set  to  be  adopted  before  the  end  of  2012,  so  it  is  too  soon  to  assess  the  policy 
intentions in this area. 

The Annual Growth Survey 2012 prioritises the need to protect the vulnerable by improving 
the  effectiveness  of  social  protection  systems  and  ensuring  that  social  automatic  stabilisers 
play their role. The share of the population in Slovenia at risk of poverty or social exclusion 
(18.3 %  in  2010,  1.2  pps.  higher  than  in  2007)  remains  low  compared  to  the  EU  average 
(23.5 %). 

12  As  in  the  case  of  pension  reform,  some  aspects  of  labour  market  protection  were  subject  to  a  12-month 

legislative moratorium following the rejection of the Mini Jobs Act in a referendum last April. 

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In  January  2012,  a  social  reform  (amendments  to  the  Social  Benefits  Act  and  Exercise  of 
Rights  of  Public  Funds  Act)  came  into  effect.  The  new  legislation  introduces  substantial 
systemic  changes  to  means-tested  cash  benefits  with  the  aim  of  providing  adequate  income 
support, stimulating work and achieving a more efficient management and use of public funds 
by  better  regulating  social  and  family  benefits.  Key  features  are  the  ‘single  entry  point’  at 
Centres for Social Work and increased targeting of social transfers on the basis of income and 
property.  A  preliminary  analysis  by  Slovenia’s  research  institute  IMAD  suggests  these 
measures will decrease inequality by raising income at the bottom of the income distribution, 
although  the  at-risk-of  poverty  rate  for  children  may  increase.  However,  it  is  too  early  to 
assess  the  impact  of  this  reform.  The  NRP  and  SP  announce  an  increase  in  the  number  of 
means-tested benefits and cuts in certain social rights to underpin the consolidation of public 
finances. 

3.4. Growth and competitiveness structural measures 

The  past  year  has  seen  very  little  progress  on  structural  measures  for  growth  and 
competitiveness, and consequently the structural aspects of Slovenia’s competitiveness have 
changed  very  little.  The  structural  aspects  of  the  business  and  competition  environment  in 
Slovenia  still  hold  back  foreign  direct  investment.  Business  prospects  are  held  back  by  the 
limitations  of  transport  and  energy  infrastructure,  while  progress  on  environmental 
sustainability  and  the  EU  2020  targets  remains  patchy.  Planned  improvements  in  R&D  and 
education  await  implementation.  Meanwhile,  the  business  environment  has  worsened 
significantly,  with  viable  firms  —  especially  small  and  medium-sized  enterprises  —  facing 
subdued  demand  and  tightened  borrowing  conditions.  However,  financial  instruments  from 
the  Slovenian  Enterprise  Fund  and  SID  Bank  have  helped  to  provide  public  guarantees  and 
venture  capital  to  innovative  firms  and  small  and  medium-sized  enterprises  even  in  the 
absence of an industrial policy. There may be scope to further incentivise equity investments, 
for  which  only  locally  established  funds  benefit  from  tax  breaks.  Overall,  however,  the 
approach  to  attracting  investment  outlined  in  the  NRP  still  seems  to  rely  on  financial 
incentives and promotion rather than on making improvements to the business environment. 

Internal market and competition environment 

Concerning  services,  past  delays  in  implementing  the  Services  Directive  are  to  some  extent 
reduced by new legislation regulating construction, services for installations and equipment, 
real estate and land surveying. As regards requirements where the Directive left a margin of 
appreciation to Member States to streamline the regulatory environment for the establishment 
of  service  providers,  some  measures  have  been  identified  which  may  raise  questions  of 
compatibility  with  the  Directive,  mainly  concerning  the  legal  form  requirement,  capital 
ownership and fixed tariffs for lawyers. Also, it seems that for any service where the sector-
specific legislation does not explicitly provide for cross-border service provision, the sector-
specific legislation applicable to established providers also applies to cross-border providers. 
This  raises  concerns,  including  for  construction,  tourism,  industrial  property  representatives 
and  crafts.  The  point  of  single  contact  cannot  yet  be  considered  as  fully  functioning.  It  is 
based  on  the  e-government  e-VEM  (Vse  na  Enem  Mestu  –  One  Stop  Shop)  portal  for  the 
online  registration  of  businesses  but  currently  provides  only  partial  information  to  service 
providers,  and  places  restrictions  on  some  users.  The  Commission  will  monitor  the 
development  of  the  upgraded  portal  that  should  provide  complete  information,  for  both 
domestic and foreign service providers, in Slovenian and English.  

EN 

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Although  developments  in  recent  years  may  have  put  pressure  on  mark-ups  in  previously 
highlighted  industries  such  as  construction  and  food  retail,  there  are  still  many  markets 
marked by an absence of competition. This is particularly evident in network industries. For 
instance,  there  are  no  foreign  operators  in  the  retail  and  wholesale  energy  markets 
(infringement proceedings have been opened in relation to the Third Energy Package13) and 
switching  of  suppliers  in  2010  was  as  low  as  2 %  (electricity)  and  0.2 %  (gas).  Regarding 
transport  networks,  the  railway  market  still  appears  to  be  a  closed  shop.  There  is  no 
significant competition in either the freight or the passenger sectors, probably due to the lack 
of separation between infrastructure and transport operators. Public service contracts are still 
awarded via direct negotiations. It is disappointing that the NRP provides no information on 
action taken and planned measures to invigorate competition in these industries. 

Research and innovation 

Slovenia  regards  research  and  development  as  a  priority  for  enhancing  long-term  growth 
prospects and research and development intensity continues to exceed the EU average, due to 
slightly above-average expenditure by both businesses and the public sector. Structural funds 
are an important source of funding for research and innovation. The measures outlined in the 
2011  Research  and  Innovation  Strategy  and  the  above-mentioned  National  Programme  for 
Higher Education are yet to materialise, pending further roadmaps. The EU 2020 research and 
development  intensity  target  of  3 %  seems  achievable  so  the  main  challenges  remain  the 
effective  and  efficient  deployment  of  available  resources  (including  from  the  European 
Regional  Development  Fund),  the  structure  of  policies  to  provide  support  to  research  and 
especially  to  stimulate  innovation,  enhanced  cooperation  with  the  business  sector  and  focus 
on  strategic  industrial  sectors,  and  investment  to  support  key  enabling  technologies.  Tax 
allowances  for  research  and  development  were  increased  in  April  2012.  The  NRP  indicates 
the government will steer research and development towards enhancing the economy’s non-
price competitiveness (trademarks and patents). 

Environment and climate issues, including infrastructure 

Slovenia’s  energy  infrastructure  leaves  room  for  improvement.  Slovenia  is  growing  in 
importance  as  a  transit  country  for  electricity  flows  and  the  national  transmission  grid  is 
starting to become a bottleneck that hampers regional integration. This applies to both internal 
connections  and  international  connections,  to  Italy  and  on  the  north-south  axis.  No  legal 
framework is in place yet to roll out smart metering. There is potential for upgrading the gas 
infrastructure,  which  would  help  Slovenia  shift  to  relatively  less  carbon-intensive  sources, 
including  implementation  of  the  Recovery  fund  project  to  enhance  cross-border  gas 
transmission in Europe.  

Slovenia’s  geographic  location  represents  an  opportunity  and  a  challenge  as  regards  the 
country’s transport infrastructure for reasons of both trade and environmental impact. Gaps in 
railway  infrastructure  (linked  to  delays  in  Cohesion  Policy  investments  and  insufficient 
administrative capacity) and the still low quality of the network hold back business potential. 
By contrast, motorway density is high compared to the EU average and the large volume of 
traffic transiting through the country contributes to the high energy and carbon intensity of the 
country’s  transportation  sector.  On  motorways  and  the  Ljubljana  ring  road,  smaller  private 

13   The process of adopting legislation to complete the internal energy market, in particular transposition of the 
Third Energy Package, is being delayed. In January 2012 a new Energy Act was passed, but so far Slovenia 
has not yet notified full implementation of the package and therefore two infringement procedures are still 
open: case 2011/1126 (gas) and case 2011/1125 (electricity). 

EN 

   EN 

 
 
                                                 
vehicles require a tax disc and freight vehicles pay tolls (revenues in 2010 were around 0.8 % 
of GDP). 

Slovenia  has  committed  to  limiting  the  increase  in  greenhouse  gas  emissions  in  sectors  not 
covered  by  the  Emission  Trading  System  to  4 %  (compared  to  2005)  by  2020.  By  2010, 
greenhouse gas emissions were reduced by 2 %, mostly due to decreasing levels of liquid fuel 
consumption  (as  a  result  of  a  decrease  in  foreign  trade,  a  slow  recovery  after  2009  and  the 
high  price  of  oil)  according  to  the  NRP.  Based  on  existing  measures  Slovenia  expects 
greenhouse  gas  emissions  to  rise  by  17 %  (compared  to  2005)  by  2020  but  full 
implementation of currently planned measures could achieve a 6 % reduction. Most of these 
measures  relate  to  the  transport  and  building  sectors.  While  some  positive  steps  are  being 
taken in the buildings sector, Slovenia will only achieve the target if emissions from transport 
in particular are tackled effectively. GHG emissions  from transport accounted for  27.6 % of 
Slovenia’s total emissions in 2009, the third highest share in the EU. In addition, the share of 
renewable  energy  sources  in  transport  was  1.9 %  in  2009,  against  a  target  of  10 %  in  2020. 
Progress to date has been limited as there is no evidence yet of a substantial modal shift, while 
distortions generated by differential taxation across fuel types remain in place.  

Regarding  energy  efficiency,  the  Eco  Fund  (and  structural  funds)  will  continue  to  provide 
capital to support investors in the public and private sectors, as well as households, to promote 
efficient  energy  use.  Further  measures  were  reported  in  2011,  such  as  those  aimed  at 
accelerating  the  renovation  of  public-sector  buildings.  Slovenia  has  not  set  any  quantitative 
energy efficiency targets for 2020 so its contribution to the overall EU 2020 target for energy 
efficiency is unclear. 

The share of renewable energy in gross final energy consumption reached 16.9 % in 2009 and 
an estimated 19.9 % in 2010, compared to the EU 2020 target of 25 % by 2020. The Directive 
on promotion of the use of energy from renewable sources has only partially been transposed. 
Reaching the 2020 target may be difficult as investment in renewable energy sources may be 
crowded-out  by  large-scale  non-renewable  energy  projects,  such  as  recent  plans  for  a  new 
coal-fired power plant. 

Slovenia  faces  challenges  on  waste  policy.  The  level  of  landfilling  is  still  relatively  high 
(58 %) but, with a recycling rate of 39 %, Slovenia is making progress towards its recycling 
target  of  50 %  by  2020.  Cohesion  Policy  funds  could  be  tapped  to  help  build  recycling 
infrastructure. Producer responsibility applies to only a few waste streams and it is not clear 
whether  it  covers  the  full  cost  of  separate  collection  and  recycling.  Financial  incentives  to 
foster  prevention  and  participation  in  separate  collection  are  in  place  only  in  limited  zones 
(‘pay as you throw’ schemes). Full implementation of legislation in the field of waste policy 
and progress towards the objectives of the Roadmap on resource efficiency could contribute 
substantially to reducing greenhouse gas emissions. 

3.5. Modernisation of public administration 

to  streamline  regulated  professions  and 

Slovenia  was  recommended 
the 
administrative  capacity  of  the  Competition  Protection  Office  (CPO)  and  to  streamline 
regulated  professions  in  order  to  improve  the  business  environment  and  attract  investment. 
Despite legislative changes in April 2011 to transform the CPO into an independent agency 
that  was  supposed  to  become  operative  as  of  1  January  2012,  the  CPO  is  not  yet  an 
independent  agency  as  a  November  2011  amendment  stipulates  that  several  procedural 
conditions  have  to  be  fulfilled  first.  Moreover,  in  2011,  the  CPO’s  resources  were  reduced. 

improve 

EN 

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These  developments  affect  its  ability  to  expand  enforcement  action  and  to  lend  institutional 
weight  to  competition-boosting  reform.14  In  2011,  a  screening  of  entry  requirements  was 
announced  for  Slovenia’s  numerous  regulated  professions.  Work  is  still  ongoing  and  no 
concrete proposals have been put forward to date. The NRP indicates policy action in this area 
only  in  a  vague  manner15  with  line  ministries  responsible  for  preparing  regulatory  changes. 
Ideally,  these  should  reduce  unnecessary  entry  barriers  while  ensuring  consumer  protection, 
but it is too early for an assessment. Overall, there has not been adequate implementation of 
the 2011 recommendation. 

The  overall  business  environment  is  also  rife  with  legal  and  regulatory  issues  protecting 
incumbents  and  representing  barriers  to  outside  investors.  Debtor-friendly  and  sometimes 
problematic  insolvency  proceedings  can  impede  the  cleaning  of  banks’  balance  sheets  and 
coincide with high levels of payment indiscipline.16 Cumbersome spatial planning procedures 
can impede major domestic and foreign investment projects.17 The NRP announces action to 
make  spatial  planning  more  flexible,  including  quicker  decision  making  procedures  and 
improved access to building and land data.  

Slovenia  committed  in  its  2011  NRP  to  ensuring  high  standards  of  corporate  governance  in 
state-owned  enterprises,  a  challenge  that  was  identified  in  the  2011  European  Semester  and 
that has been repeatedly highlighted by the OECD. This was supposed to be achieved through 
arms-length  management  by  the  Capital  Assets  Management  Agency  (AUKN)  and  by 
adopting a more strategic approach to the state’s shareholdings. However, policy actions have 
if  anything  pursued  rather  different,  more  interventionist,  objectives.  The  AUKN  was 
involved in orchestrating the participation of state-owned companies in the recapitalisation of 
state-owned  bank  NKBM  and  there  was  repeated  interference  in  the  banks’  attempts  to  sell 
seized  shares  to  foreign  bidders.  The  AUKN  eventually  published  a  strategy  that  made  no 
recommendations  for  strategic  divestment  and  the  Ministry  of  Finance  has  now  taken  back 
several of the agency’s competences, including the drafting of a new strategy.  

The  government  intends  to  sell  assets  identified  as  non-strategic  while  retaining  a  stake  of 
25 % plus one share in strategic assets. State-owned enterprises continued to weigh on public 
finances,  above  all  with  recapitalisations  of  the  state-owned  railways  and  airline.  Corporate 
governance  failings  extend  beyond  the  state  sector,  narrowly  defined,  as  evidenced  by  the 
insolvency  of  the  three  biggest  construction  companies  following  the  scheduled  end  of  the 
highways  building  programme,  and  as  seen  in  the  over-indebtedness  and  poor  payment 
discipline of firms more generally. Thus, there has been no effective implementation in this 
area and the policy agenda clearly fails to address this deficit. 

There have been some policy developments that do not concern state-owned enterprises. Tax 
administration  has  been  modernised,  as  mentioned  above,  with  the  introduction  of  e-
government  features  such  as  online  tax  declarations  and  a  new  tax  payment  regime.  The 
savings  identification  phase  of  the  ‘minus  25 %  administrative  burden’  programme  has  now 
concluded and in the next phase measures to ease administrative burdens on businesses and 
citizens will be prepared. The legislation governing public procurement has been streamlined 

14 Notwithstanding currently subdued demand and prices, the role of the CPO is crucial given state involvement 
in the economy and the history of high mark-ups and high concentration in certain segments of the services 
sector (notably food retailing, construction, professional services and land transport, see also above). 

15  A  study  on  ‘Deregulation  of  professions  in  the  Republic  of  Slovenia  —  between  the  public  interest  and 

competitiveness’ was completed at the end of March. 
16 Payment discipline has not improved, despite legal changes. 
17 This can also hinder absorption of Structural and Cohesion Policy funds. 

EN 

   EN 

 
 
                                                 
and  made  potentially  more  friendly  for  small  and  medium-sized  enterprises.  However, 
problems  remain  in  public  procurement  implementation,  notably  as  regards  payment 
discipline  and  staff  skills.  A  public  procurement  agency  was  established  in  2011  to 
professionalise and harmonise procurement, but it is now due to be abolished and integrated 
into the Ministry of Finance.18 

18   The  available  statistical  information  suggests  that  Slovenia’s  public  procurement  market  above  EU 
thresholds  is  less  competitive  than  in  most  Member  States.  Policy  monitoring  capacities  and  control 
functions  of  the  public  procurement  administration  may  not  be  strong  as  Slovenia  has  not  submitted  a 
statistical report on public procurement to the Commission since 2008. 

EN 

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4. OVERVIEW TABLE 

2011 commitments 
Country-specific recommendations (CSRs) 
CSR 1: Achieve the 2011 deficit target, underpin the 2012 deficit 
target  with  concrete  measures  and  implement  the  necessary 
consolidation  rigorously,  standing  ready  to  adopt  additional 
measures  to  prevent  possible  slippages.  Underpin  this  required 
adjustment  process  over  the  programme  period  with  additional 
measures  to  ensure  the  average  annual  fiscal  effort  in  line  with 
the  Council  recommendations  under  the  EDP  and  adequate 
progress  towards  an  appropriate  medium-term  objective.  To  this 
purpose,  use  structural  measures  to  contain  expenditure  and 
address  identified  inefficiencies  and  implement  a  more  binding 
medium-term  budgetary  framework.  Accelerate  the  reduction  of 
the  deficit  if  economic  or  budgetary  conditions  turn  out  better 
than currently expected. 

CSR  2:  Take  the  required  steps  to  ensure  the  long-term 
sustainability  of  the  pension  system,  while  preserving  the 
adequacy  of  pensions.  Increase  the  employment  rate  of  older 
workers through later retirement, and by further developing active 
labour market policies and lifelong learning measures. 
CSR  3:  Take  further  measures  in  the  banking  sector,  where 
appropriate,  to  strengthen  the  balance  sheets  and  the  loan 
portfolio, with a view of enhancing the flow of credit to the real 
economy. 

CSR 4: Take steps, in consultation with the social partners and in 
accordance  with  national  practices,  to  reduce  asymmetries  in 
rights and obligations guaranteed under permanent and temporary 
contracts.  Renew  efforts  to  tackle  the  parallel  labour  market 
resulting from ‘student work’. 

CSR  5:  Set  up  a  system  to  forecast  skills  and  competencies 
needed  to  achieve  a  responsive  labour  market.  Evaluate  the 
effectiveness of the public employment service, notably on career 
guidance  and  counselling  services,  to  improve  the  matching  of 
skills with labour market needs. 

CSR  6:  Streamline  regulated  professions  and  improve  the 
administrative  capacity  of  the  Competition  Protection  Office,  in 
order to enhance the business environment and attract investment. 

Euro Plus Pact (national commitments and progress) 

Improvements  to  the  medium-term  fiscal  framework,  including 
public debt limit at 45 % of GDP, balanced budgetary position by 
2016 and adoption of amended Public Finance Act. 
Target  ULC  growth  lower  than  in  main  trading  partners;  and 
extend public sector wage restraint to the end of 2012. 
Various  targets  for  2012  reprised  from  the  2011  NRP  regarding 
R&D, FDI and the business environment.  
Europe 2020 (national targets and progress) 
Employment rate target (in %): 75 %  

Summary assessment 

Slovenia  has  implemented  the  CSR 
partially.  Although 
the  2011  deficit 
target was not achieved, the 2012 deficit 
target  was    underpinned  with  concrete 
measures  and  some,  mainly  temporary 
measures  for  the  period  beyond  were 
also  spelled  out.  An  additional  effort 
may  be  needed  in  2013  to  ensure  an 
average  annual  fiscal  effort  in  line  with 
the  EDP  recommendation.  There  are 
risks  to  the  appropriateness  of  the  pace 
of adjustment towards the MTO and the 
itself  cannot  be  regarded  as 
MTO 
appropriate. The part on a more binding 
framework was not implemented. 
Slovenia has not implemented the CSR: no 
structural  action  was  taken  on  long-term 
sustainability,  and 
the  policy  agenda 
regarding older workers is incomplete. 

to 

increase 

Slovenia  has  not  implemented  the  CSR,: 
the  measures  introduced  are  unlikely  to 
help and the policy agenda lacks ambition 
when  compared  with  the  scale  of  the 
challenge. 
Slovenia  has  not  implemented  the  CSR. 
However  significantly  higher  charges 
(concession  fees)  for  ’student  work’  were 
introduced  and  the  NRP  announces  some 
measures 
flexicurity  and 
address segmentation. 
Slovenia  has  not  implemented  the  CSR 
and  the  education  and  training  system 
remains insufficiently responsive to labour 
market needs. The expert evaluation of the 
effectiveness  of  the  public  employment 
service is not yet finalised. 
Slovenia has not implemented the CSR. A 
study  was  completed  in  March  2012  on 
the  regulation  of  professions  (no  concrete 
proposals for reform yet). An independent 
CPO has not yet been effectively created. 

The commitment was not implemented. 

Target  not  met  but  public  sector  wage 
restraint strengthened and prolonged. 
Cannot  be  assessed  before  the  end  of 
2012. 

As  the  employment  rate  fell  from  71.9 % 
in 2009 to 70.3 % in 2010, no progress has 
been made towards achieving the target. 

EN 

   EN 

 
 
 
R&D target (in % of GDP): 3 % 

GHG emissions target: + 4 % (compared to 2005, ETS emissions 
are not covered by this national target) 

Renewable energy target: 25 % 

Energy  efficiency  —  reduction  in  primary  energy  consumption 
by 2020 in Mtoe: - 

Early school leaving target (in %): 5 % 

Tertiary education target (in %): 40 % 

Target  for  reducing  the  population  at  risk  of  poverty  or  social 
exclusion (in number of persons): 40 000 

The 

energy 

Spending on R&D rose significantly from 
1.86 % of GDP in 2009 to 2.11 % in 2010, 
so  clear  progress  is  being  made  towards 
the EU 2020 target. 
Change  in  GHG  emissions  between  2005 
and  2010:  -2 %  (this  data  corresponds  to 
the current ETS scope). 
The  share  of  renewable  energy  in  gross 
final  energy  consumption 
rose  only 
marginally  between  2005  and  2009,  from 
16 %  to  16.9 %,  and  is  estimated  by  the 
authorities  to  reach  19.8 %  in  2010.  The 
estimate  for  2010  would 
that 
imply 
Slovenia  has  achieved 
its  2011/2012 
interim target.  
The  Slovenian  authorities  have  not  yet 
specified  the  national  target  for  energy 
efficiency. 
efficiency 
objectives  are  set  according  to  national 
circumstances  and  national  formulations. 
As  the  methodology  to  express  the  2020 
energy  consumption 
these 
objectives  in  the  same  format  was  agreed 
only  recently,  the  Commission  is  not  yet 
able to present this overview. 
Early  school  leaving,  measured  by  the 
percentage  of  the  population  aged  18-24 
with  at  most  lower  secondary  education 
and  not  in  further  education  or  training, 
fell  from  5.3 %  in  2009  to  5.0 %  in  2010. 
This means the target has been achieved. 
Tertiary 
rose 
markedly  between  2009  and  2010,  from 
31.6 %  to  34.8 %,  implying  clear  progress 
towards the target. 
The number of people at risk of poverty or 
social  exclusion,  which  is  relatively  low 
rose 
compared 
markedly  between  2009  and  2010,  from 
339 000  to  366 000.  This  indicates  that  no 
progress is being made towards the target. 

the  EU  average, 

educational 

impact  of 

attainment 

to 

EN 

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5. 

ANNEX 

Table I. Macroeconomic indicators 

1995-
1999

2000-
2004

2005-
2008

2009

2010

2011

2012

2013

-1.6
n.a
n.a
15.4
14.5

-3.8
58.1
n.a
44.0
47.9
2.6

-6.0
38.8
-0.8
44.2
50.3
1.6

-4.3
54.7
n.a
44.4
48.7
2.5

-6.4
47.6
n.a
44.5
50.9
2.0

-6.1
35.3
-0.1
43.2
49.3
1.4

-3.0
27.0
12.2
43.4
46.4
2.1

-1.2
24.6
10.1
43.0
44.1
1.3

-3.4
22.0
n.a
43.1
46.5
2.2

-3.4
-93.0
7.3
16.9
16.8

1.4
-3.2
2.1
-0.1
7.3
21.6
21.8

0.7
-4.1
1.7
-0.2
9.4
18.9
21.5

-1.4
-4.4
2.2
-2.8
9.1
18.9
20.5

3.7
0.4
6.9
3.1
6.4
24.7
24.6

-0.2
-3.2
2.1
-1.6
8.2
19.5
21.3

4.3
0.2
8.1
6.2
7.1
23.9
23.8

5.1
4.4
3.6
5.1
5.5
27.1
26.1

-8.2
-110.3
4.0
19.8
19.0

-8.0
-3.5
0.9
-10.0
5.9
23.4
21.2

Core indicators
GDP growth rate
Output gap 1
HICP (annual % change)
Domestic demand (annual % change) 2
Unemployment rate (% of labour force) 3
Gross fixed capital formation (% of GDP)
Gross national saving (% of GDP)
General government (% of GDP)
Net lending (+) or net borrowing (-)
Gross debt
Net financial assets 
Total revenue 
Total expenditure
  of which: Interest
Corporations (% of GDP)
Net lending (+) or net borrowing (-)
Net financial assets non-financial corporations
Net financial assets financial corporations
Gross capital formation
Gross operating surplus
Households and NPISH (% of GDP)
Net lending (+) or net borrowing (-)
Net financial assets
Gross wages and salaries
Net property income
Current transfers received
Gross saving
Rest of the world (% of GDP)
Net lending (+) or net borrowing (-)
Net financial assets
Net exports of goods and services
Net primary income from the rest of the world
Net capital transactions 
Tradable sector
Non-tradable sector
  of which: Building and construction sector
Real effective exchange rate (index, 2000=100)
Terms of trade in goods and services (index, 2000=100)
Market performance of exports (index, 2000=100)
Notes:
1 The output gap constitutes the gap between actual and potential gross domestic product at 2000 market prices.
2 The indicator for domestic demand includes stocks.
3  Unemployed persons are all persons who were not employed, had actively sought work and were ready to begin working immediately or within two weeks. The 
labour force is the total number of people employed and unemployed. The unemployment rate covers the age group 15-74.
Source :
Commission spring 2012 forecast

-1.2
n.a
-1.9
0.5
0.0
47.5
38.7
5.6
105.5
102.2
103.3

-0.8
37.7
0.6
-1.5
0.0
44.1
42.9
5.6
114.1
100.6
121.6

-1.3
36.5
1.4
-2.0
0.0
43.6
43.6
7.0
115.5
104.5
123.5

-1.5
5.9
-0.9
-0.4
-0.3
47.2
40.1
5.5
102.5
102.6
107.3

-4.1
21.7
-1.5
-1.7
-0.2
46.7
41.0
6.7
106.1
101.0
124.4

-0.6
n.a
1.0
-1.7
-0.3
45.4
41.9
4.5
113.6
99.2
123.7

0.0
n.a
1.4
-2.1
0.3
n.a
n.a
n.a
111.0
97.8
124.7

1.2
n.a
2.6
-2.2
0.5
n.a
n.a
n.a
108.8
98.2
125.3

-0.6
-117.7
3.4
12.6
17.8

-1.5
-123.1
4.5
13.8
17.5

4.9
67.9
45.7
1.6
21.0
10.3

5.3
74.7
44.5
1.3
19.4
10.5

3.8
n.a
46.7
1.3
20.0
8.9

5.3
78.7
46.9
1.3
20.9
9.9

6.4
n.a
47.1
1.2
22.3
9.9

6.6
82.7
47.4
1.2
21.7
10.4

5.8
n.a
47.0
1.3
22.5
9.4

5.9
n.a
45.9
1.4
22.3
9.4

-0.9
n.a
n.a
13.5
18.0

-1.6
n.a
n.a
13.5
17.3

-0.5
n.a
n.a
13.9
18.0

EN 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
Table II. Comparison of macroeconomic developments and forecasts 

Real GDP (% change)
Private consumption (% change)
Gross fixed capital formation (% change)
Exports of goods and services (% change)
Imports of goods and services (% change)
Contributions to real GDP growth:
- Final domestic demand
- Change in inventories
- Net exports
Output gap1
Employment (% change)
Unemployment rate (%)
Labour productivity (% change)
HICP inflation (%)
GDP deflator (% change)
Comp. of employees (per head, % change)
Net lending/borrowing vis-à-vis the rest of the 
world (% of GDP)

2011
COM SP
-0.2
-0.2
-0.3
-0.3
-10.7
-10.7
6.8
6.8
4.7
4.7

2012
COM SP
-0.9
-1.4
-1.2
-1.5
-1.5
-4.6
2.2
1.4
-1.6
0.4

-2.7
1.0
1.4
-3.2
-1.7
8.2
1.6
2.1
0.8
2.0
-0.6

-1.6
1.0
1.4
-3.4
-1.7
8.2
1.6
1.8
0.8
1.5
n.a.

-2.5
-0.3
1.3
-4.4
-1.7
9.1
0.3
2.2
0.3
0.5
0.0

-3.0
-1.3
2.1
-4.3
-2.2
8.8
1.4
2.0
0.9
1.6
n.a.

2013

COM
0.7
-0.4
1.2
5.1
4.1

-0.2
0.0
0.8
-4.1
-1.0
9.4
1.6
1.7
1.5
1.0
1.2

SP
1.2
0.2
4.0
5.4
4.9

0.7
0.0
0.5
-3.6
-1.2
9.3
2.4
1.8
1.4
1.9
n.a.

2014
SP
2.2
1.5
3.0
6.1
5.5

1.5
0.0
0.7
-2.1
-0.3
9.1
2.5
1.9
1.8
3.0
n.a.

2015
SP
2.2
1.5
3.0
6.1
5.5

1.5
0.0
0.7
-0.7
0.0
8.7
2.2
2.0
1.9
3.2
n.a.

Note:
1In per cent of potential GDP, with potential GDP growth according to the programme as recalculated by the Commission.

Source :
Commission spring 2012 forecasts (COM); Stability programme (SP).

EN 

   EN 

 
 
                                                                                     
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EN 

   EN 

 
 
 
Table III. Composition of the budgetary adjustment 

(% of GDP)

2011

2012

2013

2014

2015

Change: 
2011-2015

Revenue
of which:
- Taxes on production and imports
- Current taxes on income, wealth, etc.
- Social contributions
- Other (residual)
Expenditure
of which:
- Primary expenditure

of which:
Compensation of employees
Intermediate consumption
Social payments
Subsidies
Gross fixed capital formation
Other (residual)

- Interest expenditure
General government balance (GGB)
Primary balance
One-off and other temporary measures
GGB excl. one-offs
Output gap2
Cyclically adjusted balance2
Structural balance3
Change in structural balance
Structural primary balance3
Change in structural primary balance
Expenditure benchmark
Public expenditure growth4 (real)
Reference rate5,6
Lower reference rate5,7
Deviation in % of GDP 
   from applicable reference rate
Two-year average deviation in % of GDP 
   from applicable reference rate

COM
44.5

COM
44.4

14.1
8.2
15.5
6.7
50.9

49.0

12.7
6.5
20.1
1.9
3.6
4.0
2.0
-6.4
-4.5
-1.0
-5.4

-3.2

-5.0

-3.9

-2.0

14.4
7.8
15.5
6.7
48.7

46.1

12.4
6.3
20.1
1.6
3.2
2.5
2.5
-4.3
-1.7
0.0
-4.3

-4.4

-2.2

-2.2
1.7

0.3
2.3

SP
44.7

14.3
8.0
15.4
7.0
48.2

45.7

12.1
6.2
19.8
1.6
3.2
3.5
2.5
-3.5
-1.0
0.0
-3.5

-4.3

-1.6

-1.6
2.3

0.9
2.9

COM
44.0

14.4
7.7
15.1
6.8
47.9

45.2

11.9
6.2
19.9
1.6
3.2
2.5
2.6
-3.8
-1.2
0.0
-3.8

-4.1

-1.9

-1.9
0.3

0.7
0.4

SP
44.1

14.4
7.6
15.1
7.0
46.7

44.1

11.5
6.0
19.3
1.3
3.2
3.4
2.6
-2.5
0.1
0.0
-2.5

-3.6

-0.9

-0.9
0.7

1.7
0.8

SP
43.8

14.6
7.5
15.0
6.7
45.3

42.8

11.3
5.6
18.7
1.4
3.1
3.3
2.5
-1.5
1.0
0.0
-1.5

-2.1

-0.6

-0.6
0.3

1.9
0.2

SP
43.7

14.7
7.4
15.0
6.6
44.1

41.6

11.1
5.3
18.3
1.3
3.1
2.6
2.5
-0.4
2.1
0.0
-0.4

-0.7

-0.1

-0.1
0.5

2.4
0.5

-7.74

1.67

0.64
-4.27

-9.20

1.67

0.64
-4.77

-2.51

1.67

0.64
-1.47

-6.49

1.67

0.64
-3.13

-2.65

1.67

0.64
-1.34

-3.08

1.67

0.64
-1.46

n.a.

n.a.

-2.87

-3.95

-2.24

-1.40

SP
-0.8

0.6
-0.8
-0.5
-0.1
-6.8

-7.4

-1.6
-1.2
-1.8
-0.6
-0.5
-1.4
0.5
6.0
6.6
1.0
5.0

2.5

4.8

3.8

4.4

-

-

-
-

-

Notes:
1On a no-policy-change basis.
2Output gap (in % of potential GDP) and cyclically adjusted balance according to the programme as recalculated by the Commission on the basis of 
the information in the programme.
3Structural (primary) balance = cyclically adjusted (primary) balance excluding one-off and other temporary measures.
4Modified expenditure aggregate used for the expenditure benchmark, growth rates net of non-discretionary changes in unemployment benefit and of 
discretionary measures.
5The reference rates applicable to 2014 onwards will be available from mid-2012. For illustrative purposes, the current reference rates have also been 
applied to the years 2014 onwards.
6The (standard) reference rate applies starting in the year following the one in which the country reaches its MTO.
7The lower reference rate applies as long as the country is adjusting towards its MTO, including the year in which it reaches the MTO.

Source :
Stability programme (SP); Commission spring 2012 forecasts (COM); Commission calculations.

EN 

   EN 

 
 
 
 
 
 
 
 
 
Table IV. Debt dynamics 

Average 
2006-10
29.1
2.4

2011

47.6
8.8

1.7
0.3

1.4
-0.5
-0.5
0.4

4.5
1.7

2.0
0.1
-0.3
2.6

2012

2013

COM
54.7
7.1

1.7
3.1

2.5
0.7
-0.1
2.3

SP
51.9
4.3

1.0
2.5

2.5
0.4
-0.4
0.8

COM
58.1
3.3

1.2
1.5

2.6
-0.4
-0.8
0.7

SP
53.1
1.2

-0.1
1.2

2.6
-0.6
-0.7
0.1

2014
SP
52.6
-0.5

-1.0
0.5

2.5
-1.1
-0.9
0.0

2015
SP
50.9
-1.7

-2.1
0.4

2.5
-1.1
-0.9
0.0

(% of GDP)

Gross debt ratio1
Change in the ratio
Contributions 2 :

1. Primary balance
2. Snowball effect

Of which:
Interest expenditure
Growth effect
Inflation effect

3. Stock-flow adjustment

Of which:
Cash/accruals diff.
Accum. financial assets

Privatisation

Val. & residual effects

Notes:

1End of period.
2The snowball effect captures the impact of interest expenditure on accumulated debt, as well as the impact of real GDP growth 
and inflation on the debt ratio (through the denominator). The stock-flow adjustment includes differences in cash and accrual 
accounting, the accumulation of financial assets, and valuation and other residual effects. 
Source :
Stability programme (SP); Commission spring 2012 forecasts (COM); Commission calculations.

EN 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table V. Sustainability indicators 

SI

EU27

No-policy 
change 
scenario 

Stability 
programme 
scenario

No-policy 
change 
scenario 

Stability 
programme 
scenario

S2
of which:

Initial budgetary position (IBP)
Long-term change in the primary balance (LTC)
 of which:

pensions
health care and long-term care
other

S1 (required adjustment)*

Debt, % of GDP (2011)
Age-related expenditure, % of GDP (2011)
Source:  Commission, 2012 stability programme. 

7.5

0.6
6.8

4.7
1.8
0.3
2.2

5.5

-0.9
6.3

4.5
1.7
0.1
-1.4

2.9

0.7
2.3

1.1
1.5
-0.3
2.2

0.7

-1.6
2.4

1.2
1.5
-0.3
-0.1

47.6
24.2

82.8
25.8

Note:  The ‘no policy change’ scenario depicts the sustainability gap under the assumption that the budgetary position evolves      

according to the spring 2012 forecast until 2013. The ‘stability programme’ scenario depicts the sustainability gap under the     

assumption that the budgetary plans in the programme are fully implemented.     

*  The required adjustment of the primary balance until 2020 to reach a public debt of 60% of GDP by 2030.

Graph - Medium-term debt projections 

(% of GDP)

Gross debt as % of GDP - SI - Medium term debt projections

80

70

60

50

40

30

20

10

0

0
0
0
2

2
0
0
2

4
0
0
2

6
0
0
2

8
0
0
2

0
1
0
2

2
1
0
2

4
1
0
2

6
1
0
2

8
1
0
2

0
2
0
2

COM no-policy change scenario
COM + Shock ( -1p.p. in the short-term/long-term interest rate on maturing and new debt from 2014)
COM + Shock (+1p.p. in the short-term/long-term interest rate on maturing and new debt from 2014)
COM consolidation scenario (0.5% per year on SB) in order to achieve MTO
COM consolidation scenario (1% per year on SB) in order to achieve MTO
SP scenario

Source: Commission, 2012 stability programme 

EN 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
Table VI. Taxation indicators 

Total tax revenues (incl. actual compulsory social contributions, % of GDP)
Breakdown by economic function (% of GDP)1
     Consumption

              of which:

              - VAT

             - excise duties on tobacco and alcohol

             - energy

             - other (residual)

     Labour employed

     Labour non-employed

     Capital and business income

     Stocks of capital/wealth
     p.m.  Environmental taxes 2
3
VAT efficiency
     Actual VAT revenues as % of theoretical revenues at standard rate

2001

37.5

2005

38.6

2007

37.7

2008

37.2

2009

37.6

2010

38.0

13.4

13.4

13.2

13.4

14.1

14.2

8.3

0.9

2.7

1.5

8.6

1.1

2.5

1.3

8.5

1.1

2.3

1.3

8.5

1.1

2.4

1.4

8.5

1.3

3.0

1.3

8.5

1.4

3.1

1.3

20.0

19.8

18.3

18.5

18.7

18.8

0.7

2.5

0.9

3.2

0.7

3.9

0.9

3.2

0.6

4.8

0.9

3.0

0.6

4.0

0.9

3.0

0.8

3.2

0.9

3.6

0.9

3.3

0.9

3.6

64.5

66.6

69.0

67.6

62.5

62.3

Note: 
1 T ax revenues are broken down by economic function, i.e. according to whether taxes are raised on consumption, labour or capital. See European Commission (2012), 

T axation trends in the European Union, for a more detailed explanation.

2 T his category comprises taxes on energy, transport and pollution and resources included in taxes on consumption and capital.

3 T he VAT  efficiency is measured via the VAT  revenue ratio. T he VAT  revenue ratio is defined as the ratio between the actual VAT  revenue collected and the revenue 

that would theoretically be raised if VAT  was applied at the standard rate to all final consumption. A low ratio can indicate a reduction of the tax base due to large 

exemptions or the application of reduced rates to a wide range of goods and services ('policy gap') or a failure to collect all tax due to e.g. fraud ('collection gap'). See 

European Commission (2011), T ax reforms in EU Member States, European Economy 5/2011, for a more detailed explanation.

Source: Commission

EN 

   EN 

 
 
 
Table VII. Macrofinancial stability indicators 

Total assets of the banking sector (% of GDP)
Share of assets of the five largest banks (% of total assets)
Foreign ownership of banking system (% of total assets)
Financial soundness indicators:
              - non-performing loans (% of total loans) 1)
              - capital adequacy ratio (%) 1), 2)
              - return on equity (%) 1), 3)
Bank loans to the private sector (year-on-year % change)
Lending for house purchase (year-on-year % change)
Loan to deposit ratio
CB liquidity as % of liabilities
Banks' exposure to countries receiving official financial assistance  (% of GDP)4)
Private debt (% of GDP)
Gross external debt (% of GDP) 4)
            - Public
            - Private
Long term interest rates spread versus Bund (basis points)*
Credit default swap spreads for sovereign securities (5-year)*
Notes:
1) Latest available September 2011. 
2) The capital adequacy ratio is defined as total capital divided by risk weighted assets.   
3) Net income to equity ratio.
4) Latest data 2011Q3.
* M easured in basis points.
Source :

2007

2008

2009

2010

2011

125.9
59.5
28.5

1.8
11.2

16.3
33.2
37.4
144.5
0.4
…
77.3

8.9
35.1
31.4
…

131.4
59.1
30.8

1.8
11.7

8.1
17.3
23.0
162.8
2.7
…
84.5

10.6
39.6
62.2
…

151.2
59.7
29.1

2.3
11.6

3.9
2.3
16.0
159.0
4.5
…
92.3

18.1
37.9
115.3
…

149.7
59.3
…

8.2
11.3

-3.2
1.6
18.4
156.7
1.5
…
94.2

22.7
39.3
108.9
…

146.3
…
…

12.1
12.1

-2.6
-2.3
6.2
149.3
3.8
…
90.9

27.8
40.2
236.3
…

Bank for International Settlements and Eurostat (exposure to macro-financially vulnerable countries), IMF (financial soundness indicators), 
Commission (long-term interest rates), World Bank (gross external debt) and ECB (all other indicators).

EN 

   EN 

 
 
 
Table VIII. Labour market indicators 
Labour market indicators
Employment rate 
(% of population aged 20-64)
Employment growth 
(% change from previous year)
Employment rate of women 
(% of female population aged 20-64)
Employment rate of men 
(% of male population aged 20-64)
Employment rate of older workers 
(% of population aged 55-64)
Part-time employment 
(% of total employment)
Part-time employment of women  
(% of women employment)
Part-time employment of men  
(% of men employment)
Fixed term employment 
(% of employees with a fixed term contract)
Unemployment rate1 (% of labour force)
Long-term unemployment2  (% of labour force)
Youth unemployment rate 
(% of youth labour force aged 15-24)

Youth NEET3 rate (% of population aged 15-24)

Early leavers from education and training (% of 
pop. 18-24 with at most lower sec. educ. and not in 
further education or training)
Tertiary educational attainment (% of population 
30-34 having successfully completed tertiary 
education)
Labour productivity per person employed (annual 
% change )
Hours worked per person employed  (annual % 
change)
Labour productivity per hour worked (annual % 
change; constant prices)
Compensation per employee (annual % change; 
constant prices)
Nominal unit labour cost growth (annual % 
change)

2006

2007

2008

2009

2010

2011

71.5

72.4

73.0

71.9

70.3

68.4

1.3

2.5

1.1

-1.5

-1.5

-3.1

66.5

67.1

68.5

67.9

66.5

64.8

76.3

77.5

77.4

75.6

74.0

71.8

32.6

33.5

32.8

35.6

35.0

31.2

9.5

9.6

9.2

10.9

11.7

10.7

11.9

11.7

11.7

13.5

15.0

13.7

7.4

7.9

7.2

8.6

8.8

8.1

17.3

18.5

17.4

16.4

17.3

18.2

6.0

2.9

4.9

2.2

4.4

1.9

5.9

1.8

7.3

3.2

8.2

3.6

13.9

10.1

10.4

13.6

14.7

15.7

8.5

5.6

6.7

4.1

6.5

5.1

7.5

5.3

7.1

5.0

27.0

30.1

30.0

30.4

31.3

4.2

-1.7

6.1

3.2

1.1

3.4

-0.8

4.2

1.9

2.6

1.0

0.9

0.1

3.0

6.2

2.0

-6.3

0.0

-6.3

-1.1

8.7

5.6

4.0

0.3

3.7

5.4

0.3

1.4

:

:

:

1.6

-0.8

2.4

1.2

0.4

-0.4

Real unit labour cost growth (annual % change)

-1.0

-1.5

Notes:

1 According to ILO definition, age group 15-74)
2 Share of persons in the labour force who have been unemployed for at least 12 months.
3 NEET are persons that are neither in employment nor in any education or training.

Sources: 
Commission (EU Labour Force Survey and European National Accounts) 

EN 

   EN 

 
 
 
Expenditure on social protection 
benefits (% of GDP)
Sickness/Health care
Invalidity
Old age and survivors
Family/Children
Unemployment
Housing and Social exclusion n.e.c.
Total
of which:  Means tested benefits
Social inclusion indicators
Risk-of-poverty or exclusion1 (% of total 
population)
Risk-of-poverty or exclusion of children (% of 
people aged 0-17)
Risk-of-poverty or exclusion of elderly (% of 
people aged 65+)
At-risk-of-poverty rate2 (% of total population)
Value of relative poverty threshold (single 
household per year) - in PPS
Severe material deprivation3  (% of total 
population)

Share of people living in low work intensity 
households4 (% of people aged 0-59 not student)

In-work at-risk-of poverty rate (% of persons 
employed)

Notes:

2005

2006

2007

2008

2009

7.29
1.92
9.54
1.94
0.74
0.01
23.0
2.19
2006

7.12
1.88
8.45
1.90
0.61
0.02
22.7
2.02
2007

6.67
1.69
8.20
1.73
0.43
0.01
21.3
1.79
2008

7.02
1.64
8.03
1.78
0.38
0.01
21.4
1.77
2009

7.83
1.74
9.22
2.11
0.59
0.01
24.3
2.01
2010

17.1

17.1

18.5

17.1

18.3

14.3

14.7

15.3

15.1

15.2

22.5

11.6

22.4

11.5

24.4

12.3

23.3

11.3

22.8

12.7

7292

7753

8287

8646

8227

5.1

6.9

4.8

5.1

7.2

4.7

6.7

6.7

5.1

6.1

5.6

4.8

5.9

6.9

5.3

1 People at risk of poverty or social exclusion (AROPE): individuals who are at risk of poverty (AROP) and/or 
suffering from severe material deprivation (SMD) and/or living in households with zero or very low work intensity 
(LWI).

2 At-risk-of poverty rate: share of people with an equivalised disposable income below 60% of the national 
equivalised median income. 

3 Share of people who experience at least 4 out of 9 deprivations: people cannot afford to i) pay their rent or utility 
bills, ii) keep their home adequately warm, iii) face unexpected expenses, iv) eat meat, fish, or a protein equivalent 
every second day, v) enjoy a week of holiday away from home once a year, vi) have a car, vii) have a washing 
machine, viii) have a colour TV, or ix) have a telephone.

4 People living in households with very low work intensity: share of people aged 0-59 living in households where 
the adults work less than 20% of their total work-time potential during the previous 12 months.
Sources: 
For expenditure on social protection benefits ESSPROS; for social inclusion EU-SILC.

EN 

   EN 

 
 
 
Table IX. Product market indicators 

Performance indicators

Labour productivity1 total economy (annual 
growth in %)
Labour productivity1 in manufacturing (annual 
growth in %)
Labour productivity1 in electricity, gas, water 
(annual growth in %)
Labour productivity1 in the construction sector 
(annual growth in %)

2002-
2006

3.6

7.2

6.1

3.8

2007

2008

2009

2010

2011

3.5

7.0

0.8

5.2

1.0

0.5

2.8

-6.3

4.0

3.3

-8.1

15.3

n.a.

-10.8

n.a.

n.a.

-5.4

-13.9

-5.4

n.a.

Patent intensity in manufacturing2 (patents of the 
EPO divided by gross value added of the sector)

1.6

1.7

1.6

n.a.

n.a.

n.a.

Policy indicators

Enforcing contracts 3 (days)
Time to start a business3 (days)
R&D expenditure (% of GDP)
Tertiary educational attainment 
(% of 30-34 years old population)
Total public expenditure on education 
(% of GDP)

2002-
2006

n.a.

n.a.
1.4

2007

2008

2009

2010

2011

1350

1350

1290

1290

1290

60
1.4

19
1.7

6
1.9

6
2.1

24.4

31.0

30.9

31.6

34.8

5.8

5.2

5.2

n.a.

n.a.

6
n.a.

n.a.

n.a.

Product market regulation4, Overall
(Index; 0=not regulated; 6=most regulated)
Product market regulation4, Retail
(Index; 0=not regulated; 6=most regulated)
Product market regulation4, Network Industries 5
(Index; 0=not regulated; 6=most regulated)

2005

2006

2008

2009

2010

2011

n.a.

n.a.

n.a.

n.a.

1.5

0.9

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

2.7*

n.a.

n.a.

n.a.

Notes:
1Labour productivity is defined as gross value added (in constant prices) divided by the number of persons employed.

3 The methodologies, including the assumptions, for this indicator are presented in detail on the website 
http://www.doingbusiness.org/methodology. 
4 The methodologies for the product market regulation indicators are presented in detail on the website 
http://www.oecd.org/document/1/0,3746,en_2649_34323_2367297_1_1_1_1,00.html. The latest available product market 
regulation indicators refer to 2003 and 2008, except for Network Industries.
4 The methodologies of the Product market regulation indicators are presented in detail at the website 
5 Aggregate ET CR.
*figure for 2007.

Commission, World Bank - Doing Business  (for enforcing contracts and time to start a business) and OECD (for the product

Commission services, World Bank Doing Business (for enforcing contracts and time to start a business) and OECD (for the 
product market regulation indicators). 

EN 

   EN 

 
 
 
Table X. Green growth performance 

Slovenia

Green Growth performance

Macroeconomic
Energy intensity 
Carbon intensity 
Resource intensity (reciprocal of resource productivity)
Waste intensity 
Energy balance of trade 
Energy weight in HICP
Difference between change energy price and inflation 
Environmental taxes over labour taxes
Environmental taxes over total taxes

Sectoral 

Industry energy intensity 
Share of energy-intensive industries in the economy
Electricity prices for medium-sized industrial users 
Public R&D for energy 
Public R&D for the environment
Recycling rate of municipal waste
Share of GHG emissions covered by ETS
Transport energy intensity
Transport carbon intensity
Change in the ratio of passenger transport and GDP

Security of energy supply
Energy import dependency
Diversification of oil import sources 
Diversification of energy mix
Share of renewable energy in energy mix

2001-
2005

0.29
0.84
1.53
n.a.
-3.5%
13
1.52
15.7%
8.6%

0.23
13.8
0.06
n.a.
n.a.
24.5%
n.a.
0.84
2.53
-2.1%

51.7%
n.a.
0.24
10.9%

2006

2007

2008

2009

2010

0.27
0.75
1.60
0.22
-5.1%
13
5.6
14.9%
7.9%

0.23
14.0
0.07
0.00%
0.01%
38.0%
43.2%
0.76
2.28
-3.7%

52.1%
0.00
0.24
10.5%

0.25
0.71
1.65
0.19
-4.8%
13
0.2
15.7%
8.0%

0.20
13.4
0.08
0.01%
0.01%
40.3%
44.0%
0.75
2.23
-1.0%

52.5%
0.00
0.24
10.0%

0.26
0.71
1.40
0.17
-6.3%
13
8
15.5%
8.1%

0.18
13.3
0.09
0.01%
0.02%
37.6%
41.6%
0.83
2.47
-1.8%

55.1%
0.00
0.26
11.0%

0.26
0.70
1.25
n.a.
-4.0%
12
-5.1
18.2%
9.5%

0.17
12.1
0.10
0.02%
0.03%
41.5%
41.7%
0.80
2.41
n.a.

49.0%
0.00
0.26
12.7%

0.26
n.a.
n.a.
n.a.
-5.1%
14
11.5
n.a.
n.a.

n.a.
n.a.
0.09
n.a.
n.a.
n.a.
n.a.

n.a.
n.a.
n.a.

n.a.
n.a.
n.a.
n.a.

kgoe / €
kg / €
kg / €
kg / €
% GDP
%
%
ratio
ratio

kgoe / € 
% GDP
€ / kWh
% GDP
% GDP
ratio
%
kgoe / €
kg / €
%

%
HHI
HHI
%

Country-specific notes: 
The year 2011 is not included in the table due to lack of data.
General explanation of the table items:
Source: Eurostat unless indicated otherwise; ECFIN explanations given below
All macro intensity indicators are expressed as a ratio of a physical quantity to GDP (in 2000 prices)
          Energy intensity: gross inland energy consumption (in kgoe) divided by GDP (in EUR)
          Carbon intensity: Greenhouse gas emissions (in kg CO2 equivalents) divided by GDP (in EUR)
          Resource intensity: Domestic Material Consumption (in kg) divided by GDP (in EUR)
          Waste intensity: waste (in kg) divided by GDP (in EUR)
Energy balance of trade: the balance of energy exports and imports, expressed as % of GDP  
Energy weight in HICP: the share of the "energy" items in the consumption basket used in the construction of the HICP
Difference between energy price change and inflation: energy component of HICP, and total HICP inflation (annual %-change)
Environmental taxes over labour or total taxes: from DG TAXUD's database "Taxation trends in the European Union"
Industry energy intensity: final energy consumption of industry (in kgoe) divided by gross value added of industry (in EUR) 
Share of energy-intensive industries in the economy: share of gross value added of the energy-intensive industries in GDP
Recycling rate of municipal waste: ratio of municipal waste recycled over total municipal waste
Public R&D for energy or for the environment: government spending on R&D (GBAORD) for these categories as % of GDP
Share of GHG emissions covered by ETS: based on greenhouse gas emissions as reported by Member States to EEA (excl LULUCF)
Transport energy intensity: final energy consumption of transport (in kgoe) divided by gross value added of industry (in EUR) 
Transport carbon intensity:  greenhouse gas emissions in transport divided by gross value added of the transport sector
Passenger transport growth : measured in %-change in passenger kilometres
Energy import dependency: net energy imports divided by gross inland energy consumption incl. of international bunkers
Diversification of oil import sources: Herfindahl index (HHI), calculated as the sum of the squared market shares of countries of origin 

Diversification of the energy mix: Herfindahl Index over natural gas, total petrol products, nuclear heat, renewable energies and solid fuels

Share of renewable energy in energy mix: percentage-share in  gross inland energy consumption, expressed in tonne oil equivalents

EN 

   EN