Recommendation for a COUNCIL DECISION abrogating Decision 2010/289/EU on the existence of an excessive deficit in Slovenia
Date: 2016-05-18
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: Slovenia, budget deficit, budgetary equilibrium, gross domestic product, public debt, stability programme

   EUROPEAN COMMISSION  Brussels, 18.5.2016  COM(2016) 296 final   Recommendation for a COUNCIL DECISION abrogating Decision 2010/289/EU on the existence of an excessive deficit in Slovenia  
 
 
Recommendation for a 

COUNCIL DECISION 

abrogating Decision 2010/289/EU on the existence of an excessive deficit in Slovenia 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 126(12) thereof, 

Having regard to the recommendation from the Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

(5) 

1 

On 2 December 2009, following a recommendation from the Commission, the Council 
decided, by Decision 2010/289/EU1, in accordance with Article 126(6) of the Treaty, 
that  an  excessive  deficit  existed  in  Slovenia.  The  Council  noted  that  the  general 
government  deficit  planned  for  2009  was  5.9%  thus  above  the  3%  of  GDP  Treaty 
reference  value.  The  general  government  gross  debt  was  planned  to  reach  34.2%  of 
GDP in 2009, thus below the 60%-of-GDP Treaty reference value. 

On the same date, in accordance with Article 126(7) of the Treaty and Article 3(4) of 
Council Regulation (EC) No 1467/97, the Council, based on a recommendation from 
the Commission, addressed a recommendation to Slovenia with a view to bringing the 
excessive  deficit  situation  to  an  end  by  2013  at  the  latest.  That  Council 
recommendation was made public. 

On 21 June  2013, the Council considered that Slovenia had taken effective action in 
compliance with Council Recommendation of 2 December 2009 under Article 126(7) 
of the Treaty, but that unexpected adverse economic events with major unfavourable 
consequences for government finances had occurred after the adoption of the original 
recommendation.  Therefore,  the  Council,  following  a  recommendation  from  the 
Commission,  considered  that  the  conditions  envisaged  in  Article  3(5)  of  Regulation 
(EC) No 1467/97 were fulfilled and issued a new recommendation to Slovenia under 
Article 126(7) of the Treaty, with a view to bringing the excessive deficit situation to 
an end by 2015. That new Council recommendation was made public.  

On 5 March 2014, in accordance with Article 11(2) of Regulation (EU) No 473/2013, 
in view of the risks to the achievement of a durable correction of the excessive deficit 
by  2015,  the  Commission  addressed  a  recommendation  to  Slovenia,  with  a  view  to 
taking 
the  Council 
recommendation of 21 June 2013, notably by meeting the fiscal effort recommended by 
the Council. 

full  compliance  with 

the  necessary  action 

to  ensure 

In  accordance  with  Article  4  of  the  Protocol  on  the  excessive  deficit  procedure 
annexed to the Treaties, the Commission provides the data for the implementation of 
the procedure. As part of the application of this Protocol, Member States are to notify 

Council Decision 2010/289/EU of 2 December 2009 on the existence of an excessive deficit in Slovenia 
(OJ L 125, 21.5.2010, p. 46). 

 
 
 
 
                                                 
(6) 

(7) 

data  on  government  deficits  and  debt  and  other  associated  variables  twice  a  year, 
namely before 1 April and before 1 October, in accordance with Article 3 of Council 
Regulation (EC) No 479/20092.  

The  Council  should  take  a  decision  to  abrogate  a  decision  on  the  existence  of  an 
excessive deficit on the basis of notified data. Moreover, a decision on the existence of 
an excessive deficit should be abrogated only if the Commission forecasts indicate that 
the deficit will not exceed the 3% of GDP threshold over the forecast horizon3. 

Based on data provided by the Commission (Eurostat) in accordance with Article  14 
of Regulation (EC)  No  479/2009,  following the April  2016 notification by Slovenia, 
the 2016 Stability Programme and the Commission 2016 spring forecast, the following 
conclusions are warranted: 

– 

– 

– 

– 

After  peaking  at  15.0%  of  GDP  in  2013,  the  general  government  deficit  was 
reduced  to  5.0%  of  GDP  in  2014  and  reached  2.9%  of  GDP  in  2015.  The 
deficit reduction in 2015 was mainly driven by the non-recurrence of one-offs 
that  affected  the  deficit  in  2014  (1.1%  of  GDP)  and  a  significant  increase  in 
current  revenues  (by  1.4%  of  GDP)  which  more  than  offset  the  increase  in 
current expenditure (by 0.2% of GDP) and gross fixed capital expenditure (by 
0.2% of GDP) that is explained by a higher absorption rate of EU funds. 

The stability programme for 2016-19, submitted by the Slovenian government 
on 28 April  2016, plans the general government  deficit  to decline to  2.2%  of 
GDP  in  2016  and  to  1.6%  of  GDP  in  2016.  The  Commission  2016  spring 
forecast projects a deficit of 2.4% of GDP in 2016 and 2.1% of GDP in 2017. 
Thus,  the  deficit  is  set  to  remain  below  the  Treaty  reference  value  of  3%  of 
GDP over the forecast horizon. 

The  structural  balance,  which  is  the  general  government  balance  adjusted  for 
the  economic  cycle  and  net  of  one-off  and  other  temporary  measures, 
deteriorated by 0.7% of GDP over the period 2013-2015.  

The debt-to-GDP ratio increased to 83.2% of GDP in 2015, from 71% of GDP 
in  2013,  on  account  of  debt-increasing  stock-flow  adjustments  and  one  off 
expenditures.  The  Commission  2016  spring  forecast  projects  the  gross 
government  debt  to  have  peaked  in  2015  and  to  decrease  to  78%  of  GDP  in 
2017 due to a reduction in cash buffers.  

(8) 

As from  2016,  the year following the correction of  the excessive deficit, Slovenia is 
subject  to  the  preventive  arm  of  the  Stability  and  Growth  Pact  and  should  progress 
towards  its  medium-term  objective  at  an  appropriate  pace,  including  respecting  the 
expenditure benchmark, and comply with the debt criterion in accordance with Article 
2(1a)  of  Regulation  (EC)  No  1467/97.  In  this  context,  there  appears  to  be  a  risk  of 
some  deviation  from  the  required  adjustment  of  0.6%  of  GDP  towards  the  medium-
term objective in 2016. In 2017, under unchanged policies, there appears to be a risk 
of a significant deviation from the recommended adjustment of 0.6% of GDP towards 
the medium-term objective. Slovenia is projected to be compliant with the transitional 
debt  rule  in  2016  and  broadly  compliant  in  2017.  Overall,  further  measures  will  be 
needed in 2016 and 2017. 

2 

3 

Council  Regulation  (EC)  No  479/2009  of  25  May  2009  on  the  application  of  the  Protocol  on  the 
excessive  deficit  procedure  annexed  to  the  Treaty  establishing  the  European  Community  (OJ  L  145, 
10.6.2009, p. 1). 
In line with the Specifications on the implementation of the Stability and Growth Pact and Guidelines on the 
format and content of Stability and Convergence Programmes. 

 
 
                                                 
(9) 

In accordance with Article 126(12) of the Treaty, a Council Decision on the existence 
of  an  excessive  deficit  is  to  be  abrogated  when  the  excessive  deficit  in  the  Member 
State concerned has, in the view of the Council, been corrected. 

(10) 

In  the  view  of  the  Council,  the  excessive  deficit  in  Slovenia  has  been  corrected  and 
Decision 2010/289/EU should therefore be abrogated, 

HAS ADOPTED THIS DECISION:  

From an overall assessment it follows that the excessive deficit situation in Slovenia has been 
corrected. 

Article 1 

Decision 2010/289/EU is hereby abrogated. 

Article 2 

This Decision is addressed to the Republic of Slovenia. 

Done at Brussels, 

Article 3 

For the Council 
The President