COMMISSION STAFF WORKING DOCUMENT 2022 Country Report - Slovenia Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the 2022 National Reform Programme of Slovenia and delivering a Council opinion on the 2022 Stability Programme of Slovenia
Date: 2022-05-23
Institutions: European Commission, Secretariat-General
Subjects: Slovenia, economic policy, economic recovery, economic reform, energy policy, fiscal policy, health care system, public finance, stability pact, stability programme

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 23.5.2022  SWD(2022) 626 final  COMMISSION STAFF WORKING DOCUMENT 2022 Country Report - Slovenia Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the 2022 National Reform Programme of Slovenia and delivering a Council opinion on the 2022 Stability Programme of Slovenia {COM(2022) 626 final} - {SWD(2022) 640 final}  
 
 
Brussels, May 2022 

          SWD (2022) 

COMMISSION STAFF WORKING DOCUMENT 

Country Report Slovenia 2022 

Accompanying the document 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT,       

THE EUROPEAN COUNCIL, THE EUROPEAN CENTRAL BANK AND THE EUROGROUP 

 2022 European Semester: Assessment of progress on structural reforms, prevention and 
correction  of  macroeconomic 
Regulation EU No 117/2011. 

imbalances  and  results  of 

in-depth  reviews  under    

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ECONOMIC AND EMPLOYMENT SNAPSHOT 

(pps)  in  2022,  reaching  around  50%  of  the 
average monthly wage. 

Russia’s  war  of  aggression  against 
Ukraine and broader geopolitical tensions 
weigh  further  on  the  economic  outlook. 
Russia accounted for 2.2% of total  exports of 
goods in 2021 and the most exposed sector is 
pharmaceuticals.  The  country  also  relies  on 
Ukraine  and  Russia  for  supplies  of  energy, 
metals  and  chemical  products.  Slovenia  is 
dependent  on  Russian  gas 
it 
purchases  it  mostly  through  Austria),  but 
natural  gas  does  not  play  a  very  prominent 
role in general in the energy mix.  

(although 

is  expected  to  continue  at 
Growth 
moderate  pace  while  inflation  is  set  to 
remain high. Besides the direct impact of the 
war on external trade, there is expected to be 
a sizeable impact on growth due to the added 
uncertainty,  higher  input  prices  and  problems 
in supply chains. These are expected to weigh 
on  the  growth  of  private  investments.  In  the 
Commission’s  Spring  2022  forecast,  GDP 
growth is therefore expected to slow to 3.7 % 
in  2022  and  to  3.1  %  in  2023.  Inflation  is 
forecast  to  reach  levels  not  seen  in  recent 
decades  -  6.1  % in  2022 and  3.3  % in  2023. 
Growth is expected to be mainly driven by the 
domestic  demand,  as  private  consumption  is 
supported by the lowering of personal income 
tax  rate  and  continued  employment  growth. 
Higher  import  prices,  resulting  in  worsening 
terms  of  trade,  are  also  set  to  lower  the 
current  account  surplus.  The  unemployment 
rate 
remain  unchanged 
to 
compared to 2021, at 4.8% and to improve to 
4.6% in 2023. 

forecast 

is 

Slovenia’s economy proved 
resilient  

The  COVID-19  pandemic  disrupted  a 
period  of  strong  growth  and  improving 
labour  market  conditions  (see  Annex  12). 
Between  2014  and  2019,  the  economy  grew 
by  some  20%.  In  2020,  per  capita GDP  stood 
at 89% of the EU  average. With the outbreak 
of the pandemic in 2020 and the enforcement 
of  stringent  measures  to  combat  COVID-19, 
GDP  declined  by  4.2%.  Policy  actions  to  help 
soften the socio-economic effects of the crisis 
prevented  a  rapid  increase  in  unemployment 
and bankruptcies, minimising the impact of the 
recession.  Slovenia  adopted 
ten  support 
packages amounting to some 4.9 billion euros. 
in 
Slovenia  also 
temporary  EU  support  to  protect  jobs  and 
incomes  (SURE  programme).  This  helped  the 
economy recover quickly and grow by 8.1% in 
2021. It had already reached its pre-pandemic 
level by the third quarter of 2021.  

received  EUR 1.1 billion 

The Russian war of aggression 
against Ukraine increases 
uncertainty and darkens the 
outlook 

The economy was forecast to continue on 
a strong growth path despite facing some 
headwinds in the beginning of 2022. As in 
other countries, surging oil and gas prices have 
fuelled  inflation.  Moreover,  supply  bottlenecks 
reducing 
were 
apparent 
already 
production  capacity.  At 
time, 
unemployment  had  reached  a  very  low  level 
and job openings were at an all-time high (see 
annex  12).  The  government  also  raised  the 
minimum wage by almost 5 percentage points 

and 
the  same 

2 

 
 
Some chronic challenges still to be 
addressed 

Graph 1.1: Productivity by sector (index) 

rather 

than  on 

Lacklustre 
investment  has  held  back 
growth for years. (1) investment-to-GDP has 
remained  rather  low,  at  almost  3  pps  of  GDP 
below  the  EU  average  in  2019.  Economic 
growth  has  been  based  on  increased  labour 
force  participation  and  improved  total  factor 
productivity, 
investment. 
Slovenia  has  been  unable  to  significantly 
increase  investment  in  R&D  and  therefore 
become  a 
innovator.  Slovenia’s 
spending  on  research  and  innovation  (R&I)  is  
0.22 pps of GDP less than the EU average and 
0.5 pps of GDP less than that the five leading 
countries,  with 
the  gap  widening  over 
time. Meanwhile,  the  economy  is  still  energy- 
and  GHG  emissions-intensive  and  the  pace  of 
emission  reduction  is  slow  and  there  is  room 
in  the  country’s  digital 
for 
regards  5G 
infrastructure,  particularly  as 
connectivity and digital public services.  

improvement 

leading 

Surging  house  prices  point  to  increasing 
vulnerabilities  in  the  housing  market. 
House  prices  have  risen  rapidly  over  recent 
years,  by  an  increase  of  12.9%  in  Q3-2021 
compared to the same quarter in 2020 – well 
above  the  8.8%  in  the  euro  area.  Capacity 
shortages  and  rising  costs  are  limiting  new 
construction.  The  risk  of  overvaluation  has 
increased  and  the  housing  market  currently 
appears  to  be  overvalued  by  8.9%.  While 
household  indebtedness  is  low  compared  to 
other  countries,  the  growth  of  mortgages 
reached 9% in 2021. Rising interest rates are 
likely to exert additional burden on the balance 
sheets of households and firms.  

high 

Source: Commission's calculations based on Eurostat 
data 
Slovenia’s continued poor performance in 
attracting  foreign  direct  investment  in 
some  sectors  might  be  partially  due  to 
the 
state-owned 
enterprises  (SOEs).  On  31  December  2020, 
the  book  value  of  the  SOE  portfolio  stood  at 
EUR  9.9  billion. (2)  The  Slovenian  state 
maintains  stake  in  sectors  usually  seen  as 
tourism, 
non-strategic: 
telecommunication and insurance (3). 

share 

such 

of 

as 

Late payments became a severe problem 
during the pandemic. As in other EU Member 
States,  more 
than  40%  of  companies 
experienced problems due to late payments in 
2021. (4) However, this seems to have a more 
severe  impact  on  these  firms  since  the  share 
of firms that had to delay their payments due 
to  suppliers  or  to  revise  their  investments  or 
recruitment plans was 50% higher than the EU 
average. 

The  economy  is  on  average  more  GHG 
than 
emissions  and  energy-intensive 

(2)  Slovenia Sovereign Holdings portfolio composition: 

https://www.sdh.si/en-gb/asset-management/portfolio-
composition 

(3)  The telecom operator Telekom Slovenije and the 

insurance company Zavarovalnica Triglav which are 
partially state-owned held market shares of about 30% 
in their respective markets in 2020 

(1)  ECFIN study “Explaining the low level of investment in 

(4)  Survey on the access to finance of enterprises SAFE, 

Slovenia” (Forthcoming) 

ECB and EC 2021 

3 

 
                                                 
  
                                                 
other  EU  Member  States.  This  underlines 
that  there  are  still  opportunities  to  make 
Slovenia’s  economy  more 
resilient  and 
sustainable.  While  Slovenia  is  expected  to 
surpass  its  2030  greenhouse  gas  reduction 
target  for  non-ETS  sectors,  the  country  has 
been  among  the  worst  performing  25%  of 
Member States in terms of reducing emissions 
across  the  economy  since  1990.  At  the  same 
time, energy intensity in industry, services and 
the  residential  sector  remains  relatively  high 
and some exposure remains in coal, lignite and 
fossil  fuel-based  energy  production.  The 
energy-intensive  industry  provides  jobs  for 
4.2%  of  the  total  employed  workforce,  for 
whom  up-  and  reskilling  could  be  particularly 
important (see Annex 6). 

Reforms aim to improve 
competitiveness 

is 

implementing 

structural 
Slovenia 
reforms  to  increase  productivity  in  the 
economy.  Slovenia’s  export  market  shares 
have increased by 20.2% over 2016-2020 and 
productivity  growth  has  been  strong 
in 
manufacturing. However, convergence towards 
the  average  level  of  the  euro  area  has  not 
been  strong,  as  Slovenia’s  labour  productivity 
has remained broadly  stable compared to the 
EU  since  2005  (fluctuating  between  80-85% 
of  EU  average).  Further,  there  are  widespread 
in  productivity,  and 
regional  differences 
disparities  between  Western  and  Eastern 
Slovenia and NUTS 3 level hinder the balanced 
development  of  the  country  (see  Annex  15). 
Increasing  public  and  private  investment  in 
skills,  physical capital and digital technologies 
is  essential 
to  boost  productivity  and 
competitiveness. 

and  real  estate  agents. (5)  While  measures 
have  been  taken  to  reduce  the  administrative 
burden,  to  improve  access  to  finance  and 
speed  up  payments  to  help  firms’  liquidity, 
these efforts need to continue.  

Public finances face pressure in 
the short term 

The  significant  fiscal  stimulus  helped 
avert  a  deep  and  long  recession.  Prior  to 
the pandemic -- supported by robust economic 
growth  --  Slovenia’s  budget  had  been  in 
surplus  for  2  years  and  public  debt  had  been 
decreasing. This trend reversed in 2020 due to 
the large-scale COVID-19 support measures, a 
considerable  drop  in  GDP  and  lower  revenues 
following a previous tax reform. After the peak 
in 2020, the budget deficit and debt decreased 
to  5.2%  and  74.7%  of  GDP  respectively  in 
2021.  

The budget deficit is projected to decline 
in  the  coming  years,  but  expenditure 
remains  high.  By  2023,  the  budget  deficit 
and  public  debt  are  projected  to  decrease  to 
3.4%  and  72.7%  of  GDP,  respectively,  thanks 
to  a  strong  rebound  in  economic  activity  and 
the  phasing  out  of  temporary  COVID-19 
measures. However, not least due to a pay rise 
for health and social care workers followed by 
wage  pressure  in  other  sectors,  government 
consumption will remain high. Additional costs 
for  long-term  care  of  up  to  0.8%  of GDP  and 
lower  revenues  due  to  the  recently-approved 
personal  income  tax  cuts  by  up  to  1.3%  of 
GDP  are  expected  to  keep  the  budget  deficit 
elevated until 2025.  

Targeted  reforms  in  key  sectors  can 
strengthen the business environment and 
boost Slovenia’s competitiveness. Slovenia 
has  significantly  reduced  the  number  of 
regulated  professions,  but  this  process  has 
slowed  down 
in  recent  years:  regulatory 
restrictiveness  in  Slovenia  is  higher  than  the 
EU  average  for  professions  such  as  civil 
engineers,  architects,  lawyers,  tourist  guides 

Ageing remains a major challenge  

An  ageing  population  presents  a  serious 
challenge  to  growth  prospects.  Similar  to 
other  Member  States,  the  Slovenian  working-
age  population  is  expected  to  shrink  over  the 
the  old-age 
next  decades,  pushing  up 

(5)  SWD (2021) 185 

4 

 
                                                 
‘at 

risk  of  poverty  or  social 
indicators 
exclusion’ and ‘disability employment gap’, it is 
assessed  as  ‘good  but  to monitor’  (see  Annex 
12). 

dependency  ratio.  As  a  result  of  an  ageing 
population,  public  expenditure  on  pensions, 
health care and long-term care is projected to 
rise  by  as  much  as  8.8  pps  of  GDP  by  2070, 
the  bulk  of  which  is  expected  already  by 
2045. (6)  These ageing costs contribute to the 
fiscal  sustainability  challenges  Slovenia 
is 
expected to face in the medium and long term 
(see  Annex  19).  Although  Slovenia  managed 
the  COVID-19  pandemic  reasonably  well,  the 
crisis  highlighted  labour  shortages  and  other 
insufficiencies  in  healthcare  and  long-term 
care.  Population  ageing  will  only  aggravate 
these challenges for these sectors in the next 
years  and  decades.  However, 
is 
significant  untapped  potential  among  older 
people as only half of those aged 55 to 64 are 
employed (vs 59.6% for the EU-27; see Annex 
12). 

there 

Slovenia performs relatively well 
on the sustainability and social 
indicators 

Slovenia performs relatively well on most 
Sustainable  Development  Goals  (SDGs) 
compared 
to  other  Member  States, 
although  challenges  remain  in  a  few 
is  needed  on 
areas.  Further  progress 
sustainable  cities  and  communities 
(11); 
partnership  for  the  goals  industry,  innovation 
and infrastructure (9); climate action (13); and 
is  progressing 
(2).  Slovenia 
zero  hunger 
towards  meeting  SDG  12  on  responsible 
consumption and production, but is performing 
worse  than  the  EU  average.  Slovenia 
is 
the  EU  average 
than 
performing  better 
regarding SDG 15 on life on land but has been 
moving  away  from  meeting  the  goal  (see 
Annex 1). 

Slovenia is assessed as being at least ‘on 
average’  on  14  of  the  16  indicators  of 
the  Social  Scoreboard,  supporting  the 
European  Pillar  of  Social  Rights.  On  the 

(6)  European Commission (2021), The 2021 Ageing Report: 
Economic & Budgetary Projections for the EU Member 
States (2019-2070), Institutional Paper 148, 
(https://ec.europa.eu/info/sites/default/files/economy-
finance/ip148_en.pdf). 

5 

 
                                                 
THE RECOVERY AND RESILIENCE PLAN IS UNDERWAY 

Slovenia’s  recovery  and  resilience  plan 
(RRP) has a total budget of about EUR 2.5 
billion  (4.8% of  GDP), with  EUR  1.78  billion 
in  non-repayable  financial  support  and  EUR 
705 million in loans. This comes in addition to 
EUR  3.54  billion  in  EU  cohesion  policy  funds 
for 2021-2027 (see Annex 3). The RRP covers 
the  green  and  digital 
transition,  smart, 
sustainable  and  inclusive  growth,  healthcare 
and  welfare  (see  Annex  2  for  details  on  the 
size  and  structure  of  the  RRP).  The  RRP's 
measures  encompass  all  seven  EU  flagships 
projects. 
and 
Implementation of reforms and investments is 
expected  to  help  tackle  almost  all  challenges 
identified 
country-specific 
the 
recommendations  that  were  addressed  to 
Slovenia  in  2019  and  2020,  except  for  the 
recommendation  on  privatisation.  Slovenia 
intends  to  submit 
its  first  two  payment 
requests in 2022. 

multi-country 

four 

in 

rail 

by  upgrading 
infrastructure  and  by 
reorganising  the  public  transport  system.  This 
is  expected  to  help  reduce  the  high  GHG 
emissions  intensity, 
increase  the  emission 
reduction in Slovenia and possibly step up the 
use  of  public  transport,  currently  low  by 
international  standards.  The  RRP  intends  to 
accelerate the transition to a circular economy 
increasing  producer  responsibility  and 
by 
recycled 
integration 
promoting 
materials in new products. 

the 

of 

The  RRP  seeks to  contribute  significantly 
to the digital transformation. It focuses on 
digitalising the public sector and improving the 
availability  of  e-services. 
in 
broadband  connectivity,  cloud  capacities  and 
digital  skills  are  expected  to  help  reduce  the 
digital  divide.  The  RRP  also  includes  reforms 
on  the  cybersecurity  and  digitalisation  of 
companies  and  refers  to  the  participation  of 
Slovenia in four multi-country projects. 

Investments 

Large share of the RRP is 
dedicated to the twin transition 

The RRP includes much-needed 
structural reforms 

focus  on 
The  RRP  has  a  strong 
accelerating  the  green  transition  by 
decarbonising  the  energy  sector.  The  RRP 
includes  key  reforms  that  aim  to  address 
regulatory challenges and make the renewable 
energy  sources  network  more  integrated.  It 
also  contains  energy-efficiency  measures  in 
industry, as well as a dedicated component on 
the  energy  renovation  of  buildings.  This  is 
expected to also improve air quality, which has 
been a significant concern in Slovenia.  

RRP 

also 

tackles 

The 
climate, 
environment,  and  transport.  The  RRP 
includes  flood  prevention  measures,  as  a 
significant  share  of  Slovenia’s  population  live 
in  areas  exposed  to  floods.  The  RRP  aims  to 
make  the  transport  system  more  sustainable 

Three flagship reforms of the RRP intend 
to  address  challenges  linked  to  a  rapidly 
ageing society, as well as help implement 
the European Pillar of Social Rights. These 
ambitious reforms of pensions, healthcare and 
long-term  care  are  set  to  go  a  long  way  in 
modernising  Slovenia’s  social  welfare  system 
and addressing the challenges post-COVID.  

The  planned  pension  reform  is  expected 
to  ensure  adequate  pensions  and  ensure 
the financial sustainability of the pension 
system.  It  is  set  to  introduce  parametric 
changes  to  deal  with  key  deficiencies  of  the 
current  system,  including  by  ensuring  that 
workers remain active in the labour market for 
longer  and  adjusting  retirement  conditions 

6 

 
 
In  2023,  work  on  reforms  is  expected  to 
advance  and  major  investment  projects 
are  set  to  be  kicked  off.  The  act 
establishing  a  short-time  work  scheme  for 
severe  economic  downturns  and  a  ban  on 
using fossil fuels for heating in new buildings 
are  set  to  enter  into  force.  Contracts  for 
projects  in  many  areas  are  expected  to  be 
awarded.  These  include  investments  in  flood 
safety,  urban  wastewater  discharge  and 
treatment,  the  construction  of  clinics  for 
infectious diseases in Maribor and Ljubljana, a 
national telemedicine system and facilities for 
consultation  with 
long-term  care.  After 
employers 
draft 
trade 
amendments to the pension legislation are set 
to be submitted to the national parliament. 

unions, 

and 

(such  as  higher  retirement  age  or  indexation). 
The  RRP  includes  measures  to  increase  the 
employment  rates  of  people  with  low  skills, 
which are currently below the EU average (see 
Annex 12). This is crucial for Slovenia to reach 
the 2030 EU headline targets on employment 
and skills. 

long-term  care 

The  reforms  of  the  healthcare  and  long-
term  care  systems  are  expected  to 
improve  transparency  and  adequacy. 
Creating  a  coherent  regulatory  framework  for 
long-term  care  has  been  a  long-standing 
country-specific  recommendation.  As  part  of 
the RRP, Slovenia adopted the framework law 
on 
in  December  2021. 
However,  the  introduction  of  a  compulsory 
long-term  care  insurance,  which  should  cover 
at  least  30%  of  the  costs,  has  been  pushed 
back  to  2025.  Complemented  by  investments 
in  additional  facilities  for  long-term  care,  the 
reform  is  expected  to  lead  to  significant 
improvements for people in need of long-term 
care.  The  reform  of  the  healthcare  system  is 
expected  to  improve  its  quality,  accessibility 
and  resilience  and  transform  its  financing 
sources (see Annex 14).  

The  RRP  also  aims  to  cater  to  the  needs 
of  young  people.  It  puts  a  strong  focus  on 
attaining  competences 
(digital,  green  and 
financial literacy) at all levels of education and 
seeks  to  support  investments 
in  modern, 
digital  and  environmentally-friendly  education 
(see  Annex  13).  Investments  in  affordable 
housing  are  expected  to  reduce  the  social 
impact  of  the  crisis  on  marginalised  groups, 
especially  young  people  and  young  families, 
and  improve  their  living  conditions  in  the 
longer term.  

reforms 

implementation  of 

The 
to 
improve  the  business,  research  and 
innovation   environment  is  progressing 
steadily.  Slovenia  has  already  adopted  a 
number 
on 
‘debureaucratisation’,  promoting  investment, 
development  incentives  for  tourism,  public 
procurement, and R&I as well as an amended 
housing  act  (see  Annexes  10  and  12).  In 
addition, cross-border projects have started.  

including 

those 

acts, 

of 

7 

 
Box 2.1:  Key deliverables under the recovery and resilience plan in 2022-2023 

  Reform  the  promotion  of  renewable  energy  sources  and  address  regulatory  challenges  to 

pave the way for private investments in this area. 

  Entry into force of a new flood risk management plan and invest EUR  24.64 million in flood 

and landslide prevention. 

  Reorganise  and  improve  the  system  of  public  passenger  transport,  including  significant 

investments in rail infrastructure. 

  Adopt the 2021-2025 broadband plan and deploy the 5G network by 2023. 

  Preparation of the reform of the pension system aiming to ensure adequacy and long-term 

sustainability and consultation of social partners. 

  Set up a sustainable long-term care system to improve access to long-term care services for 

the general public.  

  Strengthen the key competences of 1300 young people and help them find work.  

  Remove  administrative  barriers  with  reforms  on  public  institutions  and  improvements  in 

public procurement. 

  Reform  the  R&I  governance  by  implementing  the  provisions  of  the  new  act  on  R&I  and 

establishing a programme committee for R&I policy coordination.   

8 

 
 
 
 
FURTHER PRIORITIES AHEAD 

Beyond  the  challenges  addressed  by  the 
RRP,  as  outlined  above,  Slovenia  faces 
additional  challenges  not  sufficiently 
covered  in  the  plan.  Some  measures  were 
introduced  recently  (see  Annex  4  on  progress 
on  country-specific  recommendations),  but 
further  action  is  needed,  especially  on  the 
sustainability  of  public  finances,  productivity 
and  the  business  environment.  Moreover, 
addressing  various  bottlenecks  in  accessing 
healthcare  and  accelerating 
the  green 
transition  will  continue  to  pose  challenges. 
Reducing regional disparities between Western 
and  Eastern  Slovenia  would  boost 
the 
country’s economic potential. Addressing these 
challenges  will  also  help  to  make  further 
sustainable 
in 
progress 
development 
to 
related 
macroeconomic  stability  and  productivity  (see 
Annex 1 on SDGs).  

achieving 
goals 

(SDG) 

the 

Fiscal sustainability faces 
substantial challenges 

The  sustainability  of  Slovenia’s  public 
finances  faces  substantial  challenges  in 
the  medium  and  long  term.  Expenditure 
related  to  ageing  as  a  share  of  GDP  is 
projected to increase by the third highest rate 
in  the  EU  as  of  2035  and  outpace  the  EU 
average  by  2045 
(see  Graph  3.1).  The 
expected  increase  in  ageing  costs  is  set  to 
accelerate  particularly  after  2030  and  it  is 
largely  driven  by  expenditure  on  pensions, 
which is estimated to reach 15.7% of GDP by 
2050  –  the  second  highest  level  in  the  EU  –, 
followed  by  expenditure  on  healthcare  and 
long-term  care.  These  projections  do  not  yet 
include the additional costs resulting from the 
newly adopted Long-Term Care Act, which are 
expected  to  put  further  pressure  on  public 
finances.  

the 

reforms 

increase 

long-term  care 
The  healthcare  and 
in  the  RRP,  while 
reforms  planned 
addressing  major  challenges,  do  not  yet 
ensure  the  sustainability  of  government 
finances  in  the  long  term.  Even  though 
public financing of the health system is below 
the  EU  average  (72.8%  in  2019  vs  79.7%  in 
the  EU),  a  sharp 
in  healthcare 
spending  is  expected,  followed  by  a  doubling 
of  long-term  care  costs  by  2055. (7)  This 
points  to  the  need  for  additional  financing. 
However, 
those  areas 
undertaken  in  recent  years  mostly  extended 
access  to  high-quality  services  and  improved 
social  inclusion  and  rights.  In  turn,  this  put 
additional  strain  on  public  finances.  The 
reforms  included  in  the  RRP  mostly  focus  on 
the quality of, access to and a stable revenue 
base for healthcare and long-term care. While 
the  latter  can  be  an  effective  tool  to  support 
fiscal sustainability in the short term, the long-
term fiscal sustainability challenges stemming 
from  ageing  such  as  increasing  needs  and 
spending in the context of a shrinking revenue-
additional 
generating 
measures.  

capacity 

require 

in 

to 

The  recent 
labour  tax  cuts  require 
the 
compensating  measures 
revenue  gap.  Notwithstanding  the  strong 
employment  growth  in  the  last  year,  it  is 
estimated  that  the  changes  to  personal 
income  tax  adopted  to  increase  after-tax 
wages,  will  gradually  reduce  tax  revenues  by 

fill 

(7)  OECD/ European Observatory on Health Systems and 
Policies (2021), Slovenia: Country Health Profile 2021, 
State of Health in the EU, OECD Publishing, 
Paris/European Observatory on Health Systems and 
Policies, Brussels, 
(https://eurohealthobservatory.who.int/publications/m/sl
ovenia-country-health-profile-2021). 

European Union (2021), 2021 Long-Term Care Report: 
Trends, Challenges and Opportunities in an Ageing 
Society. Country Profiles. Volume II, 
(https://op.europa.eu/en/publication-detail/-
/publication/b39728e3-cd83-11eb-ac72-
01aa75ed71a1). 

9 

 
 
                                                 
up  to  1.3%  of  GDP  by  2025.  No  measures 
have  been  proposed  so  far  to  cover  this  loss. 
This comes on top of the personal income tax 
cuts in 2020, which were only partly financed 
by higher taxes for companies. (8) Although the 
labour  tax  changes  are  expected  to  increase 
labour  supply  and  GDP  in  the  long  term,  they 
are unlikely to make up for the lower revenues 
any time soon. Simulations by Slovenia’s Fiscal 
Council show that the recent tax reform could 
increase  public  debt by  between  4  and  14  pp 
of GDP in the medium term. (9) 

Graph 3.1: Total ageing costs as % of GDP 

vehicles. (10)  Another  potential  source  of 
revenues  would  be  higher  recurrent  taxes  on 
immovable  property  as  their  revenues  are 
relatively  low  in  Slovenia (0.5%  of  GDP vs  an 
EU average of 1.2% of GDP). Bringing property 
values in line with market values and factoring 
in  the  energy  performance  of  buildings  could 
help  increase  growth,  reduce  inequality  and 
promote energy efficiency (see Annex 18). (11) 

The business environment needs 
further reforms 

innovative 
Fostering  competitive  and 
firms 
integrated 
that  are  globally 
remains  a  challenge  (see  Annex  8).  The 
share  of  research  personnel  in  Slovenia  is 
higher  than  in  the  EU  in  general,  yet  the 
country’s  scientific  research  performance (12) 
and 
remain 
modest. (14) As regards its overall performance 
in  digitalising  the  economy  and  society, 
Slovenia  ranked  13th  among  the  EU  Member 
States  and  still  performed  below  the  EU 
average  (see  Annex  8). (15)  Attracting  foreign 
talent 
is  one  of  the  key  challenges  for 
companies, in particular tech start-ups.  

transfer (13) 

technology 

The role of state-owned companies in key 
industries  could  be  hampering  firm  entry 
into  the  market  and  investment.  While 
Slovenia  reduced  its  holdings  in  the  financial 
sector,  it  has  recently  increased  its  level  of 
ownership  in  the  tourism  sector.  Slovenian 
state  assets  are  managed  by  Slovenia 

(10)  OECD (2019), Tax revenue implications of decarbonising 
road transport: Scenarios for Slovenia, OECD Publishing, 
Paris, (https://doi.org/10.1787/87b39a2f-en).  

(11)  European Commission (2022), Immovable Property 
Taxation for Sustainable and Inclusive Growth, 
Discussion Paper 156, 
(https://ec.europa.eu/info/publications/immovable-
property-taxation-sustainable-and-inclusive-
growths_en). 

(12)  Measured by the 10% top-cited publications. 

(13)  Measured by the number of patent application per GDP. 

(14)  Ranked 17th in the EU in 2017 and 16th in 2019 and 

15th in 2021 in the EU innovation scoreboard.  

(15)  Digital Economy and Society Index 2022. 

Source: The 2021 Ageing Report: Economic and 
Budgetary Projections for the EU Member States (2019-
2070), European Commission 

tax  mix 

in  Slovenia 

The 
offers 
considerable substantial room to increase 
revenues  (see  Annex  17).  Although  the 
country  is  doing  well  on  many  indicators 
related  to  environmental  taxation,  further 
revenue  could  still  be  generated,  e.g.  by 
limiting environmentally harmful subsidies like 
the  excise  duty 
for  commercial 
refund 
transport, indexing energy taxes or introducing 
private 
charges 
distance-based 

for 

(8)  European Commission (2020), Labour Tax Shift in 
Slovenia: Effects on Growth, Equality and Labour 
Supply, Economic Brief 57, 
(https://ec.europa.eu/info/publications/labour-tax-shift-
slovenia-effects-growth-equality-and-labour-
supply_en). 

(9)  Slovenia’s Fiscal Council (2021), Analysis of Fiscal 

Effects Arising from the Proposed Amendments to Tax 
Legislation, (https://www.fs-rs.si/analysis-of-fiscal-
effects-arising-from-the-proposed-amendments-to-
tax-legislation/). 

10 

 
 
                                                 
                                                 
Sovereign  Holdings  (SSH).  Before  the  crisis, 
SSH managed to increase the return on equity 
for  assets  under  its  management  to  almost 
7% (2019). The government continues to have 
stake in 3 publicly traded financial companies 
and  numerous  companies  providing  tourism 
and  other  services.  According  to  the  OECD’s 
assessment (16),  the government  could  narrow 
down  the  group  of  SOEs  that  are  considered 
important  or  strategic (requiring  controlling  or 
majority  government  share  holdings)  and 
divest  non-strategic  assets.  Companies  could 
then focus on their core activities. In addition, 
Slovenia should consider further strengthening 
the  SOE  governance 
  by  allowing  more  
regards  management  pay, 
flexibility  as 
and 
boards 
supervisory 
strengthening 
refraining 
politically  motivated 
from 
replacements of board members. 

Despite  government  policies  to  further 
support  equity 
financing,  companies 
continue  to  rely  heavily  on  bank  loans. 
finance  exposes 
Over-reliance  on  bank 
companies  to  financing  risks  and  might  limit 
their  potential  to  borrow  and  grow,  especially 
for 
innovative  small  and  medium-sized 
enterprises  (SMEs).  More  diversified  financing 
of  companies,  including  equity,  could  make 
companies  more  resilient.  Greater  use  of 
equity financing by businesses would also help 
institutional  and  private  investors  in  Slovenia 
diversify their portfolios. 

Slovenia still faces regulatory issues that 
the  business 
can  adversely  affect 
environment. Although, in general, regulatory 
barriers are not higher than the OECD average, 
businesses  perceive  red  tape  as  one  of  the 
most problematic  factors in  doing business in 
is  one  significant 
Slovenia.  Construction 
example  where  the 
issuance  of  permits 
remains a challenge.  

Reducing  regulatory  barriers 
in  the 
professional  services  sector  will  make 
entry  easier  and  improve    quality  and 
prices.  Regulatory  restrictiveness  in  Slovenia 
is  higher  than  in  the  EU  on  average  for  all  of 

(16)  OECD Economic Policy Reforms 2021: going for growth, 
2021: https://www.oecd.org/economy/growth/Slovenia-
country-note-going-for-growth-2021.pdf. 

and 

civil 

engineers, 

the  professions  analysed  by  the  European 
few  exceptions. (17) 
Commission,  with  a 
Slovenia  regulates  some  professions  quite 
strictly:  restricting  marketing,  allowing  only 
limited  entry  paths  and  limiting  fees.  Besides  
lawyers 
other 
professionals  like  real  estate  agents  and 
tourist  guides  face  significant  restrictions. 
Similarly,  regulatory  barriers  could  be  further 
lowered  in  some  retail  segments,  such  as 
retail sale of medicines as well as in the road-
freight 
industry 
transport  sector,  where 
representatives have a role in issuing licences, 
which  may  distort  competition  by  preventing  
new businesses from entering. 

Access to healthcare remains a 
challenge 

The healthcare sector faces challenges as 
regards  access  due  to  shortages  of 
in  particular  general 
health  workers, 
practitioners  and,  in  some  areas,  nursing 
staff.  Personnel  shortages  in  healthcare  are 
most acute in family medicine and paediatrics 
at  the  primary  level (18),  which  hampers  the 
capacity of the primary care system to act as 
an  effective  entry-point  and  coordinating 
mechanism  across  the  various  levels  of  care. 
There  are  also  staff  shortages  of  registered 
nursing  professionals  in  hospitals  and  in  the 
provision  of  long-term  care  services,  both  in 
care homes for older people and at home. The 
sector needs to be modernised, in particular to 
make  better  use  of  skills  and  to  ensure  the 
attractiveness  of  care  professions,  next  to 
other  retention  factors,  such  as  those  related 
to pay.  

Long  waiting  times  for  certain  medical 
treatments  were  exacerbated  during  the 
pandemic.  In  2019,  2.7%  of  the  population 
reported unmet needs for medical care, which 
is  above  the  EU  average.  About  a  quarter  of 

(17)  COM (2021) 385 

(18)  European Observatory on Health Systems and Policies, 
Albreht, Tit, Polin, Katherine, Brinovec, Radivoje P, Kuhar, 
Marjeta. et al. (2021). Slovenia: health system review. 
World Health Organization. Regional Office for Europe. 
https://apps.who.int/iris/handle/10665/346064. 

11 

 
                                                 
                                                 
common  interest,  especially  when  it  comes  to 
gas  infrastructure  and  interconnections  with 
neighbouring  Member  States.  Slovenia  should 
consider relying on access to LNG terminals of 
in  order  to 
neighbouring  Member  States 
diversify its gas supply. 

to 

the 

reach 

In  light  of  the  new  geopolitical  tensions 
diversification  of  the  energy  supply  with 
a  further  focus  on  renewables  and  on 
energy efficiency is more important than 
ever.  More  investments  are  needed  to  help 
expand  renewable  energy,  as  well  as  for 
network  and  energy  storage  infrastructure.  
Slovenia  has  reached  its  2020  renewable 
energy  sources  target  by  using  the  EU 
mechanism of cross-border cooperation in line 
with  Directive  2018/2001/EU 
(statistical 
transfers).  Measures  in  Slovenia’s  RRP  to 
promote renewable energy and support energy 
efficiency  are  expected  to  help  improve  its 
performance.  However,  these  might  not  be 
sufficient 
target  of  27% 
renewable  energy  sources  in  end-use  energy 
by  2030,  as  set  in  its  national  energy  and 
climate  plan.  In  light  of  the  restrictions  for 
renewable  energy  production 
constructing 
in  environmentally  protected 
installations 
areas,  proactively  pre-identifying  acceptable 
sites for their construction would facilitate site 
selection  for  project  promoters.  The  existing 
energy  storage  in  Slovenia  is  underdeveloped 
and  insufficient  to  address  the  needs  of  local 
renewables  production.  Improving  the  grid 
capacity  availability  at  the  low-voltage  grid 
level could help integrate rooftop photovoltaic 
into 
is 
the  grid.  Furthermore,  Slovenia 
participating  in  a  project  of  common  interest 
for  gas  interconnection  and  a  compressor 
station.  Future  investments  should  be  future 
proof,  where  possible, to  avoid  lock  in  effects 
in 
to  climate  neutrality.  The 
implementation of these projects is considered 
a  priority  in  view  of  the  Russian  invasion  of 
Ukraine. 

the  path 

increased 

its  efforts 
Slovenia  has 
in  the 
towards  the  green  transition 
transport 
significant 
sector 
challenges  remain.  Transport  emissions  in 
Slovenia  represent  over  two-fifths  of  the 
country’s  total  CO2  emissions.  Further  efforts 

but 

the 

treatments  are  a 

first  12  months  of 

the  population  reported  forgone  medical  care 
during 
the 
pandemic. (19)  Long  waiting  times  for  certain 
medical 
long-standing 
problem in Slovenia (see also Annex 14). Poor 
coordination  between  healthcare  systems  and 
inefficiencies  in  management  were  identified 
as  main  drivers  of  the  problem.  Long  waiting 
times, especially for publicly funded secondary 
level 
as 
orthopaedics,  cardiology),  are  driving  unmet 
medical need in Slovenia, raising concerns over 
access  to  healthcare  services  for  society  as a 
whole. 

services (20) 

specialist 

(such 

Need to ensure energy security 
and accelerate decarbonisation 
efforts 

Slovenia  has  a  diversified  energy  mix. 
Currently,  oil  has  the  highest  (31%)  share  in 
the energy mix, followed by nuclear with 23%, 
and  renewables  with  18%  (see  Annex  5).  By 
2030,  renewables,  nuclear  and  natural  gas 
would  see  an  increasing  share  in  Slovenia’s 
energy  mix,  while  the  share  of  oil  and  solids 
would  decline  considerably  compared  to  the 
current  energy  mix.  Natural  gas  accounts  for 
11.3%,  but  with  100%  of  the  natural  gas 
being  imported  from  Russia,  there  is  still  a 
high  dependency  on  Russian  gas,  which  is 
provided  overwhelmingly  by 
imports  from 
Austria.  Therefore,  Slovenia  similarly  to  some 
other Member States will also face a challenge 
in  reducing  its  gas  dependence  on  Russia. 
Although  currently  gas  is  less  important  in 
Slovenia than in the EU as a whole (apart from 
in some industries, particularly steel, paper), it 
is possible that its role would grow in the near 
future  to  substitute  solid  fuels  in  light  of  the 
announced  coal  phase-out  by  2033.  To  this 
end, 
the 
implementation  of  the  energy  projects  of 

is  a  need 

to  ensure 

there 

(19)  State of Health in the EU, Slovenia Country Health 

Profile 2021: 
https://ec.europa.eu/health/system/files/2021-
12/2021_chp_sl_english.pdf. 

(20)  See: “Analysis of Situation on 1.1., 1.6.2020 and 
1.1.2021” National Institute of Public Health of 
Slovenia, https://www.nijz.si/sl/publikacije.  

12 

 
                                                 
are needed to encourage the modal shift from 
private cars to public transport. (21)  

Despite  making  some  progress,  Slovenia 
still  faces  challenges  on  its  path  to  a 
circular  economy.  The  environmental  goods 
and  services  sector  already  provides  jobs  to 
2.8% of the employed population, compared to 
2.1% in the EU (see Annex 6). There has been 
a steady increase in circular or secondary use 
of raw material in Slovenia in recent years but 
it still remains below the EU average (12.3% in 
2020  vs  12.8%  in  the  EU,  see  Annex  7). (22) 
Also,  resource  productivity  is  still  well  below 
average. (23)  Municipal  waste 
the 
generation,  on  the  other  hand,  has  started  to 
increase  in  recent  years. (24)  These  factors 
indicate that Slovenia’s economic growth is not 
yet  decoupled  from  its  waste  generation. 
Although  the  RRP  covers  several  important 
measures 
to  circular 
economy,  further  efforts  will  be  needed  to 
achieve the 2030 targets.  

transition 

the 

for 

EU 

(21)  Transport-related weaknesses are confirmed by the 
green dimension of the resilience dashboards, in the 
area of climate change mitigation and adaptation. 

(22) Eurostat, Circular material use rate 

(23)  With EUR 1.54/kg of material consumed in 2020 

compared to the EU average of EUR 2.09/kg according 
to Eurostat, Resource productivity. 

(24)  487 kg/year/inhabitant in 2020 compared to 449 
kg/year/inhabitant in 2015 according to Eurostat, 
Municipal waste by treatment. 

13 

 
 
                                                 
services,  particularly 
services. 

for  professional 

state-owned 

  ensuring  that  a  large  presence/dominance 
of 
state-controlled 
and 
companies  in  certain  non-strategic  sectors 
does  not  undermine  market  entry  and 
competition and that these companies are 
managed  efficiently  based  on  accepted 
corporate governance standards.  

  focusing 

investment  on 

the  green 
transition  and  on  diversifying  energy 
supply,  in  particular  by  accelerating  the 
use  of  renewable  energy  sources  notably 
with  further  efforts  as  regards  simplifying 
and 
and 
administrative 
enhancing 
electricity  distribution  networks,  improving 
energy  efficiency,  but  also  by  improving  
energy  infrastructure  and  passenger  rail 
transport. 

procedures, 

permitting 

expediting 

  improving the circularity of the economy 

and eco-innovation. 

KEY FINDINGS 

Slovenia’s  recovery  and  resilience  plan 
includes measures to address a series of 
structural challenges by: 

  improving 

the 

renewable 

energy 
infrastructure  and  increasing  the  capacity 
for renewable energy sources. Incentivising 
the use of sustainable means of transport, 
improving  existing  and 
e.g. 
developing  new  infrastructure.  Investing  in 
flood  protection, 
including  nature-based 
solutions,  energy-efficient  water  systems 
and circular economy. 

through 

  removing  administrative  barriers  and 
investment. 
sector  and 

bottlenecks 
Digitalising 
developing the broadband infrastructure. 

increase 
public 

to 
the 

  reforming  the  national  healthcare,  long-

term care and pension systems. 

  promoting  the participation and integration 
of young people in the labour market. 

Beyond  the  reforms  and  investments  in 
the RRP, Slovenia would benefit from: 

  ensuring  the  sustainability  of  public 
finances in the medium and long term by 
policy, 
gradually 
primary 
constraining 
expenditure  and 
reforms 
addressing  the  long-term  sustainability  of 
the healthcare and long-term care systems. 

normalising 
increases 

implementing 

fiscal 
in 

  using  additional  revenue  sources 

to 
finance  recent 
labour  tax  cuts;  and 
rebalance  the  tax  mix  towards  green  and 
more growth-friendly taxes. 

  improving the business environment by 
implementing  measures 
to  speed  up 
payments  across  the  economy;  reducing 
the  regulatory  and  administrative  burden 
and  removing  barriers  to  competition  in 

14 

 
 
 
 
 
ANNEXES 

 
 
 
 
LIST OF ANNEXES 

Cross-cutting progress indicators 

A1.  Sustainable Development Goals 

A2.  Recovery and Resilience Plan - Implementation 

A3.  Other EU instruments for recovery and growth 

A3.  Other EU instruments for recovery and growth 

A4.  Progress in implementation of the country-specific recommendations 

Environmental sustainability 

A5.  Green Deal 

A6.  Employment and social impact of the green transition 

Productivity 

A7.  Resource efficiency and productivity 

A8.  Digital transition 

A9. 

Innovation 

A10.  Industry and the single market 

A11.  Public administration 

Fairness 

A12.  Employment, skills and social policy challenges in light of the European Pillar of Social Rights 

A13.  Education and skills 

A14.  Health and health systems 

A15.  Economic and social performance at regional level 

Macroeconomic Stability 

A16.  Key financial sector developments 

A17.  Taxation 

A18.  Key economic and financial indicators 

A19.  Debt sustainability analysis 

LIST OF TABLES 

A2.1  
A4.1: 
A5.1  
A7.1. 

Key elements of the Slovenian RRP 
Summary table on 2019,2020 and 2021 CSRs 
Indicators underpinning progress on the European Green Deal from a macroeconomic perspective 
Selected resource efficiency indicators 

17 

19 

19 

21 

22 

22 

24 

27 

27 

31 

33 

33 

35 

37 

39 

42 

45 

45 

47 

49 

51 

54 

54 

56 

58 

59 

21 
25 
30 
34 

 
 
 
EU-level targets and other contextual indicators under the European Education Area strategic framework 
List of key indicators, health 

Key Digital Economy and Society Index Indicators 
A8.1 
Key research, development and innovation indicators 
A9.1 
A10.1 
 Key Single Market and Industry indicators 
A11.1:  Public administration indicators – Slovenia 
A12.1.  Social Scoreboard for Slovenia 
A13.1 
A14.1 
A15.1.  Slovenia, selected indicators at regional level – Slovenia 
A16.1:  Financial soundness indicators 
Indicators on Taxation 
A17.1 
A18.1.  Key economic and financial indicators 
A19.1.  Debt sustainability analysis for Slovenia 
A19.2.  Heat map of fiscal sustainability risks for Slovenia 

LIST OF GRAPHS 

A1.1. 
A2.1 
A3.1 
A3.2 
A4.1: 
A5.1. 
A5.2. 
A5.3. 
A5.4. 
A6.1. 
A6.2. 
A7.1 

Progress towards SDGs in Slovenia in the last five years 
Share of RRF funds contributing to each policy pillar 
2014-2020 European Structural and Investment Funds (ESIF) - Total budget by fund (EUR billion, %) 
Cohesion policy contribution to the SDGs (EUR billion) 
Slovenia’s progress on the 2019-2020 CSRs (2022 European Semester cycle) 
Fiscal aspects of the green transition 
Thematic – Energy Share in energy mix (solids, oil, gas, nuclear, renewables) 
Thematic – Biodiversity Terrestrial protected areas and organic farming 
Thematic - Mobility Share of zero emissions vehicles (% of new registrations) 
Fair green transition challenges 
Energy poverty by income decile 
Economic importance and expansion of the circular economy – employment and value added in the circular economy 
sectors 

Life expectancy at birth, years 
Projected increase in public expenditure on healthcare over 2019-2070 (reference scenario) 

A11.1:  Performance on evidence-based policy making indicators 
A11.2:  Performance on the single market public procurement indicator 
A13.1  Gaps in tertiary educational attainment rates, 2020 
A14.1 
A14.2 
A15.1.  GDP per head (2010) and GDP growth (2010-2019) in Slovenia 
A15.2.  Labour productivity (real gross value added GVA per worker), EU27, Slovenia (NUTS-2 regions), 2000-2019 
A15.3.  Territories most affected by the climate transition in Slovenia (NUTS-3 level) 
A15.4.  Social indicators by degree of urbanisation in Slovenia, 2020 
A16.1:  Credit growth 
A16.2:  Evolution of house price index 
A17.1. 

Indicators on Tax wedge 

36 
38 
41 
44 
45 
47 
50 
51 
55 
56 
58 
59 
60 

20 
21 
22 
23 
24 
27 
28 
29 
29 
32 
32 

34 
42 
43 
48 
49 
49 
51 
51 
52 
52 
54 
54 
57 

18 

 
 
 
 
 
CROSS-CUTTING PROGRESS INDICATORS 
ANNEX 1: SUSTAINABLE DEVELOPMENT GOALS 

education (SDG 4).The RRP includes key reforms in 
long-term  care,  healthcare,  education  and  the 
labour market, which will help Slovenia on its way 
to  achieving  the  objectives  of  the  European  Pillar 
of Social Rights. 

Slovenia  performs  very  well  on  most  SDG 
indicators  related  to  productivity  (SDG  4,  8) 
and  is  improving  on  others  (SDG  9).  In  2020, 
the  share  of  households  with  high-speed  internet 
connection in Slovenia (65.6%) was well above the 
EU  average  (59.3%),  showing  significant  progress 
made  on  this  indicator  since  2015.  The  share  of 
adults  with  at 
least  basic  digital  skills  has 
improved in recent years (2015: 51%; 2019: 55%) 
but is still slightly  below EU average (2015: 54%; 
2019:  56%).  Although  public  expenditure  R&I  is 
increasing (0.56% of GDP in 2020), it is still below 
its  2010  level  (0.66%  of  GDP)  and  the  EU  level 
(0.78%  of  GDP).  The  RRP  will  help  digitalise  the 
public  and  private  sector  in  Slovenia  and  boost 
digital skills. The new R&I law increases the public 
spending  on  research  to  at  least  1%  of  the  GDP. 
These actions will ensure further progress is made 
on these SDGs. 

Slovenia  performs  very  well  overall  on  SDG 
indicators related to macroeconomic stability 
(SDG 8, 16). Slovenia performs well on indicators 
measuring  employment  (SDG  8).  In  particular,  the 
long-term  unemployment  rate  decreased  from 
4.7% in 2015 to 1.9% in 2020, which is below the 
EU average (2.4%). The RRP includes measures to 
tackle  unemployment  among  young  people  and 
help  them  quickly  enter  the  labour  market,  which 
should help the country make further progress on 
SDG 8. 

the 

This  Annex  assesses  Slovenia’s  progress 
towards  the  Sustainable  Development  Goals 
(SDGs)  along 
four  dimensions  of 
competitive  sustainability.  The  17  SDGs  and 
their related indicators provide a policy framework 
under  the  UN’s  2030  Agenda  for  Sustainable 
Development.  The  aim  is  to  end  all  forms  of 
poverty,  fight 
inequalities  and  tackle  climate 
change,  while  ensuring  that  no  one is  left  behind. 
The  EU  and  its  Member  States  are  committed  to 
this  historic  global  framework  agreement  and  to 
playing  an  active  role  in  maximising  progress  on 
the  SDGs.  The  graph  above  is  based  on  the  EU 
SDG  indicator  set  developed  to  monitor  progress 
on SDGs in an EU context. 

Slovenia  performs  ‘very  well’,  ‘well’  or  is 
improving  on  several  SDG  indicators  related 
to  environmental  sustainability  (SDG  2,  6,  7, 
9,  11,  15).  In  particular,  the  ‘recycling  rate  of 
municipal waste’ improved from 54.1% in 2015 to 
59.3% in 2020, which is above the EU average of 
47.8%.  Slovenia  is  making  progress  on  increasing 
the  share  of  renewable  energy  in  gross  final 
energy  consumption  (SGD  7)  and  was  able  to 
increase it from 22.9% in 2015 to 24.1% in 2020. 
The  RRP  is  expected  to  bring  about  significant 
changes  in  the  area  of  renewable  energy  by 
addressing 
challenges.  Regarding 
sustainable  infrastructure  (SDG  9),  Slovenia  is 
below the EU average in terms of share of buses 
and  trains  in  passenger  transport  (SI:  13.4%  of 
inland passenger-km in 2019; EU average: 17.2%). 
The RRP is expected  to help tackle the challenges 
related to sustainable mobility, aiming to increase 
the currently low use of public transportation. This 
includes  measures  to  upgrade  the  country’s  rail 
infrastructure. 

regulatory 

Slovenia  generally  performs  very  well  or  is 
improving  on  the  SDG  indicators  assessing 
the  fairness of society and economy (SDG 1, 
2, 3, 4, 5, 8, 10). (25) Slovenia performs very well 
compared to the EU average on poverty and basic 
needs  (SDG  1)  but  has  regressed  in  recent  years 
regarding access to medical care (SDG 3). Several 
measures in the RRP aim to address this challenge. 
In  the  context  of  fairness  in  society,  Slovenia 
outperforms the EU average on basic and tertiary 

(25)  See ‘Annex 12 – Employment, skills and social policy 

challenges in light of the European Pillar of Social Rights’ for 
further information. 

19 

 
 
 
                                                 
Graph A1.1: Progress towards SDGs in Slovenia in the last five years 

(1) For detailed datasets on the various SDGs see the annual ESTAT report ‘Sustainable development in the European Union’, 
https://ec.europa.eu/eurostat/web/products-statistical-books/-/KS-03-21-096; Extensive country specific data on the short-term 
progress of Member States can be found here: Key findings - Sustainable development indicators - Eurostat (europa.eu) 
Source: Eurostat, latest update of 28 April 2022. Data mainly refer to 2015-2020 and 2016-2021. 

20 

 
 
ANNEX 2: RECOVERY AND RESILIENCE PLAN - IMPLEMENTATION 

The  Recovery  and  Resilience  Facility  (RRF)  is 
the  centrepiece  of  the  EU’s  efforts  to 
support  its  recovery  from  the  COVID-19 
pandemic,  fast  forward  the  twin  transition 
and  strengthen  resilience  against  future 
shocks.  Slovenia  submitted 
its  recovery  and 
resilience  plan  (RRP)  on  30  April  2021.  The 
Commission’s positive assessment on 1 July 2021 
and  the  Council’s  approval  on  28 July  2021paved 
the  way  for  disbursing  EUR 1.8  billion  in  grants 
and  EUR   0.7  billion  in  loans  under  the  Recovery 
and  Resilience  Facility  over  2021-2026.  The 
financing agreement was signed on 13 September 
2021. The key elements of Slovenia’s RRP are set 
out in Table A2.1. 

The  share  of  funds  contributing  to  each  of 
the  RRF’s  six  policy  pillars  is  outlined  in  the 
graph below. 

by  Slovenia 

progress  made 

in 
The 
implementing  its  plan  is  published  in  the 
Recovery  and  Resilience  Scoreboard.  The 
Scoreboard  also  gives  a  clear  overview  of  the 
progress on implementing the RRF as a whole. 

Table A2.1:  Key elements of the Slovenian RRP 

Total allocation  

Investments and reforms  

€ 1.8  billion  in  grants 
(3.7%  of  2019  GDP) 
and  € 0.7  billion 
in 
loans 
59 
34 reforms  

investments  and 

Total 
milestones and targets 

number 

of 

209 

Estimated  macroeconomic 
impact (1)  

Raise  GDP  by  1.1%-
1.7%  by  2026  (0.6% 
in spillover effects) 

Pre-financing disbursed  

First instalment  

231  million 

EUR 
(September 2021) 
Slovenia  has  not  yet 
submitted 
first 
payment request 

a 

(1) See Pfeiffer P., Varga J. and in ’t Veld J. (2021), 
“Quantifying Spillovers of NGEU investment”, European 
Economy Discussion Papers, No. 144 and Afman et al. (2021), 
‘An overview of the economics of the Recovery and Resilience 
Facility’, Quarterly Report on the Euro Area (QREA), Vol. 20, No. 
3 pp. 7-16. 
Source: European Commission 2022 

Graph A2.1: Share of RRF funds contributing to each policy pillar 

70%

60%

50%

40%

30%

20%

10%

0%

Green transition

Digital
transformation

Smart, sustainable
and inclusive growth

Social and territorial
cohesion

Health, and
economic, social and
institutional
resilience

Policies for the next
generation

Each measure contributes towards two policy areas of the six pillars, therefore the total contribution to all pillars displayed on this 
chart amounts to 200% of the estimated cost of the 22 RRPs approved in 2021. The bottom part represents the amount of the 
primary pillar, the top part the amount of the secondary pillar.  
Source: RRF Scoreboard https://ec.europa.eu/economy_finance/recovery-and-resilience-scoreboard/country_overview.html 

21 

 
 
 
 
 
 
ANNEX 3: OTHER EU INSTRUMENTS FOR RECOVERY AND GROWTH 

The EU’s budget of more than EUR 1.2 trillion 
for  2021-2027  is  the  investment  lever  to 
help  implement  EU  priorities.  Underpinned  by 
about EUR 800 billion through Next Generation EU 
and  its  largest  instrument,  the  Recovery  and 
Resilience  Facility, 
significant 
firepower to support the recovery and sustainable 
growth. 

represents 

it 

The 

support 

vulnerable 

In  2021-2027,  EU  cohesion  policy  funds (26) 
will 
development 
long-term 
objectives  in  Slovenia  by  investing  EUR  3.54 
billion (27),  including  EUR  258.7  million  from  the 
Just  Transition  Fund  to  alleviate  the  socio-
economic  impacts  of  the  green  transition  in  the 
most 
partnership 
regions. 
agreement  and  programmes  under  the  cohesion 
policy  funds  for  2021-2027  are  designed  taking 
into  account  the  2019-2020  country-specific 
recommendations  and 
investment  guidance 
provided  as  part  of  the  European  Semester, 
ensuring  synergies  and  complementarities  with 
other EU funding. In addition, Slovenia will benefit 
from  EUR  1.2  billion  support  for  the  2023-27 
period from the Common Agricultural Policy, which 
supports  social,  environmental,  and  economic 
sustainability  and  innovation  in  agriculture  and 
rural  areas,  contributing  to  the  European  Green 
Deal, and ensuring long-term food security. 

Graph A3.1: 2014-2020 European Structural and 
Investment Funds (ESIF) - Total budget by fund 
(EUR billion, %) 

Note: The data for the EAFRD and REACT-EU refer to the 
period 2014-2022. 
Source: European Commission 2022 

In  2014-2020,  the  European  Structural  and 
Investment  Funds  (ESIF)  for  Slovenia  had 
been  set  to  invest  EUR  4.50  billion (28)  from 
the EU budget. The total investment including 
national  financing  amounts  to  EUR  5.65 
billion (Graph A3.1), representing around 1.85% 
of  GDP  for  2014-2020  and  39.24%  of  public 
investment (29).  By  31 December 2021,  108%  of 
the  total  was  allocated  to  specific  projects  and 
68%  was  reported  as  spent,  leaving  EUR  1.81 
billion  to  be  spent  by  the  end  of  2023 (30). 
Research and innovation, competitiveness of SMEs, 
environmental  protection  and  resource  efficiency, 
network infrastructure in transport and energy, as 
well  as  sustainable  and  quality  employment  (in 
total  EUR  2.5  billion)  feature  prominently  among 
the  11  objectives  for  cohesion  policy  funding  in 
Slovenia.  By  the  end  of  2020,  Cohesion  policy 
investments i) supported over 13 500 enterprises, 
with  almost  1 300  new  direct  jobs  created,  ii) 
helped  improve  the  water  supply  for  almost 

(28)  ESIF includes cohesion policy funds (ERDF, ESF+, CF, Interreg) 
and European Agricultural Fund for Rural Development 
(EAFRD) and European Maritime and Fisheries Fund (EMFF). 
According to the ‘N+3 rule’, the Cohesion funds committed 
for the years 2014-2020 must be spent by 2023 at latest 
and the EAFRD funds committed for the years 2014-2022 
must be spent by 2025 at the latest. Data source: Cohesion 
Open data; cut-off date 31/12/2021 for ERDF, ESF+, CF, 
Interreg; cut-off date 31/12/2021 for EAFRD and EMFF. 

(26)  European Regional Development Fund (ERDF), European 

(29)  Public investment is gross fixed capital formation plus 

Social Fund+ (ESF+), Cohesion Fund (CF), Just Transition Fund 
(JTF), Interreg. 

(27) Current prices, source: Cohesion Open Data  

capital transfers, general government. 

(30)  Including REACT-EU. ESIF data on 

https://cohesiondata.ec.europa.eu/countries/SI.  

22 

 
 
                                                 
 
                                                 
Graph A3.2: Cohesion policy contribution to the SDGs (EUR billion) 

Source: European Commission 2022 

160 000  people,  and  iii)  led  to  a  decrease  in  the 
annual  energy  consumption  of  public  buildings  by 
around  57  GWh/year.  Furthermore,  around 
320 000  people  participated  in  projects  funded 
under  the  European  Social  Fund  (ESF),  including 
around 31 600 long-term unemployed people and 
nearly  81 000  young  people.  These  measures 
to  gain  a 
allowed  nearly  45 000  people 
qualification and over 18 400 received a job. 

Cohesion  policy  funds  already  substantially 
contribute  to  the  Sustainable  Development 
Goals  (SDGs)  objectives.  In  Slovenia,  cohesion 
policy funds support 11 of the 17 SDGs with up to 
93% of the expenditure helping attain the goals.  

REACT-EU 

instrument 

The 
(Recovery 
Assistance  for  Cohesion  and  the  Territories 
of Europe) under NextGenerationEU provided 
EUR 278 million of additional funding to the 
2014-2020  cohesion  policy  allocations  for 
Slovenia.  This  was  to  help  ensure  a  balanced 
recovery,  foster  convergence  and  provide  vital 
support 
the  COVID-19 
outbreak.  REACT-EU  provided  support  in  Slovenia 
to  i)  strengthen  the  healthcare  system,  e.g.  by 
promoting  energy  efficiency  in  hospitals,  ii)  build 
the  resilience  of  long-term  care  services,  iii) 
contribute  to  the  short-time  work  schemes,  iv) 
strengthen the digital and green transition, and v) 
reduce  material  deprivation  with  direct  food 
delivery. 

regions  following 

to 

Investment 
The  Coronavirus  Response 
Initiative (31) provided the first EU emergency 

It 

to 

enabling  Slovenia 

support to Slovenia in relation to the COVID-
introduced  extraordinary 
19  pandemic. 
flexibility 
re-allocate 
resources for immediate public health needs (EUR 
19  million)  and  support  to  businesses  (EUR  58 
million). For instance, Slovenia shifted resources to 
purchase protective and healthcare material, boost 
the  capacities  in  the  healthcare  sector,  provide 
working  capital  to  SMEs, protect  jobs  and  support 
the digitalisation of the education system. 

received 

support  under 

Slovenia 
the 
European  instrument  for  temporary  support 
to  mitigate  unemployment  risks 
in  an 
emergency  (SURE)  to  finance  short-time 
work  schemes  and  similar  measures. 
In 
September  2020,  the  Council  granted  financial 
assistance under SURE to Slovenia for a maximum 
of  EUR  1.113  billion,  which  was  disbursed  by 
February 2021.  SURE 
to  have 
supported  approximately  60%  of  workers  and 
80%  of  firms  for  at  least  one  month  in  2020, 
primarily  in  manufacturing,  wholesale  and  retail 
trade,  and  accommodation  and  food  services. 
Slovenia is estimated to have saved a total of EUR 
0.05  billion  on  interest  payments  as  a  result  of 
SURE’s lower interest rates. 

is  estimated 

the 

The  Commission  is  providing  tailor-made 
Support 
expertise 
Technical 
via 
Instrument 
to  help  Slovenia  design  and 
implement  reforms  to  boost  growth,  including 
expertise to help it implement its RRP. Since 2016, 
Slovenia  has  received  assistance  through  53 

(31)  Re-allocating ESIF resources according to Regulation (EU) 

2020/460 of the European Parliament and of the Council of 

30 March 2020, and Regulation (EU) 2020/558 of the 
European Parliament and of the Council of 23 April 2020. 

23 

 
                                                 
                                                                              
 
technical  support  projects.  Projects  delivered  in 
2021  aimed  to,  e.g.  develop  the  local  capital 
markets,  prepare  the  national  strategy  for  the 
transition out of coal, and transpose the EU’s clean 
energy  package.  The  Commission  is  also  helping 
and 
Slovenia 
investments  included  in  the  RRP,  e.g.  for  digital 
transformation of healthcare and the promotion of 
renewable  energy  sources.  In  2022,  new  projects 
will  start  supporting,  among  other  things,  the 
optimisation  of  the  governance  model  of  the  R&I 
ecosystem or innovative digital finance.  

implement 

reforms 

specific 

also 

benefits 

Slovenia 
from  other  EU 
programmes,  such  as  the  Connecting  Europe 
Facility,  which  allocated  EUR  349.3  million  in  EU 
funding  to  specific  projects  on  strategic  transport 
networks,  and  Horizon  2020,  which  allocated  EU 
funding of EUR 379.4 million.  

24 

 
ANNEX 4: PROGRESS IN IMPLEMENTATION OF THE COUNTRY-SPECIFIC 
RECOMMENDATIONS  

The  Commission  assessed  the  2019-2021 
country-specific  recommendations  (CSRs) (32) 
addressed  to  Slovenia  in  the  context  of  the 
European  Semester.  The  assessment  takes  into 
account  the  policy  action  taken  by  Slovenia  to 
date (33),  as  well  as  the  commitments  in  the 
Recovery  and  Resilience  Plan  (RRP) (34).  At  this 
early  stage  of  the  RRP  implementation,  overall 
66%  of  the  CSRs  focusing  on  structural  issues  in 
2019  and  2020  have  recorded  at  least  “some 
progress”,  while  34%  recorded  “limited”  or  “no 
(see  Graph  below).  Considerable 
progress” 
additional  progress  in  addressing  structural  CSRs 
is  expected  in  the  years  to  come  with  the  further 
implementation of the RRP.   

Graph A4.1: Slovenia’s progress on the 2019-2020 
CSRs (2022 European Semester cycle) 

Substantial 
Progress
13%

Source: European Commission 

No 
Progress
2%

Limited 
Progress
27%

Some Progress
55%

(32)  2021 CSRs: https://eur-lex.europa.eu/legal-

content/EN/TXT/?uri=CELEX%3A32021H0729%2825%29&qi
d=1627675454457  
2020 CSRs : https://eur-
lex.europa.eu/search.html?textScope0=ti&lang=en&scope=E
URLEX&qid=1526385017799&type=quick&AU_CODED=CO
NSIL&DD_YEAR=2020&andText0=recommendation&DD_M
ONTH=07 
2019 CSRs : https://eur-
lex.europa.eu/search.html?textScope0=ti&lang=en&scope=E
URLEX&qid=1526385017799&type=quick&AU_CODED=CO
NSIL&DD_YEAR=2019&andText0=recommendation&DD_M
ONTH=07 

(33)  Incl. policy action reported in the National Reform 

Programme, as well as in the RRF reporting (bi-annual 
reporting on the progress with implementation of milestones 
and targets and resulting from the payment request 
assessment). 

(34)  ) 

Member States were asked to effectively address all 

or a significant subset of the relevant country-specific 
recommendations issued by the Council in 2019 and 2020 in 
their RRPs. The CSR assessment presented here takes into 
account the degree of implementation of the measures 
included in the RRP and of those done outside of the RRP at 
the time of assessment.  Measures foreseen in the annex of 
the adopted Council Implementing Decision on the approval 
of the assessment of the RRP which are not yet adopted nor 
implemented but considered as credibly announced, in line 
with the CSR assessment methodology, warrant “limited 
progress”. Once implemented, these measures can lead to 
“some/substantial progress” or “full implementation”, 
depending on their relevance. 

25 

 
 
                                                 
 
  
 
Table A4.1:  Summary table on 2019,2020 and 2021 CSRs 

(Continued on the next page) 

26 

SloveniaAssessment in May 2022*RRP coverage of CSRs until 20262019 CSR1Limited ProgressAchieve the medium-term budgetary objective in 2020.Not relevant anymoreNot applicableAdopt and implement reforms in healthcareLimited ProgressRelevant RRP measures planned as of 2024and long-term care that ensure quality, accessibility and long-term fiscal sustainability.Some ProgressRelevant RRP measures planned as of 2021.Ensurethelong-termsustainabilityandadequacyofthepensionsystem,includingbyadjustingthestatutoryretirementagerestrictingearlyretirementandotherformsofearlyexitfromthelabour market.Limited ProgressRelevant RRP measures planned as of 2024.Increasetheemployabilityoflow-skilledandolderworkersbyimproving labour market relevance of education and training, lifelong learningandactivationmeasures,includingthroughbetterdigitalliteracy.Limited ProgressRelevant RRP measures planned as of 2024.2019 CSR 2Some ProgressSupport the development of equity markets.Limited ProgressRelevant RRP measures planned as of 2022.Improve the business environment by reducing regulatory restrictions and administrative burden.Some ProgressRelevant RRP measures planned as of 2021.Improve competition, professionalisation and independent oversight in public procurement.Some ProgressRelevant RRP measures planned as of 2021.Carry out privatisations in line with the existing plans.No Progress2019 CSR 3Some ProgressFocus investment-related economic policy on research and innovation,Some ProgressRelevant RRP measures planned as of 2021.low carbon and energy transition,Limited ProgressRelevant RRP measures planned as of 2022.sustainable transport, in particular rail, and Some ProgressRelevant RRP measures planned as of 2022.environmental infrastructure, taking into account regional disparities.Some ProgressRelevant RRP measures planned as of 2022.2020 CSR1Some ProgressTakeallnecessarymeasures,inlinewiththegeneralescapeclauseoftheStabilityandGrowthPact,toeffectivelyaddresstheCOVID-19pandemic,sustaintheeconomyandsupporttheensuingrecovery.Wheneconomicconditionsallow,pursuefiscalpoliciesaimedatachievingprudentmedium-termfiscalpositionsandensuring debt sustainability, while enhancing investment. Not relevant anymoreNot applicableEnsuretheresilienceofthehealthandlong-termcaresystem,includingbyprovidingtheadequatesupplyofcriticalmedicalprod-ucts and addressing the shortage of health workers.Some ProgressRelevant RRP measures planned as of 2022. 
 
 
 
 
 
  
 
Table (continued) 

* See footnote 34 
Source: European Commission 

27 

2020 CSR2Substantial ProgressMitigate the social and employment impact of the COVID-19 crisis, including by providing adequate income replacement and social protection, Substantial ProgressRelevant RRP measures planned as of 2021.enhancing short-time work schemes and through flexible working arrangements. Substantial ProgressRelevant RRP measures planned as of 2022.Ensure that these measures provide adequate protection for non-standard workers.Some ProgressRelevant RRP measures planned as of 2022.2020 CSR 3Some ProgressContinue to swiftly implement measures to provide liquidity and financing to businesses and households and Substantial ProgressRelevant RRP measures planned as of 2022.reduce administrative burden. Some ProgressRelevant RRP measures planned as of 2021.Front-load mature public investment projects and Substantial ProgressRelevant RRP measures planned as of 2024.promote private investment to support the economic recovery. Limited ProgressRelevant RRP measures planned as of 2024.Focusinvestmentonthegreenanddigitaltransition,inparticularonclean and efficient production and use of energy, Limited ProgressRelevant RRP measures planned as of 2024.environmental infrastructure,Some ProgressRelevant RRP measures planned as of 2022.sustainable transport,Some ProgressRelevant RRP measures planned as of 2022.research and innovation, and Some ProgressRelevant RRP measures planned as of 2021.the rollout of the 5G network. Some ProgressRelevant RRP measures planned as of 2022.Promote digital capacities of businesses, andSome ProgressRelevant RRP measures planned as of 2024. strengthen digital skills, Some ProgressRelevant RRP measures planned as of 2024.e-commerce and Limited ProgressRelevant RRP measures planned as of 2021.e-health.Limited ProgressRelevant RRP measures planned as of 2023.2021 CSR1Some ProgressIn2022,maintainasupportivefiscalstance,includingtheimpulseprovidedbytheRecoveryandResilienceFacility,andpreservenationally financed investment.Full ImplementationNot applicableWheneconomicconditionsallow,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositionsandensuringfiscalsustainability in the medium term. Some ProgressNot applicableAt the same time, enhance investment to boost growth potential.Payparticularattentiontothecompositionofpublicfinances,onboththerevenueandexpendituresidesofthebudget,andtothequalityofbudgetarymeasuresinordertoensureasustainableandinclusiverecovery.Prioritisesustainableandgrowth-enhancinginvestment,inparticularinvestmentsupportingthegreenanddigitaltransition. Some ProgressNot applicableGiveprioritytofiscalstructuralreformsthatwillhelpprovidefinancingforpublicpolicyprioritiesandcontributetothelong-termsustainabilityofpublicfinances,including,whererelevant,bystrengtheningthecoverage,adequacy,andsustainabilityofhealthand social protection systems for all.Limited ProgressNot applicable 
 
 
  
 
ENVIRONMENTAL SUSTAINABILITY 
ANNEX 5: GREEN DEAL 

intends 

The  European  Green  Deal 
to 
transform the  EU  into a  fair and prosperous 
society,  with  a  modern,  resource-efficient 
and competitive economy where there are no 
net  emissions  of  greenhouse  gases  in  2050 
and  where  economic  growth  is  decoupled 
from resource use. This annex offers a snapshot 
of  the  most  significant  and  economically  relevant 
developments in Slovenia in the respective building 
blocks  of 
is 
complemented by Annex 6 on the employment and 
social impact of the green transition and Annex 7 
for circular economy aspects of the Green Deal.  

the  European  Green  Deal. 

It 

Slovenia  is  unlikely  to  achieve  the  current 
proposed  greenhouse  gas  reduction  target 
for  2030  with  existing measures  alone.  Total 
greenhouse  gas  emissions  have 
remained 
approximately  at  similar  levels  since  2016  with a 
slight  decrease  visible 
in  2019  and  2020 
compared  to  the  1990  level.  This  decrease  is 
considerably  smaller  ,  than  the  EU  average. 
Slovenia  intends  to  achieve  more  reductions  than 
its current effort sharing target of -15% for 2030. 
With the additional measures, it is estimated that 
Slovenia  will  overachieve  this  target  for  sectors 
not  covered  by  the  EU  emissions  trading  system, 
provided they are all implemented, and come close 
to  achieving  the  proposed  target  for  Slovenia 
under  the  Fit  for  55  package.  At  the  same  time, 
the  energy  intensity  in  industry,  services  and  the 
residential  sector  remains  relatively  high  and  the 
country’s  decarbonisation  path 
long-term 
climate  neutrality  is  still  unclear.  Under  current 
land  management  practices,  Slovenia  is  projected 
to  see  moderate  net  removals  by  2030.  Slovenia 
has  allocated  42%  of  its  recovery  and  resilience 
plan  (RRP)  to  climate  objectives  and  outlines 
crucial  reforms  and  investments  to  advance  the 
transition  to  a  more  sustainable,  low-carbon  and 
climate-resilient economy. 

to 

is  collecting  more  revenue 

Slovenia 
in 
environmental  taxes  than  the  EU  average, 
but government investment in environmental 
protection 
is  below  average.  Slovenia’s 
environmental  tax  revenues,  both  as  a  share  of 
total  tax  revenues  and  as  a  share  of  GDP  are 
above  the  EU  average,  driven  mainly  by  energy 
taxes  and  to  a  smaller  extent  by  transport  and 
pollution  taxes.  At  the  same  time,  the  Slovenian 
government  spends  a 
its 
expenditure  on  environmental  protection  than  in 

lower  share  of 

the  EU  overall.  Fossil  fuel  subsidies  have  been 
steadily  decreasing  from 2017.  Still,  Slovenia  has 
been singled out in the European Court of Auditors’ 
review  as  being  among  the  15  Member  States, 
which spent more on fossil fuel subsidies than on 
2020. (35) 
renewable 
Meanwhile, the climate risk to public finances due 
to  uninsured  assets  is  considered  low/medium, 
with a significant share of uninsured climatological 
losses. For more indicators on taxation, see Annex 
18. 

subsidies 

energy 

in 

Graph A5.1: Fiscal aspects of the green transition 

Source: Eurostat 

Graph A5.2: Thematic – Energy  
Share in energy mix (solids, oil, gas, nuclear, 
renewables) 

(1) The energy mix is based on gross inland consumption, and 
excludes heat and electricity. The share of renewables 
includes biofuels and non-renewable waste. 

Source: Eurostat 

Slovenia’s  energy  consumption 
remains 
dependent  on  fossil  fuel  sources,  with 
renewable  alternatives  being  underused. 
Renewables  and  biofuels  make  up  only  18%  of 
Slovenia’s gross inland consumption in 2020. This 

(35) Source: Review 01/2022: Energy taxation, carbon 

pricing and energy subsidies: Review 01/2022: Energy 
taxation, carbon pricing and energy subsidies (europa.eu). 

28 

0.02.04.06.08.010.0Environmental taxes (%of GDP)Environmental taxes (%of total taxation)Government expenditureon environmentalprotection (% of totalexpenditure)SI (2020)EU27 (2020)020406080100200520102015201820192020SISolid fossil fuels, peat and oil shaleOilGasNuclearRenewables 
 
 
  
 
  
 
                                                 
the  years  10.8  %  in  2020,  which  is  marginally 
above the EU average of 9.07 %.  

In  terms  of  pollution,  air  quality  in  Slovenia  is 
improving. The number of years of life lost due to 
air pollution from PM2.5 has dropped  from 1 016 
per 100 000 inhabitants in 2018 to 744 in 2019, 
which  is  below  the  EU  average  of  762.  Similarly, 
number of years of life lost due to pollution from 
NO2  has  dropped 
from  29  per  100 000 
inhabitants in 2018 to 19 in 2019 (EU average is 
99).  Emissions  from  key  air  pollutants  have 
decreased  significantly  in  Slovenia  over  recent 
years,  while  GDP  growth  continued.  As  regards 
nitrates pollution of ground water, the situation is 
stable.  However, 
nitrate 
concentrations  in  surface  water  has  deteriorated 
with  the  increase  of  eutrophication,  from  4.2% 
(2012-2015) to 19.4% (2016-2019). 

status 

the 

of 

In  terms  of  mobility,  the  market  for  zero-
emission vehicles  in  Slovenia  is  developing  slowly 
even  though  it  may  be  stimulated  in  the  near 
future  as  plans  for  a  more  ambitious  deployment 
of  recharging  points  are  being  prepared  by  the 
authorities  (operation  plan  for  structural  funds). 
About  half  of  the  country’s  railway  network  is 
electrified. 

to  shift  more 

traffic 
transport  modes 

Priority should be given to measures that will 
reduce  the  current  dependence  on  fossil 
fuels  (by  replacing  existing  fleets  with  low-  and 
zero-emission  vehicles  and  boosting  the  use  of 
renewable and low- carbon fuels). Action should be 
towards  more 
taken 
(in  particular, 
sustainable 
increasing the number of passengers travelling by 
rail and commuting by public transport and active 
modes). Furthermore, it is necessary to take action 
to  further  increase  the  speed  of  fleet  renewal, 
such  as  providing  I)  scrapping  schemes  where 
support  for  the  purchase  of  a  zero-emission 
vehicle is linked to the scrapping of an old vehicle, 
ii)  incentives  for  retrofitting  of  old  vehicles,  or  iii) 
measures disincentivising the use of older vehicles 
in business and corporate fleets. 

sources. 
energy 

renewable 
existing 

figure comprises 8% primary solid biofuels and 10 
Furthermore, 
other 
% 
Slovenia’s 
is 
storage 
underdeveloped  and  insufficient  to  address  the 
needs of renewables production locally. In addition, 
more  efforts  are  needed  to  simplify  the  permits 
and  administrative  procedures  for  renewable 
power  plant  installations,  which  in  turn  may  help 
spur  the  uptake  of  renewable  energy  sources. 
However,  Slovenia’s  RRP  aims  to  address  the 
legislative  obstacles  to  increasing  the  share  of 
renewables. Since 2019, Slovenia has made some 
progress  in  reducing  dependence  on  fossil  fuel 
sources,  for  example  with  a  reduction  of  oil  and 
petroleum  products  from  35%  to  31%  between 
2019  and  2020.  Slovenia  has  also  adopted  a 
binding  strategy  to  phase  out  the  use  of  coal  for 
electricity  production  by  2033  and  to  restructure 
the industry in coal regions. In 2020, nuclear heat 
made  up  23%  of  Slovenia’s  energy  mix  in  gross 
inland  consumption,  above  the  EU  average  of 
13%. 

In  terms  of  biodiversity  and  health  of  the 
ecosystem,  Slovenia  is  performing  relatively 
well  but  with  some  exceptions.  By  2021, 
37.9%  of  the  national  land  area  of  Slovenia  was 
covered by Natura 2000 (EU average 18.1%), with 
special protection areas classified under the Birds 
Directive  covering  25%  (EU  average  12.3%)  and 
sites of community importance under the Habitats 
Directive  covering  32.7%  (EU  average  13.8%)  of 
Slovenia’s  territory.  While  the  actions  under  the 
Natura  2000  network  on  land  can  be  considered 
complete and above the EU average, there is still a 
gap  in  classification  of  marine  special  protection 
areas  for  the  Mediterranean  Shag  in  Slovenian 
marine waters for which the Commission initiated 
an  infringement  procedure  in  2020.  Taking  into 
account  both  Natura  2000  and  other  nationally 
designated  protected  areas,  Slovenia 
legally 
protects  40.5%  of  its  terrestrial  areas  (EU-27 
average 26%) and 2.48 % of its marine areas (EU- 
27 average 8%). According to the report submitted 
by Slovenia on the conservation status of habitats 
and  species  covered  by  the  Article  17  of  the 
Habitats Directive for 2013-2018 (36), the share of 
habitats  with  bad  conservation  status  has 
increased to 61.8% and the share of assessments 
for  species  with  bad  conservation  status  has 
increased    to  53%.  The  percentage  of  land  used 
for  organic  farming  has  gradually  increased  over 

(36)  Source: EEA, Conservation status and trends of habitats and 

species, 2019. 

29 

 
                                                 
Graph A5.3: Thematic – Biodiversity  
Terrestrial protected areas and organic farming 

(1) For terrestrial protected areas data for 2018, and data for 
the EU average (2016, 2017) is lacking.” 
Source: European Environment Agency (terrestrial protected 
areas) and Eurostat (organic farming) 

Graph A5.4: Thematic - Mobility 
Share of zero emissions vehicles (% of new 
registrations) 

(1) Zero emission vehicles (passenger cars) include battery 
and fuel cell electric vehicles (BEV, FCEV). 
Source: European Alternative Fuels Observatory 

30 

02040602016201720192020SITerrestrial protected areas (% total area)Area under organic farming (% total utilised agricultural area)EU27 (terrestrial)EU27 (organic)0.02.04.06.08.010.0201620172018201920202021% of new registrationsSIEU27 
  
 
  
 
 
Table A5.1:   Indicators underpinning progress on the European Green Deal from a macroeconomic perspective 

2005 

2019 

MTCO2 eq; %; pp (2) 

11,8 

-9% 

2020 

-15% 

2030 

-15% 

WEM 

WAM 

-6 

11 

2030 

-27% 

WEM 

WAM 

-18 

-1 

Target 

Distance 

Target 

Distance 

'Fit for 55' 

  Non-ETS GHG emission reduction target (1) 

s
t
e
g
r
a
t

Share of energy from renewable sources in gross final 
consumption of energy (1) 

Energy efficiency: primary energy consumption (1) 

Energy efficiency: final energy consumption (1) 

% 

Mtoe 

Mtoe 

Environmental taxes (% of GDP) 

Environmental taxes (% of total taxation) 

% of GDP 

% of taxation (3) 

Government expenditure on environmental protection 

% of total exp. 

Investment in environmental protection 

Fossil fuel subsidies 

Climate protection gap (5) 

  Net GHG emissions 
e
t
a
m

GHG emissions intensity of the economy 

Energy intensity of the economy 

  Final energy consumption (FEC) 

FEC in residential building sector 

FEC in services building sector 

% of GDP (4)  

EUR2020bn 

score 1-4 

1990 = 100 

kg/EUR'10 

kgoe/EUR'10 

2015=100 

2015=100 

2015=100 

Smog-precursor emission intensity (to GDP) (4) 

tonne/EUR'10 (6) 

Years of life lost caused due to air pollution by PM2.5 

per 100.000 inh. 

Years of life lost due to air pollution by NO2 

Nitrate in ground water 

Terrestrial protected areas 

Marine protected areas 

Organic farming 

per 100.000 inh. 

mg NO3/litre 

% of total 

% of total 

% of total utilised 
agricultural area 

2005 

2016 

2017 

2018 

2019 

2020 

20% 

22% 

22% 

21% 

22% 

25% 

7,2 

5,1 

6,5 

4,9 

6,7 

4,9 

6,7 

5,0 

6,5 

4,9 

6,1 

4,4 

SLOVENIA 

National contribution to 
2030 EU target 

27% 

6,4 

4,7 

EU 

2015 

2016 

2017 

2018 

2019 

2020 

2018 

2019 

2020 

3,9 

10,3 

2,13 

1,32 

0,08 

3,9 

10,3 

1,22 

0,68 

0,08 

3,7 

9,8 

1,03 

0,63 

0,09 

3,4 

9,1 

1,24 

0,64 

0,08 

3,3 

8,9 

3,0 

7,8 

1,31 

1,24 

- 

0,06 

- 

- 

2,4 

6,0 

1,66 

0,42 

2,4 

5,9 

1,70 

0,38 

56,87 

55,70 

2,2 

5,6 

1,61 

0,41 

- 

1.5 out of 4 (slight decrease from historical level of 1.8). This is a low/medium risk category (4 being a 
high risk). 

91 

0,48 

0,17 

100,0 

100,0 

100,0 

1,30 

970 

88 

19,5 

- 

- 

8,9 

95 

0,49 

0,17 

103,6 

101,7 

108,3 

1,22 

95 

0,48 

0,17 

95 

0,45 

0,16 

92 

0,43 

0,15 

105,0 

105,0 

102,9 

99,2 

93,0 

105,8 

104,4 

1,12 

1,07 

90,7 

99,4 

0,99 

916 

1021 

1016 

744 

39 

16,5 

52,6 

- 

9,1 

68 

16,2 

53,6 

- 

9,6 

29 

18,3 

- 

- 

10,0 

19 

16,2 

40,4 

5,2 

10,4 

86 

0,43 

0,15 

93,2 

92,0 

91,4 

- 

- 

- 

- 

40,4 

- 

10,8 

79 

0,32 

0,12 

103,5 

101,9 

102,4 

0,99 

863 

120 

21,7 

- 

- 

8,0 

76 

0,31 

0,11 

102,9 

101,3 

100,1 

0,93 

762 

99 

20,7 

25,7 

10,7 

8,5 

69 

0,30 

0,11 

94,6 

101,3 

94,4 

- 

- 

- 

- 

25,7 

- 

9,1 

Net land take 

per 10,000 km2 

5,3 

2,6 

3,0 

13,0 

11,0 

5,0 

2000-2006 

2006-2012 

2012-2018 

00-06 

06-12 

12-18 

2015 

2016 

2017 

2018 

2019 

2020 

2018 

2019 

2020 

GHG emissions intensity of transport (to GVA) (7) 

kg/EUR'10 

0,78 

0,79 

0,72 

0,71 

0,68 

Share of zero emission vehicles (8) 

% in new registrations 

Number of plug-in electric vehicles per charging point 

0,2 

1 

0,3 

1 

0,5 

3 

0,6 

4 

0,8 

5 

Share of electrified railways 

% 

41,4 

41,4 

50,5 

50,5 

50,5 

Congestion (average number of hours spent in road congestion per year by a 
representative commuting driver) 

26,8 

26,2 

26,2 

26,7 

25,8 

0,62 

3,1 

7 

- 

- 

0,89 

0,87 

0,83 

1,0 

8 

55,6 

28,9 

1,9 

8 

56,0 

28,8 

5,4 

12 

- 

- 

Share of smart meters in total metering points (9)  
- electricity 

Share of smart meters in total metering points (9)  
- gas 

Year 

SI 

EU 

% of total 

2018 

58,2 

35,8 

% of total 

2018 

0,1 

13,1 

65,9 

ICT used for environmental sustainability (10) 

% 

2021 

74,2 

y
c
i
l
o
p

o
t

s
s
e
r
g
o
r
P

l
a
i
c
n
a
n

i
f
d
n
a
l
a
c
s
i
F

s
r
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c
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i

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e
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n
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t
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y
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i
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(1) The 2030 non-ETS GHG target is based on the Effort Sharing Regulation. The FF55 targets are based on the COM proposal to increase EU's climate ambition by 2030. 
Renewables and Energy Efficiency targets and national contributions under the Governance Regulation (Regulation (EU) 2018/1999). (2) Distance to target is the gap 
between Member States’ 2030 target under the Effort Sharing Regulation and projected emissions, with existing measures (WEM) and with additional measures (WAM) 
respectively, as a percentage of 2005 base year emissions. (3) Percentage of total revenues from taxes and social contributions (excluding imputed social contributions). 
Revenues from the ETS are included in environmental tax revenues (in 2017 they amounted to 1.5% of total environmental tax revenues at the EU level). (4) Covers 
expenditure on gross fixed capital formation to be used for the production of environmental protection services (i.e. abatement and prevention of pollution) covering all 
sectors, i.e. government, industry and specialised providers. (5) The climate protection gap indicator is part of the European adaptation strategy (February 2021), and is 
defined as the share of non-insured economic losses caused by climate-related disasters. (6) Sulphur oxides (SO2 equivalent), Ammonia, Particulates < 10µm, Nitrogen 
oxides in total economy (divided by GDP). (7) Transportation and storage (NACE Section H). (8) Zero emission vehicles include battery electric vehicles (BEV) and fuel cell 
electric vehicles (FCEV). (9) European Commission Report (2019) 'Benchmarking smart metering deployment in the EU-28'. (10) European Commission (2021). Each year 
the DESI is re-calculated for all countries for previous years to reflect any possible change in the choice of indicators and corrections to the underlying data. Country scores 
and rankings may thus differ compared with previous publications. 
Source: Eurostat, JRC, European Commission, EEA, EAFO  

31 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
  
  
  
  
  
  
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ANNEX 6: EMPLOYMENT AND SOCIAL IMPACT OF THE GREEN TRANSITION 

The  green  transition  not  only  encompasses 
environmental 
to 
improvements 
sustainability, but also includes a significant 
social dimension.  While measures in this regard 
include the opportunity for sustainable growth and 
job creation, it must also be ensured that no one is 
left  behind  and  all groups  in  society  benefit  from 
the  transition.  Slovenia’s  green  transition  benefits 
from  positive  labour  market  trends  and  recent 
promising policy measures;  at the  same  time, the 
percentage  of  energy-intensive  sectors  remains 
sizeable  and  lower-income  groups  and  certain 
areas of the country are likely to face challenges. 

Slovenia’s recovery and resilience plan (RRP) 
outlines  some  reforms  and  investments  to 
support  a  green  transition  that  is  fair.  The 
RRP  includes  measures  to  promote  the  lower  use 
of  fossil  fuels  and  sustainable  solutions  for 
housing,  such  as  its  financing  affordable  housing 
projects. Other investments in ensuring the energy 
efficiency of public buildings, flood prevention and 
specific  measures  on  the  circular  economy  will 
also  support  the  transition  of  key  sectors  of  the 
economy,  including  through  reforms  in  public 
procurement.  The  RRP  also 
includes  some 
measures  to  increase  the  green  dimension  in  the 
education  and  training  system  and  to  develop 
green skills are also included in the RRP. Slovenia’s 
2020 integrated national energy and climate plan  
analyses the impacts on energy poverty, skills and 
to  some  extent  the  income  distribution,  and 
develops  the  approach  for  addressing  energy 
poverty. The plan includes a timetable to introduce 
a legal definition for energy poverty and establish 
indicators  and 
a  monitoring  framework  with 
targets. However, it does not report on the number 
of households affected by energy poverty, nor the 
specific  and  measurable  objectives 
to  be 
fulfilled. (37) 

The  economy  has  slightly  reduced 
its  carbon 
footprint  and  though  key  energy-intensive  sectors 
remain  sizeable,  the  green  economy  is  relatively 
large and provides strong potential for job creation. 
The  intensity  of  greenhouse  gas  (GHG)  emissions  in  the 
Slovenia  economy  decreased  slightly  between  2015  and 
2020 (in terms of gross value added) and stands at 50% 
above the EU average, with a carbon footprint per worker 
at 14.13 tonnes of GHG emissions (slightly above the EU 
average  of  13.61  in the  EU)  (see  Figure  1).  Slovenia  has 
some  sectors  that  are  likely  to  decline  due  to  the  green 

(37)  SWD(2020) 923 final. 

32 

transition,  including  coal,  lignite  and  fossil  fuel  based 
energy  production. (38)  The  energy-intensive  industry 
provides  jobs  for  4.2%  of  the  total  employed 
workforce,  for  which  up-  and  reskilling  could  be 
particularly  important  (see  Annex  15).  Conversely, 
the  environmental  goods  and  services  sector 
already  provides  jobs  to  an  above-average  share 
of  people  employed  (2.8%  vs  2.1% in  the  EU) (39) 
and some solar energy potential as well as energy 
efficiency  improvements  offer  opportunities  for 
green jobs (40). However, the slight increase in the 
job vacancy rate (2.8% in Q3-2021 vs 2.4% in the 
EU)  highlights  the  need  to  closely  monitor 
potential  labour  shortages,  particularly  in  sectors 
linked  to  the  transition  to  a  climate-neutral 
economy  such  as  construction  (6.2%  vacancy 
rate). 

As  for  the  social  dimension  of  the  green 
transition,  ensuring  access  to  essential 
transport  and  energy  services,  appears  less 
of a challenge overall in Slovenia. A relatively 
low  and  slightly  decreasing  share  of 
the 
population  in  rural  areas  is  at  risk  of  poverty 
(12.2% versus 18.5% in the EU). (41)  The share of 
the  population  unable  to  keep  their  homes 
adequately warm decreased from 5.6% in 2015 to 
2.8%  in  2020,  which  is  below  the  EU  average 
income  deciles  are 
(8.2%).  The  two 
affected  the  most,  while  around  4.4%  of  lower 
middle-income  groups  experience  energy  poverty 
(see  Figure  2).  Consumption  patterns  vary  across 
the  population  with  the  average  carbon  footprint 
of the top 10% of emitters being 5.3 times higher 
than  that  of  the  bottom  50%  of  the  population, 
the same level as the EU average. 

lowest 

(38)  SWD(2021) 275 final. 

(39)  There is currently no common EU-wide definition for green 
jobs. Accounts for the environmental goods and services 
sector  only report on an economic sector that generates 
environmental products, i.e. goods and services produced for 
environmental protection or resource management. 

(40)

https://publications.jrc.ec.europa.eu/repository/handle/J

RC126047 

(41)  Based on COM(2021) 568 final (Annex I) as a proxy for 

potential transport challenges in the context of the green 
transition (e.g. due to vulnerability to fuel prices). 

 
 
                                                 
                                                 
 
Graph A6.1: Fair green transition challenges 

Source: Eurostat 

Tax  systems  are  key  to  ensuring  a  fair 
transition  towards  climate  neutrality (42). 
Slovenia’s  revenues  from  total  environmental 
taxes  decreased  from  3.88%  of  GDP  in  2015  to 
3.34% in 2019, and further decreased to 2.95% in 
2020  (against  2.24%  in  the  EU).  The  labour  tax 
wedge for low-income earners (43)  increased from 
35%  to  37.2%  between  2015  and  2019  and  to 
39.5% in 2021, compared to 31.9% in the EU (see 
Annex 17). Redistributive measures accompanying 
environmental  taxation  have  the  potential  to 
foster  progressive  measures  and  lead  to  positive 
impacts  on  the  disposable  income  of  households, 
in  particular  those  at  the  lowest  levels  of  the 
income distribution (44). 

Graph A6.2: Energy poverty by income decile 

Source: Eurostat 

(42)  COM(2021) 801 final. 

(43)  Tax wedge for a single earner at 50% of the national 
average wage (Tax and benefits database, European  
Commission/OECD). 

(44)  SWD(2021) 641 final PART 3/3. 

33 

0.000.501.001.502.00GHG tonnes per Euroof gross added value(MS/EU)GHG tonnes perworker (MS/EU)Employment share inenergy-intensiveindustries (MS/EU)Share of populationin rural areas at riskof poverty (MS/EU)Energy poverty(MS/EU)Carbon inequality(MS/EU)SloveniaSlovenia 20150%5%10%15%20%25%12345678910Unable to keep home adequately warm (per income decile)Income decileSloveniaEuropean Union 
  
  
                                                 
  
PRODUCTIVITY 
ANNEX 7: RESOURCE EFFICIENCY AND PRODUCTIVITY 

while 

minimizing 

The  efficient  use  of  resources  is  key  to 
ensuring  competitiveness  and open strategic 
autonomy, 
the 
environmental  impact.  The  green  transition 
presents  a  major  opportunity  for  European 
industry 
clean 
creating  markets 
technologies  and  products.  It  will  have  an  impact 
across  the  entire  value  chain  in  sectors  such  as 
energy and transport, construction and renovation, 
food  and  electronics,  helping  create  sustainable, 
local and well-paid jobs across Europe. 

for 

by 

while 

minimising 

The  efficient  use  of  resources  is  key  to 
ensuring  competitiveness  and open strategic 
the 
autonomy, 
environmental  impact.  The  green  transition 
presents  a  major  opportunity  for  European 
industry 
clean 
creating  markets 
technologies  and  products.  It  will  have  an  impact 
across  the  entire  value  chains  in  sectors  such  as 
energy and transport, construction and renovation, 
food  and  electronics,  helping  create  sustainable, 
local and well-paid jobs across Europe. 

for 

by 

Slovenia  among  only  8  Member  States  that 
achieved  recycling  rates  of  over  50%,  well  above 
the EU average of 48%. In 2018, hazardous waste 
was  only  2%  of  total  waste  generated.  The 
amount  of  the  waste  landfilled  dropped  from  52 
kg/capita in 2019 to 33 kg/capita in 2020 (46).  

in 

an 

average 

In  2021,  Slovenia  ranked  12th  on  the  2021 
Eco-Innovation Index, with a total score of 113, 
resulting 
eco-innovation 
performance. In one out of five components (eco-
innovation  inputs),  Slovenia  performed  above  the 
EU average. However, its performance is below the 
EU  average  for  eco-innovation  activities,  eco 
innovation  outputs,  resource  efficiency  outcomes 
and socio-economic outfits.  

The  data  on  private  investment  in  circular 
economy is not publicly available. The number 
of  people  employed  in  circular  economy  related 
jobs  has  slightly  decreased  (from  2.06%  of  total 
employment to 2.02%).  

With  an  increase  in  its  circularity  rate, 
Slovenia  is  now  on  track  towards  reaching 
the  EU  average  when  it  comes  to  secondary 
material  usage.  The  circularity  rate  in  Slovenia 
increased by 40% between 2015 and 2020 (from 
8.6% to 12.3%), bringing the country close to the 
EU  average  of  12.8%. 
It  demonstrates  that 
Slovenia  overall  has  a  well-functioning  waste 
management  system  with  advanced  rates  of 
separate collection and a high recycling rate.  

With  fluctuating  resource  productivity  over 
recent  years,  Slovenia  still  performs  below 
the EU average.  Slovenia’s resource productivity 
reached  EUR  1.99  purchasing  power  standards 
(PPS)  per  kg  in  2020  (compared  to  EUR  2.23  PPS 
per  kg  for  the  EU-27),  which  leaves  room  for 
improvement  when  it  comes  to  the  country’s 
ability to catch the value of its material resource. 

On  waste  generation,  the  amount  of  waste 
generated 
increased  from  2 661  kg  per 
capita in 2016 to 3 964 in 2018, which is still 
below  the  EU  average.  On  the  other  hand,  the 
percentage  of  recycled  waste  rose  steadily  from 
54.1%  in  2015  to  59.3%  in  2020 (45),putting 

(45)  Source: Statistics | Eurostat (europa.eu) 

(46)  Source: Statistics | Eurostat (europa.eu) 

34 

 
 
 
                                                 
                                                 
Graph A7.1:  Economic importance and expansion of the circular economy – employment and value added 
in the circular economy sectors 

2,5%

2,0%

1,5%

1,0%

0,5%

0,0%

1,72%

0,94%

1,73%

0,94%

1,75%

0,96%

1,71%

0,97%

2,17%

1,30%

2,09%

1,31%

2,06%

1,30%

2,02%

1,26%

2015

2016

2017

2018

Persons employed in the circular economy, SI (% of total employment)
Value added at factor cost, SI (% of GDP )
Persons employed in the circular economy, EU27 (% of total employment)
Value added at factor cost, EU27 (% of GDP )

Source: Eurostat 

Table A7.1: Selected resource efficiency indicators 

Source: Eurostat 

35 

SUB-POLICY AREA201520162017201820192020EU27 CircularityResource Productivity (Purchasing power standard (PPS) per kilogram)1.71.81.91.82.02.02.2Material Intensity (kg/EUR)0.60.50.50.50.50.50.4Circular Material Use Rate (%)8.68.79.810.011.412.312.8Material footprint (Tones/capita)15.414.615.416.515.4-14.6Waste Waste generation (kg/capita, total waste)-2661-3964--5234Landfilling (% of total waste treated)-6.9-3.7--38.5Recycling rate (% of municipal waste)54.155.657.858.959.259.347.8Hazardous waste (% of municipal waste)-2.2-1.6--CompetitivenessGross value added in environmental goods and services sector (% of GDP)1.61.71.61.61.6-2.3Private investment in circular economy (% of GDP)------0.1Key indicators - Slovenia 
 
 
 
  
 
ANNEX 8: DIGITAL TRANSITION 

The Digital Economy and Society Index (DESI) 
digital 
monitors  EU  Member  States’ 
progress. The areas of human capital, digital 
connectivity,  the 
integration  of  digital 
technologies by businesses and digital public 
services  reflect  the  Digital  Decade  cardinal 
points (47).  This  annex  describes  Slovenia’s  DESI 
performance. 

Slovenia’s RRP has a digital share of 21.5%. 
The largest contributions to this share come from 
the  digitalisation  of  public  services,  healthcare, 
skills  development,  the  education  system,  and 
businesses. 

In the human capital dimension, Slovenia has 
a  solid  performance.  It  is  close  to  the  EU 
average  for  basic  digital  skills  and  female  ICT 
specialists  and  scores  just  above  the  EU  average 
on the indicator for ICT specialists in employment. 

In  digital  connectivity,  Slovenia  shows  a 
mixed  performance.  The  country’s  Very  High 
Capacity  Network  coverage  is  above  the  EU 
average,  and  5G  deployment  stands  at  37%,  SI 
scores  below  the  EU  average  for  digital  public 
services for citizens.  

In  the  integration  of  digital  technology, 
Slovenia  has  a  solid  score.  The  country 
performs around the EU average for SMEs with at 
least  a  basic  level  of  digital  skills  and  above  the 
EU  average  for  cloud  services  and  artificial 
intelligence.  However,  it  falls  short  on  the  use  of 
big data analysis. 

In  digital  public  services,  Slovenia  shows  a 
good  penetration  level.  It  scores  below  the  EU 
average  for  digital  public  services  for  citizens, 
while it surpasses it for digital public services for 
businesses. 

(47)  2030 Digital Compass: the European Way for the Digital 

Decade Communication, COM (2021) 118 final 

36 

 
 
                                                 
 
Table A8.1:   Key Digital Economy and Society Index Indicators 

(*) The 5G coverage indicator does not measure users’ experience, which may be affected by a variety of factors such as the type 
of device used, environmental conditions, number of concurrent users and network capacity. 5G coverage refers to the percentage 
of populated areas as reported by operators and national regulatory authorities. 
Source:  Digital Economy and Society Index 

37 

EUEU top-performanceHuman capitalDESI 2020DESI 2021DESI 2022DESI 2022DESI 2022At least basic digital skillsNANA50%54%79%% individuals202120212021ICT specialists3.9%4.4%4.8%4.5%8.0%% individuals in employment aged 15-7420192020202120212021Female ICT specialists20%17%17%19%28%% ICT specialists20192020202120212021ConnectivityFixed Very High Capacity Network (VHCN) coverage64%66%72%70%100%% households201920202021202120215G coverageNA0%37%66%99.7%% populated areas2020202120212021Integration of digital technologySMEs with at least a basic level of digital intensityNANA55%55%86%% SMEs202120212021Big data10%7%7%14%31%% enterprises20182020202020202020CloudNANA38%34%69%% enterprises202120212021Artificial IntelligenceNANA12%8%24%% enterprises202120212021Digital public servicesDigital public services for citizensNANA6975100Score (0 to 100)202120212021Digital public services for businessesNANA8482100Score (0 to 100)202120212021Slovenia 
 
 
 
 
 
 
ANNEX 9: INNOVATION 

This  annex  provides  a  general  overview  on 
the  performance  of  the  Slovenian  research 
and  innovation  system.  Slovenia  remains  a 
‘moderate  innovation  performer’  according  to  the 
Innovation 
2021  edition  of 
Scoreboard (48), even though it managed to reverse 
the decreasing trend it experienced between 2012 
and  2019.  Total  R&D  intensity  reached  2.15%  of 
GDP in 2020.   

the  European 

While  business  R&D  intensity  is  on  par  with 
the  EU  average,  low  public  investment  in 
R&D  continues  to  weigh  on  the  performance 
of  the  R&D  system.  Public  R&D  expenditure  of 
0.56%  of  GDP  in  2020  is  still  well  below  the  1% 
national  target  and  the  EU  average  (0.78%  of 
GDP).  Scientific  excellence,  as  reflected  in  the 
share  of  the  country’s  scientific  publications  that 
are among the top 10% most cited worldwide, has 
improved  over  the  last  decade  but  is  still  below 
the  EU  average.  The  overall  quality  of  the  R&D 
system  especially the measurable  output  remains 
weak,  as  evidenced,  for  instance,  by  the  low  and 
declining number of patent applications. As part of 
Slovenia’s  recovery  and  resilience  plan,  a  revision 
of  the  law  on  research  and  innovation  was 
adopted 
important 
in  November  2021.  An 
objective  of  this  major  reform  is  to  gradually 
increase public R&D spending to 1% of GDP. 

Slovenian  SMEs  have 
limited  access  to 
financing  during  their  scale-up  stage.  Even 
though  venture  capital  investments  in  Slovenia 
increased  to  0.005%  of  the  GDP  in  2020,  this  is 
still  among  the  lowest  across  the  EU  and  only  a 
tenth  of  the  EU  average  of  0.054%.  Early-stage 
innovative  SMEs  rely  on  government  and  EU 
grants for support and face difficulties scaling up. 
investment-
This 
innovation  and 
intensive 
manufacturing. 

disproportionately 
sectors 

such  as 

affects 

(48) 2021 European Innovation Scoreboard, Country profile: 

Slovenia 
https://ec.europa.eu/docsroom/documents/45935/attachment
s/1/translations/en/renditions/native  

38 

 
 
                                                 
Table A9.1:  Key research, development and innovation indicators 

Data: Eurostat, OECD, DG JRC, Science-Metrix (Scopus database and EPO’s Patent Statistical database), Invest Europe 
Sources:  DG Research and Innovation - Common R&I Strategy and Foresight Service - Chief Economist Unit  

39 

CompoundEUannual growthaverage2010-20R&D Intensity (GERD as % of GDP)2.052.21.952.052.15-1.32.32Public expenditure on R&D as % of GDP0.660.520.50.520.56-1.30.78Business enterprise expenditure on R&D (BERD) as % of GDP1.391.671.441.511.57-1.41.53Scientific publications of the country within the top 10% most cited publications worldwide as % of total publications of the country 6.37.37.8::2.79.9PCT patent applications per billion GDP (in PPS)3.22.12.5::-3.33.5Public-private scientific co-publications as % of total publications8.410.08.78.79.81.69.05New graduates in science & engineering per thousand pop. aged 25-3413.514.615.515.3:0.516.3Total public sector support for BERD as % of GDP0.2880.2280.2230.251:-4.10.196R&D tax incentives: foregone revenues as % of GDP0.0510.120.0990.099:7.60.100Share of environment-related patents in total patent applications filed under PCT (%)10.08.611.1::1.412.8Venture Capital (market statistics) as % of GDP0.0010.0090.0050.0020.00512.90.054Employment in fast-growing enterprises in 50% most innovative sectors2.93.26.55.9:8.35.5Finance for innovation and Economic renewalKey indicators Quality of the R&I systemAcademia-business cooperationHuman capital and skills availabilityPublic support for business enterprise expenditure on R&D (BERD)Green innovation 2020Slovenia2010201520182019 
 
 
  
 
 
ANNEX 10: INDUSTRY AND THE SINGLE MARKET 

prosperity,  well-being 

Productivity  growth  is  a  critical  driver  of 
and 
economic 
convergence over the long run. A major source 
of  productivity  for  the  EU  economy  is  a  well-
functioning Single Market, where fair and effective 
competition  and  a  business  friendly  environment 
are  ensured, 
in  which  Small  and  Medium 
Enterprises  (SMEs)  can  operate  and  innovate 
without  difficulty.  Businesses  and  industry  rely 
heavily  on  robust  supply  chains  and  are  facing 
bottlenecks that bear a negative impact on firms’ 
productivity 
levels,  employment,  turnover  and 
entry-exit  rates.  This  may  impact  the  Member 
State’s  capacity  to  deliver  on  Europe’s  green  and 
digital transformation. 

three-quarters  of 

is  an  export-oriented  economy 
Slovenia 
highly integrated into the single market  with 
around 
its  goods  exports 
destined for the EU market. For inputs the country 
relies  slightly  less  than  the  EU  average  on 
domestic and extra-EU sources in value added and 
more  on  the  single  market.  Slovenia’s  trade 
integration  is  also  above  the  EU  average.  This  is 
shown  by  the  ratio  of  intra-  to  extra-EU  trade, 
which stood at 1.93  in 2021, compared to the EU 
average  of  1.59.  However,  this  value  decreased 
from  2.47  in  2017.  Slovenia  has  significantly 
reduced the number of regulated professions, but 
progress has slowed down in recent years and the 
Member  State  is  more  restrictive  than  the  EU 
average  regarding  the  following  professional 
services: civil engineers, architects, lawyers, tourist 
guides and real estate agents.  

the  declining  productivity  growth 

The  low  level  of  investment  was  a  key  factor 
behind 
in 
Slovenia  even  before  the  COVID-19  epidemic. 
While  public  investments  were  driven  by  the 
uptake  of  EU  funds,  business  investment  faces  a 
slow  decline,  partly  explained  by  the  restrictive 
business  environment,  the  large  presence  of  the 
State  in  the  economy  and  an  underdeveloped 
venture capital market.  

The  business  environment  has 
improved, 
although progress has slowed down recently. 
Slovenia’s  recovery  and  resilience  plan  (RRP) 
tackles  administrative  burdens  and  regulatory 
restrictions.  These  are  the  biggest  obstacles  for 
companies 
2020 
Eurobarometer (49).  Late  payments  also  constitute 
a key barrier to SME resilience and growth (42% of 

according 

the 

to 

SMEs  experienced  payment  delays  in  the  last  6 
months  vs  35%  for  the  EU)  and  they  were  the 
second  biggest  barrier  for  SMEs  and  start-ups. 
Access  to  finance,  especially  for  SMEs,  remains  a 
challenge,  with  financing  being  heavily  skewed 
towards loans as the equity market in Slovenia is 
still  underdeveloped  (0.05  compared  to  the  EU 
average  of  0.18).  To  make  the  financial  market 
more  resilient,  the  equity  market  should  play  a 
greater role  and Slovenia’s RRP includes a reform 
to  support  the  development  of  better-tailored 
financial  instruments  to  boost  productivity  and 
investments  of  companies.  Competition  in  public 
procurement  remains  an  issue.  Slovenia  has  a 
comparatively high number of single bids in tender 
processes  and  a  high  proportion  of  procurement 
procedures  that  were  negotiated  with  a  company 
without  any  call  for  bids. (50)  To  address  these 
challenges,  the  Slovenian  RRP  sets  out  measures 
to 
in  public 
procurement,  ii)  its  digital  transformation  and  iii) 
the  professionalization  of  stakeholders.  Public 
procurement  bids  and  contracts  from  SMEs  have 
slightly  increased  (1.4%  and  1.3%,  respectively) 
exceeding the EU average values. 

competition 

increase 

the 

I) 

the 

dynamics.  However, 

The  Slovenian  economy  has  been  relatively 
less  affected  overall  by  global  supply  chain 
disruptions.  As  a  small,  open  economy,  Slovenia 
remains vulnerable to the continued uncertainty at 
global  level  and  a  further  decline  in  international 
economy’s 
trade 
diversification should make it relatively resilient to 
sector-specific  shocks.  Slovenia  relies  slightly less 
on extra-EU imports and is slightly less dependent 
on key raw materials than the EU average. “Import 
concentration of a basket of critical raw materials” 
is  at  16%  for  Slovenia  compared  with  an  EU 
average  of  17%.  This  is  partly  explained  by  the 
low  share  of  manufacturing  in  its  economy.  A 
shrinking  working  age  population  and  weak 
participation of older workers in the labour market 
pose  a  challenge  for  30%  of  firms  (vs  an  EU 
average  of  14%).  The  solvency  of  Slovenian 
companies did not deteriorate in 2020 and 2021, 
but  there  is  a  risk  that  the  number  of  insolvent 
businesses will increase after all the measures to 
soften  the  impact  of  COVID_19  expire  and  the 
share  of  the  most  problematic  over-indebted  and 
zombie companies will rise. (51)  

(50)  https://single-market-

scoreboard.ec.europa.eu/policy_areas/public-procurement_en 

(49)  Flash Eurobarometer 486 

(51)  IMAD Productivity report 2021 

40 

 
 
                                                 
                                                 
the 

in  monitoring 

Slovenia’s  transposition  of  directives 
is 
below  average,  which  shows  that  it  may  have 
some  difficulties 
timely 
transposition  of  directives.  With  12  directives 
presumed  to  have  been  incorrectly  transposed, 
Slovenia is one  of eight Member States that show 
a combination of a high transposition deficit and a 
high  percentage  of 
transposed 
directives. Regarding infringements, Slovenia is no 
longer  in  the  top  10  Member  States  with  the 
lowest  number  of  infringement  cases  but  is 
currently at the EU average of pending cases. (52) 

incorrectly 

(52)  https://single-market-

scoreboard.ec.europa.eu/countries/slovenia_en 

41 

 
 
                                                 
Table A10.1 Key Single Market and Industry Indicators 

 (*) latest available 
Source: See above in the table the respective source for each indicator in the column “Description”  

42 

SUB-POLICY AREAINDICATOR NAMEDESCRIPTION20212020201920182017Growth ratesEU27 average*Value added by source (domestic)VA that depends on domestic intermediate inputs, % [source: OECD (TiVA), 2018]58.9462.6%Value added by source (EU)VA imported from the rest of the EU, % [source: OECD (TiVA), 2018]24.6619.7%Value added by source (extra-EU)% VA imported from the rest of the world, % [source: OECD (TiVA), 2018]16.417.6%Cost competitivenessProducer energy price (industry)Index (2015=100) [source: Eurostat, sts_inppd_a]115.6113.5108.796.593.1#####127.3Material Shortage using survey dataAverage (across sectors) of firms facing constraints, % [source: ECFIN CBS]27891410170%26%Labour Shortage using survey dataAverage (across sectors) of firms facing constraints, % [source: ECFIN CBS]30203638293%14%Sectoral producer pricesAverage (across sectors), 2021 compared to 2020 and 2019, index [source:Eurostat]4.8%5.4%Concentration in selected raw materialsImport concentration a basket of critical raw materials, index [source: COMEXT]0.160.170.170.160.17-6%17%Installed renewables electricity capacity Share of renewable electricity to total capacity, % [source:Eurostat, nrg_inf_epc]36.536.536.538.6-5%Net Private investmentsChange in private capital stock, net of depreciation, % GDP [source: Ameco]-2.10-0.6-1.450.0%2.6%Net Public investmentsChange in public capital stock, net of depreciation, % GDP [source: Ameco]1.41.31.10.4250%0.4%Single Market integrationIntra-EU tradeRatio of Intra-EU trade to Extra-EU trade, index [source: Ameco]1.931.712.042.382.47-22%2.00Professional services restrictivenessRegulatory restrictiveness indicatorRestrictiveness of access to and exercise of regulated professions (professions with above median restrictiveness, out of the 7 professions analysed in SWD (2021)185 [source: SWD (2021)185; SWD(2016)436 final])4   3#####3.37Professional qualifications recognitionRecognition decisions w/o compensationProfessionals qualified in another EU MS applying to host MS, % over total decisions taken by host MS [source: Regulated professions database]45%Transposition - overall5 sub-indicators, sum of scores [source: Single Market Scoreboard]Below averageAboveOn averageOn averageInfringements - overall4 sub-indicators, sum of scores [source: Single Market Scoreboard]On averageOn averageOn averageOn averageInvestment protectionConfidence in investment protectionCompanies confident that their investment is protected by the law and courts of MS if something goes wrong, % of all firms surveyed [source: Flash Eurobarometer 504]6856%BankruptciesIndex (2015=100) [source: Eurostat, sts_rb_a]n.a.n.a.n.a.n.a.n.a.n.a.70.1 (2020)Business registrationsIndex (2015=100) [source: Eurostat, sts_rb_a]n.a.n.a.n.a.n.a.n.a.n.a.105.6Late paymentsShare of SMEs experiencing late payments in past 6 months, % [source: SAFE]41.249.238.8n.a.n.a.6.1%45%EIF Access to finance index - LoanComposite: SME external financing over last 6 months, index from 0 to 1 (the higher the better) [source: EIF SME Access to Finance Index]0.530.880.820.81-34.3%0.56 (2020)EIF Access to finance index - EquityComposite: VC/GDP, IPO/GDP, SMEs using equity, index from 0 to 1 (the higher the better) [source: EIF SME Access to Finance Index]0.050.080.180.11-54.2%0.18 (2020)% of rejected or refused loansSMEs whose bank loans’ applications were refused or rejected, % [source: SAFE]15.78.616.49.311.635.1%12.4%SME contractorsContractors which are SMEs, % of total [source: Single Market Scoreboard]787778771.3%63%SME bidsBids from SMEs, % of total [source: Single Market Scoreboard]747475731.4%70.8%Business demographyAccess to financeBUSINESS ENVIRONMENT - SMEsPublic procurement Investment dynamicsSINGLE MARKETCompliance - cooperation EC and MS73HEADLINE INDICATORSEconomic structureRESILIENCEShortages/supply chain disruptionsStrategic dependencies 
 
 
 
 
ANNEX 11: PUBLIC ADMINISTRATION 

capacity 

administrative 

Good 
enables 
economic  prosperity,  social  progress  and 
fairness. Public administrations at all government 
levels deliver crisis response, ensure the provision 
of  public  services  and  contribute  to  building 
resilience  for  the  sustainable  development  of  the 
EU economy.  

is 

open 

Policymaking 

Overall, the public administration in Slovenia 
is  effective,  ranking  around  the  EU-27 
average. (53) 
and 
transparent. However, the use of regulatory impact 
assessments and ex posts evaluation needs to be 
strengthened (graph A10.1). Recent changes to the 
Rules  of  Procedure  of  the  Government (54)  aim  to 
improve  public  consultations  by  providing  written 
feedback  for  public  input  in  the  law-making 
process.  The  government  has  drawn  up  an  action 
plan  to  improve  the  planning,  preparation  and 
adoption  of  legislation,  as  well  as  its  evaluation. 
Moreover,  the  country’s  recovery  and  resilience 
regulatory 
legislative 
plan 
simplification 
business 
improve 
environment. 

and 
the 

envisages 

to 

Graph A11.1: Performance on evidence-based 
policy making indicators 

RIA: Regulatory Impact Assessment 
Source: OECD (iREG indicators) 

(53)  Worldwide Governance Indicators, 2020.  

warrant 

attention. 

Certain  areas  of  Slovenia’s  public  financial 
Its 
management 
performance  on  the  Single  Market  Scoreboard’s 
public procurement indicator has traditionally been 
weak.  This  is  due  primarily  to  poor  scores  in 
measures  of  transparency  and  competition  in 
procurement  (Graph  A10.2):  reforms  in  Slovenia’s 
recovery  and 
to 
resilience  plan 
contribute  towards  a  more  effective  and  efficient 
public  procurement  system 
in 
particular  by  improving  competition.  In  addition, 
performance  on  the  strength  of  the  fiscal  rules 
index is below the average. 

in  Slovenia, 

(RRP)  aim 

Graph A11.2: Performance on the single market 
public procurement indicator 

The competition and transparency indicators are triple-
weighted, whereas the efficiency and quality indicators have 
unitary weights. All others receive a 1/3 weighting in the SMS 
composite indicator. 
Source: Single Market Scoreboard 2020 data 

Difficulties  in  recruiting  staff  in  the  public 
administration  could  undermine  Slovenia’s 
administrative  capacity.  Slovenia  struggles  to 
attract  young  civil  servants.In  2020,  it  ranked  in 
the EU-27’s bottom third (28.8 %) (55) on the share 
of government employees under  39 years of age. 
Moreover, the  number  of applications  for top  civil 
service  positions  has  been  declining  in  general, 
from 4.71 applicants per position in 2015 to 2.61 
in 2019 (56). Slovenia’s recovery and resilience plan 
aims  to  launch  a  new  civil  service  management 
strategy  and  a  reform  of  the  civil  service 
legislation.  A  competence  centre  will  be  set  up  to 

(54)  Official Journal of the Republic of Slovenia, No. 51/2021 of 
2 April 2021, Amendments to the Rules of Procedure of the 
Government of the Republic of Slovenia 

 https://www.uradni-list.si/glasilo-uradni-list-rs/vsebina/2021-01-
0977/spremembe-in-dopolnitve-poslovnika-vlade-republike-
slovenije 

(55)  European Commission, Directorate-General for Structural 
Reform Support, Public administration and governance: 
"European Public Administration Country Knowledge, Country 
brief 2021, Slovenia", Publications Office, 2022. 

(56)  According to the 2020 Annual Report of the Civil Servants' 

Council, available in Slovenian. 

43 

SloveniaCompetition & TransparencyEfficiency & QualitySingle bidderCooperative procurementNo calls for bidsAward criteriaPublication rateDecision speedSME ParticipationData QualitySME contractorsMissing call for bidsSME bidsMissing seller registration #Procurement by lotsMissing buyer registration # 
 
 
                                                 
 
                                                 
training  for  staff  and 

provide 
introduce  a 
standardized  skills-assessment  system  for  public 
servants.  Slovenia  intends  to  improve  the  digital 
awareness  and  skills  of  civil  servants.  A  new 
public-sector wage system is expected to improve 
the quality of staffing and its performance.   

benchmark 

E-government 

The 
overall 
indicator  scores  below  the  EU  average. 
However,  77%  of  internet  users  actively  engage 
with  public  authorities  online  (an  increase  from 
62%  in  2017  and  above  the  EU  average  of 
70.7%).  Slovenia’s  recovery  and  resilience  plan 
aims  to  further  advance  the  digitalisation  of  the 
public administration and the public sector. 

The  justice  system  works  efficiently  overall, 
but  challenges  in  economic  and  financial 
crime court cases remain. As regards efficiency, 
the average length of proceedings at first instance 
courts  rose  to  around  20  months  in  litigious  civil 
cases  and  levelled  off  at  11  months  in  litigious 
commercial  cases.  Regarding  money  laundering 
offences,  the  length  of  trials  in  first  instance 
courts fell to 876 days in 2019 (down from 1 132 
days  in  2018),  on  average,  and  remains  among 
the highest in the EU. In 2020, the average length 
in  administrative  cases  at  first instance increased 
to  13.7  months.  As  regards  the  quality  of  the 
justice system, it has been continuously improving, 
although  the  electronic  communication  between 
courts and parties remains less developed and the 
Judicial Council and State Prosecutorial Council are 
experiencing  shortages  in  resources.  As  regards 
judicial  independence,  no  systemic  deficiencies 
have been reported. (57)  

(57)  For more detailed analysis of the performance of the justice 
system in Slovenia, see the 2022 EU Justice Scoreboard 
(forthcoming) and the country chapter for Slovenia in the 
Commission’s 2022 Rule of Law Report (forthcoming). 

44 

 
                                                 
Table A11.1:Public administration indicators – Slovenia 

 SI 

Indicator (1) 

E-government  

2017  2018  2019  2020  2021  EU27 

1 

Share of individuals who used internet within the last year to interact 
with public authorities (%) 

62,0 

67,0 

63,0 

77,0 

77,0 

70,8 

2 

E-government benchmark´s overall score (2)  

na 

na 

na 

na 

66.6 

70,9 

Open government and independent fiscal institutions 

3 

4 

2021 Open data maturity index 

na 

na 

na 

na 

91.6 

81,1 

Scope Index of Fiscal Institutions 

59,5 

59,5 

59,5 

59,5 

na 

56,8 

Educational attainment level, adult learning, gender parity and ageing 

5 

6 

7 

8 

Share of public administration employees with tertiary education 
levels 5-8 (3) 

62,7 

62,9 

68,0 

71,8 

73,4 

55,3 

Participation rate of public administration employees in adult 
learning  

19,8 

19,3 

18,2 

10,6 

28,9 

18,6 

Gender parity in senior civil service positions (4) 

14,0 

12,2 

14,8 

14,6 

14,2 

21,8 

Share of public sector workers between 55 and 74 years (3) 

16,3 

20,4 

18,5 

20,3 

21,3 

21,3 

Public Financial Management  

9  Medium term budgetary framework index 

0,82 

0,82 

0,82 

0,82 

10  Strength of fiscal rules index 

0,5 

0,5 

0,5 

0,5 

11  Public procurement composite indicator 

-3,7 

-4,0 

-4,0 

-4,0 

na 

na 

na 

0,72 

1,5 

-0,7 

Evidence-based policy making 

12 

Index of regulatory policy and governance practices in the areas of 
stakeholder engagement, Regulatory Impact Assessment (RIA) and ex 
post evaluation of legislation 

1,53 

na 

na 

1,52 

na 

1,7 

(1) High values stand for good performance barring indicators # 7 and 8. 
(2) Measures the user centricity (including for cross-border services) and transparency of digital public services as well 
as the existence of key enablers for the provision of those services. 
(3) Break in the series in 2021. 
(4) Defined as the absolute value of the difference between the share of men and women in senior civil service 
positions. 

Source:   ICT use survey, Eurostat (# 1); E-government benchmark report (# 2); Open data maturity report (# 3); Fiscal Governance 
Database (# 4, 9, 10); Labour Force Survey, Eurostat (# 5, 6, 8), European Institute for Gender Equality (# 7), Single Market 
Scoreboard public procurement composite indicator (# 11); OECD Indicators of Regulatory Policy and Governance (# 12). 

45 

 
 
 
 
  
  
  
  
  
  
  
 
 
FAIRNESS 
ANNEX 12: EMPLOYMENT, SKILLS AND SOCIAL POLICY CHALLENGES IN LIGHT OF 
THE EUROPEAN PILLAR OF SOCIAL RIGHTS  

The European Pillar of Social Rights provides 
for  upward  convergence 
the  compass 
towards better working and living  conditions 
in the EU. The implementation of its 20 principles 
on  equal  opportunities  and  access  to  the  labour 
market,  fair  working  conditions,  social  protection 
and inclusion, supported by the 2030 EU headline 
targets  on  employment,  skills  and  poverty 
reduction, will strengthen the EU’s drive towards a 
digital,  green  and  fair  transition.  This  annex 
provides  an  overview  of  Slovenia’s  progress  in 
achieving  the  goals  under  the  European  Pillar  of 
Social Rights. 

in 

The  labour  market  in  Slovenia  is  recovering 
strongly  as  illustrated  by  rising  employment 
and  falling  unemployment  rates.  Following  a 
drop  from  75.9%  in  2019  to  74.8%  in  2020,  the 
employment rate recovered to 76.1% in Q4-2021, 
well  above  the  EU  average  (73.6%).  However, 
some  long-term  structural  challenges  persist.  The 
share of young people in precarious forms of work 
(i.e.  fixed-term  contracts  or  temporary  agency 
work)  in  Slovenia  remains  among  the  highest  in 
the  EU  and  higher  than  for  other  age  groups (58). 
The  low  employment  and  activity  rates  of  older 
workers,  and  in  particular  those  with  lower  skills 
levels, remain a challenge. Labour shortages have 
increased recently with a high share of employers 
reporting  shortages 
the  construction  and 
information  and  communication  sectors  in  2020 
(4%  and  3%,  respectively).  As  part  of  Slovenia’s 
recovery and resilience plan (RRP), the investment 
in  an  online  platform  providing  information  (e.g. 
model  contracts)  and  advice  for  employers  and 
workers is expected to help promote more flexible 
working  arrangements,  especially  for  small  and 
medium-sized enterprises. Another measure seeks 
to  incentivise  employers  to  hire  young  people 
under open-ended contracts. Other actions set out 
in the plan include adapting working environments 
to  the  needs  of  people  with  disabilities  and 
providing training and education to employees are 
other actions set out in the plan. Slovenia uses the 
support it receives from the European Social Fund 
to  increase  access  to  employment  and  activation 
measures,  in  particular  for  young  people,  people 
who  have  been  long-term  unemployed  and  other 

(58)  IMAD (2021), Development Report, 2021 

(https://www.umar.gov.si/fileadmin/user_upload/razvoj_slove
nije/2021/angleski/POR2021_eng.pdf). 

vulnerable  groups.  The  quality  of  social  dialogue 
between  employers  and  trade  unions  under  the 
tripartite industrial  relations council  has worsened 
recently and requires attention. 

Table A12.1: Social Scoreboard for Slovenia 

Update of 29 April 2022. Members States are classified on 
the Social Scoreboard according to a statistical methodology 
agreed with the EMCO and SPC Committees. It looks jointly at 
levels and changes of the indicators in comparison with the 
respective EU averages and classifies Member States in seven 
categories. For methodological details, please consult the 
Joint Employment Report 2022. Due to changes in the 
definition of the individuals' level of digital skills in 2021, 
exceptionally only levels are used in the assessment of this 
indicator; NEET: neither in employment nor in education and 
training; GDHI: gross disposable household income. 

Educational performance is good overall, but 
major  gaps  between genders and  native  and 
foreign-born people persist.  In 2021, the early 
school  leaving  rate  of  foreign  non  EU-born  pupils 
is  lower  than  the  EU  average  (6%  compared  to 
21.6%),  but  almost  double  the  national  average 
(3.1%).  New  measures  entered  into  force  to 
support  migrant  and  Roma  pupils  in  pre-primary 
and  compulsory  education;  close  monitoring  is 
needed  to  ensure  that  the  intended  results  are 
achieved (see Annex 13). In 2021, the gender gap 

46 

3.150.07.36.73.376.14.82.0114.714.312.144.621.74.444.32.7Critical situationTo watchWeak but improvingGood but to monitorOn averageSocial Scoreboard for SLOVENIAEqual opportunities and access to the labour marketEarly leavers from education and training(% of population aged 18-24) (2021)Youth NEET(% of total population aged 15-29) (2021)Gender employment gap (percentage points) (2021)Income quintile ratio (S80/S20) (2020)Individuals' level of digital skills (% of population 16-74) (2021)Dynamic labour markets and fair working conditionsSocial protection and inclusionBetter than averageAt risk of poverty or social exclusion (in %) (2020)Employment rate(% population aged 20-64) (2021)Unemployment rate(% population aged 15-74) (2021)Long term unemployment(% population aged 15-74) (2021)GDHI per capita growth (2008=100) (2020)Best performersImpact of social transfers (other than pensions) on poverty reduction (% reduction of AROP) (2020)Children aged less than 3 years in formal childcare (% of under 3-years-olds) (2020)Self-reported unmet need for medical care (% of population 16+) (2020)Housing cost overburden (% of population) (2020)At risk of poverty or social exclusion for children (in %) (2020)Disability employment gap (ratio) (2020) 
 
 
                                                 
 
  
 
in the tertiary educational attainment of 25 to 34-
year-olds stood at 23.6 pps, compared to 11.1 pps 
in the EU. There is also a 26 pps gap between the 
native-born  population  and  the  foreign  non  EU-
born (see Annex 13). Adult participation in learning 
(over the past 4 weeks) fell by 2.8 pps to 8.4% in 
2020, which is below the EU average of 9.2%, and 
it  is  even  lower  among  older  (3.9%,  EU  average: 
4.8%)  and  low-skilled  persons  (1.7%,  EU  average: 
the 
3.4%).  Stepping  up  efforts 
relatively  low  educational  outcomes  of  students 
from  migrant  or  disadvantaged  backgrounds  and 
improving  the  outreach  to  low-skilled  and  older 
workers could help Slovenia contribute to reaching 
the  2030  EU  headline  targets  on  skills  and 
employment.  

to  address 

Slovenia  has  one  of  the  lowest  levels  of 
income 
inequality  and  lowest  shares  of 
people  at  risk  of  poverty  or  social  exclusion 
in the EU. The overall share of the population at 
risk  of  poverty  or  social  exclusion  risk  stood  at 
14.3% in 2020 (0.6 pps higher than in 2019), far 
below  the  EU  average  of  21.9%.  For  people  aged 
65 or over, the rate increased from 19.4% in 2016 
to 21% in 2020, slightly above the EU average of 
20.4%.  It  deteriorated  further  for  older  women 
(24.4%  in  2018  compared  to  the  EU  average  of 
20.9%),  which  may  point  to  challenges  for  social 
protection.  Housing  deprivation  is  higher  than  the 
EU average. Slovenia’s RRP addresses some of the 
key  social  challenges,  in  particular  those  linked 
with  access  to  healthcare  and  long-term  care 
while  ensuring  its  long-term  fiscal  sustainability 
(see  Annex  14).  The  adoption  of  parts  of  the 
relevant legislation on long-term care in December 
2021  is  a  major  step  towards  ensuring  that  the 
system can be better accessed and more resilient. 
The plan also aims to improve access to non-profit 
rental housing for young families, socially deprived 
individuals 
In 
and  marginalised 
combination with ESF+, further social policy action 
would allow Slovenia to contribute to reaching the 
2030 EU headline target on poverty reduction.  

groups. 

47 

 
 
foreign-born  student  population.  As  part  of  its 
recovery and resilience plan (RRP), the government 
has  proposed  measures  to  improve  the  labour 
market transition for young people and the labour 
market  relevance  of  vocational  education  and 
training. 

the 

improving 

Reforms  and  investments  planned  under  the 
Slovenia’s RRP cover all education levels. The 
reforms  and 
focused  on 
investments  are 
incorporating  digital  and  sustainable  development 
competences in modernised curricula for all levels 
labour  market 
of  education, 
relevance  of  education,  and  providing  better  data 
connections  for  educational  institutions.  Planned 
actions  include  promoting  vocational  education 
in  companies, 
and  training,  training  mentors 
strengthening  cooperation  between  schools  and 
employers  (in  particular  for  practical  skills  in 
health,  early  childhood  education  and  care,  and 
social  care), and developing a tracking application 
for vocational education and training graduates. 

Graph A13.1: Gaps in tertiary educational 
attainment rates, 2020 

ANNEX 13: EDUCATION AND SKILLS 

This  Annex  outlines  the  main  challenges  for 
Slovenia’s  education  and  training  system  in 
light of the EU-level targets of the European 
Education  Area  strategic  framework  and 
other  contextual  indicators,  based  on  the 
analysis  from  the  2021  Education  and 
Training  Monitor. While education  outcomes  are 
overall  good,  Slovenia’s  education  and  training 
system struggles with some equity challenges that 
risk being worsened due to the pandemic.  

the  EU-level 

is  well  below 

Despite good education outcomes overall, the 
Slovenian  education  system  struggles  with 
equity  challenges.  The  rate  of  early  school 
leaving 
target. 
Educational  outcomes,  as  measured  by  the  OECD 
Programme  for  International  Student  Assessment 
(PISA), are better than the EU average in all three 
subjects tested: mathematics, reading and science. 
However, the rate of early school leaving for non-
native  students  is  nearly  double  the  national 
average school leaving rate (see Annex 12). While 
the  percentage  of  students  with  a  migrant 
background  who  underachieve  in  reading  is  lower 
than the EU average, the gap  between native and 
foreign-born  students  remains  among  the  largest 
in the EU. The gap of 19 pps in underachievement 
between  socio-economically  advantaged  and 
disadvantaged  students  is  still  substantial.  The 
government  introduced  new  measures  to  support 
migrant  and  Roma  pupils  in  basic  schools  for  the 
academic year 2020/2021. The gender gap is also 
sizeable,  with  girls  significantly  outperforming 
boys  in  reading.  Furthermore,  there  are  warning 
signs of upcoming teacher shortages, especially in 
mathematics and technical subjects (59).  

Source: Eurostat 

There are further challenges related to gaps 
in  tertiary  education  attainment  rates  and 
the  falling  employment  rate  of  recent 
graduates  from  vocational  education  and 
training.  Enrolment  in  vocational  education  and 
training  was  the  highest  in  the  EU  in  2019, 
however,  the  employment  of  recent  graduates 
decreased  between  2018  and  2020  by  nearly  13 
pps.  The  impact  of  the  pandemic  is  likely  to 
worsen this trend. Tertiary educational attainment 
is  high  overall,  but  significant  gaps  remain 
between  genders  and  between  the  native  and 

(59)  Dolenc K., Šorgo A., & Ploj Virtič M. (2021). Signs of a 
Catastrophe: Predicted Shortage of Teachers of Lower 
Secondary Science and Technics and Technology in Slovenia 
. Journal of Elementary Education, 14(2), 239-256. 
https://doi.org/10.18690/rei.14.2.239-256.2021 

48 

 
 
                                                 
 
 
Table A13.1:EU-level targets and other contextual indicators under the European Education Area 
strategic framework 

2015 

2021 

Indicator 

Target 

Slovenia 

EU27 

Slovenia 

EU27 

Participation in early childhood education (age 3+) 

96% 

88.0% 

91.9% 

92.1% 

Reading 

< 15% 

15.1% 

20.4% 

17.9% 

Low achieving 15-year-olds in: 

Mathem
atics 

< 15% 

16.1% 

22.2% 

16.4% 

Science 

< 15% 

15.0% 

21.1% 

14.6% 

Total 

< 9 % 

By gender 

Early leavers from education and 
training (age 18-24) 

By degree of 
urbanisation 

By country of 
birth 

Men 

Women 

Cities 

Rural 
areas 

Native 

EU-born 

Non EU-
born 

5.0% 

11.0% 

6.4% 

12.5% 

3.4% 

9.4% 

4.6% 

9.6% 

4.8% 

12.2% 

4.3% 

10.0% 

: 

20.7% 

17.7% 

23.4% 

u 

u 

u 

u 

u 

3.1% 

4.2% 

1.9% 

2.7% 

2.9% 

2.9% 

: 

6.0% 

2

0

1

9 
2

0

1

8 
2

0

1

8 
2

0

1

8 

2

0

1

9 
2

0

1

8 
2

0

1

8 
2

0

1

8 

u 

u 

u 

u 

u 

u 

92.8% 

22.5% 

22.9% 

22.3% 

9.7% 

11.4% 

7.9% 

8.7% 

10.0% 

8.5% 

21.4% 

21.6% 

Total 

45% 

40.8% 

By gender 

Tertiary educational attainment (age 
25-34) 

By degree of 
urbanisation 

By country of 
birth 

Men 

Women 

Cities 

Rural 
areas 

Native 

EU-born 

Non EU-
born 

36.5% 

31.2% 

30.3% 

52.% 

41.8% 

46.5% 

46.2% 

39.1% 

26.9% 

42.6% 

37.7% 

28.6% 

32.7% 

17.9% 

27.0% 

u 

u 

47.9% 

41.2% 

37.2% 

35.7% 

60.8% 

46.8% 

57.9% 

51.4% 

45.8% 

29.6% 

50.2% 

42.1% 

57.9% 

40.7% 

24.3% 

34.7% 

Share of school teachers (ISCED 1-3) who are 50 years or over 

35.5% 

38.3% 

37.0% 

2

0

1
9 

38.9% 

2

0

1
9 

(1) The 2018 EU average on PISA reading performance does not include ES; u = low reliability, : = not available; Data is not yet available for 
the remaining EU-level targets under the European Education Area strategic framework, covering underachievement in digital skills, exposure 
of vocational education and training graduates to work based learning and participation of adults in learning. 
Source: Eurostat (UOE, LFS); OECD (PISA) 

49 

 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
 
  
 
  
  
  
 
  
 
  
  
  
 
  
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
ANNEX 14: HEALTH AND HEALTH SYSTEMS 

Especially  relevant  in  light  of  the  ongoing 
COVID-19 pandemic, resilient healthcare is a 
prerequisite  for  a  sustainable  economy  and 
society.  This  Annex  provides  a  snapshot  of  the 
healthcare sector in Slovenia. 

Life  expectancy  in  Slovenia  is  slightly  above 
the  EU  average,  but  fell  in  2020  by  a  year 
due  to  COVID-19.  By  17  April  2022,  3.13 
cumulative  COVID-19  deaths  per  1  000 
inhabitants and 476 confirmed cumulative COVID-
19 cases per 1 000 inhabitants had been reported. 
Slovenia  fares  comparatively  well  in  preventing 
deaths from treatable causes, but cancer mortality 
has been above the EU average. 

Graph A14.1: Life expectancy at birth, years 

81,2
80,9

81,2
80,9

81,6
81,3

81,5

81,

80,9
80,5

80,6
80,4

2015

2016

2017

2018

2019

2020

EU

Slovenia

Source: Eurostat 

of 

share 

health 

expenditure 

Health  spending  relative  to  GDP  in  Slovenia 
was  below the  EU  average  in  2019.  Spending 
on  prevention  is  also  below  the  EU  average.  The 
is 
public 
comparatively low and 95% of residents subject to 
out-of-pocket  payments  have  voluntary  health 
insurance.  With  an  ageing  population  that  suffers 
from  chronic  diseases,  public  expenditure  on 
health  is  projected  to  increase  by  1.5  percentage 
points (pps) of GDP by 2070 (compared to 0.9 pps 
for  the  EU),  raising  long-term  fiscal  sustainability 
concerns. 

Graph A14.2: Projected increase in public 
expenditure on healthcare over 2019-2070 
(reference scenario) 

Source: The 2021 Ageing Report: Economic and Budgetary 
Projections for the EU Member States (2019-2070), European 
Commission (Directorate-General for Economic and Financial 
Affairs) and Ageing Working Group (Economic Policy 
Committee) 

Long  waiting  times  for  publicly  funded 
services  are  the  main  factor  driving  unmet 
medical  needs.  This  is  linked  to  the  scarce 
availability  of  health  workforce  in  primary  care 
and in some specialist outpatient services.  

Through  its  recovery  and  resilience  plan 
(RRP),  Slovenia  plans  to  invest  EUR  224.9 
million in healthcare (9.1% of the total RRP)  to 
improve  the  communicable  diseases  hospital 
infrastructures,  the  digital  infrastructure  in  the 
health  sector  and  the  health  emergency  services. 
The  reform  of  the  financing  of  the  healthcare 
system 
is  expected  to  make  the  healthcare 
funding  mechanism  more  predictable  and 
financially  sustainable  in  the  long  term.  The  RRP 
should  promote  a  more  coherent  and  integrated 
service  delivery,  including  with  long-term  care 
structures. 

50 

 
 
 
 
 
Table A14.1: Key health indicators,  

Treatable  mortality  per  100  000  population 
(mortality  avoidable 
through  optimal  quality 
healthcare) 

2016 

2017 

2018 

2019 

2020 

EU average (latest year)  

79.6 

78.2 

77.4 

 72.0 

92.1 (2017) 

Cancer mortality per 100 000 population 

308.5 

304.8 

309.3 

290.1  

Current expenditure on health, % GDP  

8.5 

8.2 

8.3 

8.5 

Public  share  of  health  expenditure,  %  of  current 
health expenditure 

Spending  on  prevention,  %  of  current  health 
expenditure  

72.7 

72.2 

72.8 

72.8 

3.0 

3.0 

3.1 

3.2 

Acute care beds per 100 000 population 

418.9 

420.4 

413.4 

413.2 

Doctors per 1 000 population * 

Nurses per 1 000 population * 

3.0 

9.7 

3.1 

9.9 

3.2 

3.3 

10.1 

10.3 

252.5 (2017) 

9.9 (2019) 

79.5 (2018) 

2.8 (2018) 

387.4 (2019) 

3.8 (2018) 

8.2 (2018) 

Consumption of antibacterials for systemic use in the 
community, daily defined dose per 1 000 inhabitants 
per day ** 

11.5 

11.6 

11.7 

11.5 

8.9 

14.5 (2020) 

(1) Doctors' density data refer to practising doctors in all countries except for FI, EL, PT (licensed to practice) and SK 
(professionally active). Nurses' density data refer to practising nurses in all countries (data from 2014 for FI) except for IE, FR, PT, 
SK (professionally active) and EL (nurses working in hospitals only).  
More information: https://ec.europa.eu/health/state-health-eu/country-health-profiles_en 
Source: Data sources: Eurostat Database; except: * Eurostat Database and OECD, ** ECDC. 

51 

 
 
 
 
 
  
  
  
  
  
  
  
  
 
 
ANNEX 15: ECONOMIC AND SOCIAL PERFORMANCE AT REGIONAL LEVEL 

just below the national average. More than half of 
the other NUTS-3 regions showed stronger growth, 
with Gorenjska growing by almost 3% per year. On 
the  other  hand,  Zasavska  displayed  the  lowest 
growth between 2010 and 2019. 

Graph A15.2: Labour productivity (real gross value 
added GVA per worker), EU27, Slovenia (NUTS-2 
regions), 2000-2019 

is  an 

The  regional  dimension 
important 
factor  when  assessing  economic  and  social 
developments  in  Member  States.  Taking  into 
account  this  dimension  enables  a  well-calibrated 
and  targeted  policy  response  that  promotes 
cohesion  and  ensures  a  sustainable  and  resilient 
economic development across all regions. 

than 

better 

Eastern 

Regional  disparities  in  Slovenia  are  still 
prominent. Western Slovenia (Zahodna Slovenija) 
scores 
Slovenia 
(Vzhodna Slovenija) in several economic and social 
indicators.  The  differences  become  even  more 
pronounced  at  the  NUTS-3  and  lower  levels.  The 
gap  between  the  capital  region  and  the  other 
regions  is  still  very  wide,  which  hinders  the 
balanced development of the country.  

Graph A15.1: GDP per head (2010) and GDP growth 
(2010-2019) in Slovenia 

Source: Eurostat 

Source: Eurostat 

Convergence  is  progressing  despite  slower 
growth  in  certain  less  developed  regions.  In 
lagging  behind 
2019,  Eastern  Slovenia  was 
Western Slovenia in terms of GDP per head (73% 
and  106%  of  the  EU  average  respectively). 
Disparities  are  even  more  pronounced  at  the 
NUTS-3 level, with the GDP per head in the capital 
region  (125%  of  EU  average)  being  40%  higher 
than the national average and almost three times 
higher  than  that  of  the  poorest  region  (Zasavska, 
47%).  Growth  of  GDP  per  head  in  the  capital 
region was slightly higher than the EU average and 

Slovenia 

narrowed. 

The productivity growth in both of Slovenia’s 
NUTS-2  regions  is  above  the  EU  average.  In 
recent years, the productivity gap between Eastern 
and  Western 
Labour 
productivity  in  Eastern  Slovenia  grew  by  1.5% 
annually  between  2010  and  2019,  which  was 
faster than in Western Slovenia (1.1%) and the EU 
average 
real  growth 
productivity,  Eastern  Slovenia  performs  even 
better with an average annual growth of 1.65% as 
compared  to  1.2%  in  Western  Slovenia.  However, 
both regions still had a lower productivity than the 
EU average in 2018.  

terms  of 

(0.7%). 

In 

Slovenia  has  made  progress  towards  digital 
transformation. 
access 
broadband covers 88% of households, close to the 
is 
EU  average.  However, 

this  percentage 

generation 

Next 

Table A15.1: Slovenia, selected indicators at regional level – Slovenia 

Source: Eurostat, *EDGAR Database 

52 

1,01,11,21,31,41,51,61,71,81,95060708090100110120Annual real GDP per head growth 2010-2019GDP (PPS) per head in 2010 (EU = 100)Capital regionOther NUTS2 regionsNational averageEU27 
 
 
 
 
 
 
 
 
significantly  lower  in  rural  areas.  In  terms  of 
individuals  with  above  basic  overall  digital  skills, 
both  regions  are  moderate  performers.  77%  of 
Slovenian  internet  users  actively  engage  with  e-
government services compared to the EU average 
of  64%,  with  Western  Slovenia  having  a  higher 
number of users.   

Graph A15.3: Territories most affected by the 
climate transition in Slovenia (NUTS-3 level) 

low  level  of  public  sector  investment  and  lags 
behind  Western  Slovenia  on  several  innovation 
activities.  In  terms  of  regional  competitiveness, 
Western Slovenia performs above the EU average 
while  Eastern  Slovenia  performs  below  the  EU 
in  the 
average.  Western  Slovenia 
education dimension and innovation, while Eastern 
Slovenia  underperforms  its  peers  in  all  but  two 
sub-dimensions (basic and higher education). Both 
regions lag behind the EU average in infrastructure 
provision and market size.  

is  strong 

Graph A15.4: Social indicators by degree of 
urbanisation in Slovenia, 2020 

Source: Eurostat 

CO2  emissions  from  fossil  fuels  per  head  in 
Eastern Slovenia are above both the national 
and  EU  average.  For  Eastern  Slovenia  9.9  tCO2 
equivalent  were  registered  in  2018,  while  it  was 
6.2  for  Western  Slovenia.  The  increased  climate 
and  energy  targets  require  an  accelerated  phase-
out of one of the main sources of greenhouse gas 
emissions  - coal. The Zasavska region is enduring 
the  consequences  of  an  incomplete  transition 
away  from  coal-related  activities,  while  the 
Savinjska  region,  in  particular  Savinjsko-Šaleška, 
continues  to  suffer  from  significant  challenges 
linked to the on-going extraction and processing of 
fossil  fuels.  Both  coal  regions  are  targeted  in  the 
recently  adopted  National  Strategy  for  Exit  from 
Coal and Restructuring of Coal Regions in line with 
the principles of a just transition. They will benefit 
from the Just Transition Fund in 2021-2027.       

Slovenia’s 

Western  Slovenia  performs  better  than 
Eastern  Slovenia  in  innovation  and  regional 
competitiveness. 
innovation 
performance  compared  to  the  EU  has  decreased 
from  98%  in  2014  to  89%  in  2021.  Western 
Slovenia was a ‘strong innovator’ until 2019 and it 
still  performs  better 
than  Eastern  Slovenia. 
However,  both  regions  are  now  only  ‘Moderate 
innovators’. Eastern Slovenia is also marked with a 

Source: Eurostat 

rate 

indicators  for  Slovenia  show 
The  social 
consistent improvement and remained better 
than the EU average in 2020. Western Slovenia 
has a higher employment rate (77%) than Eastern 
is 
(74%).  The  unemployment 
Slovenia 
particularly low in the Western region (4.4%) while 
in  the  Eastern  region  it  is  slightly  higher  (5.5%). 
The  same  trend  can  be  observed  in  the  share  of 
people  at  risk  of  poverty  where  in  the  Western 
region it is 5 pps lower than in the Eastern region. 
The  share  of  early  school  leavers  in  both  regions 
(4.4%)  is  significantly  lower  than  the  EU  average 
(10.4%)  while  the  share  of  the  population 
attaining  a  higher  education  degree,  especially  in 
Western  Slovenia,  remains  high  (10%  above  EU 
average). There are also clear differences in terms 
of social indicators between urban and rural areas 
(see Graph 15.3). 

Both  regions  in  Slovenia  have  been  affected 
by  the  COVID-19  pandemic.  It  has  had  a 
negative 
impact  on  the  Slovenian  economy, 
leading  to  a  drop  in  GDP  per  head  by  4.2%  in 
Western Slovenia and by 3.9% in Eastern Slovenia 
in  2020  compared  to  2019. Furthermore,  the 
socioeconomic  consequences  differ  across  both 
regions. The  COVID-19  crisis  has  hit  the  trade, 

53 

 
 
 
hospitality  and  transport  sectors  the  hardest, 
in  Western  Slovenia  due  to  the 
particularly 
composition of its labour force. On the other hand, 
Eastern  Slovenia  has  been  more  negatively 
affected in terms of manufacturing activities.  

54 

 
MACROECONOMIC STABILITY 
ANNEX 16: KEY FINANCIAL SECTOR DEVELOPMENTS 

to 

requires 

the  banks 

loans,  which 

This  Annex  provides  an  overview  of  key 
developments  in  Slovenia’s  financial  sector. 
The banking sector performed well in 2021 thanks 
to  improving  asset  quality,  but  the  law  on  Swiss 
franc 
to 
compensate  customers  for  the  losses  caused  by 
the  appreciation  of  the  Swiss  francs,  could  cause 
significant  losses  in  2022.  Return  on  equity  has 
systematically  exceeded  10%  since  2018,  thanks 
mainly 
release  of 
the  continuous  net 
impairments. The capital adequacy ratio remained 
stable,  reaching  18.5%  in  Q3 2021  (vs.  19.3%  in 
the  EU).  The  non-performing  loans  ratio  keeps 
improving; it reached 2.3% in Q3 2021; down from 
3.1% one year earlier. Credit to households and to 
non-financial  corporations  has  strongly  recovered 
from  the  pandemic  lows  and  grew  at  a  dynamic 
year-on-year  rate  of  5.3%  (vs.  4.2%  in  the  euro 
area)  and  7.1%  (vs.  3.7%  in  the  euro  area), 
respectively, until December 2021. With a loan-to-
deposit ratio of 65.0% (vs. 86.5% in the EU), banks 
benefit from a substantial excess of deposits over 
loans.  This  ensures  a  relatively  stable  funding 
basis  and  abundant  liquidity,  especially  when 
combined with the high share of funding from the 
ECB  (5.6%  in  December  2021).  However,  the  new 
the 
law  voted  on  2 February 2022  capping 
exchange  rate  on  Swiss  franc  loans,  currently 
challenged  at  the  Constitutional  Court,  would 
negatively affect the banking sector. Losses would 
significantly  reduce  banks’  profit,  and  in  some 
cases,  they  might  even  cause  the  most  exposed 
banks to fall below capital requirements.  

lending standards on new housing loans. However, 
introducing  legally  binding  loan-to-value  limits 
could  become  necessary  if  the  recommended 
limits  were  not  carefully  followed.  In  addition,  an 
excessive pick-up in credit as the recovery unfolds 
and excessive rise in house prices could ultimately 
justify introducing a sectoral systemic risk buffer. 

Graph A16.1: Credit growth 

(1) Note: Loans adjusted for sales and securitisation (y-o-y 
change) 
Source: ECB 

Graph A16.2: Evolution of house price index 

policy  measures. 

The  residential  real  estate  market  shows 
medium  vulnerabilities 
that  are  being 
reduced  by  appropriate  and  sufficient 
The 
macroprudential 
European  Systemic  Risk  Board  (ESRB)  (2022) (60) 
has  identified  several  key  vulnerabilities:  elevated 
house  price  growth,  elevated  housing  lending 
growth, improving but still relatively loose lending 
standards.  The  ESRB  observes  that  the  current 
policy  mix  is  appropriate  and  sufficient  and  has 
been  instrumental  in  reducing  risks.  The  current 
macroprudential restrictions on household lending  

provide  for  debt  service-to-income  and  loan-to-
value limits. They have been effective in improving 

(60)  ESRB, Vulnerabilities in the residential real estate sectors of 

the EEA countries, February 2022, 
https://www.esrb.europa.eu/news/pr/date/2022/html/esrb.pr2
20211~9393d5e991.en.html. 

(1) 2015=100 
Source: Eurostat 

55 

 
 
 
                                                 
 
 
 
Table A16.1:Financial soundness indicators 

Total assets of the banking sector (% of GDP) 

Share (total assets) of the five largest bank (%) 
Share (total assets) of domestic credit institutions 

(%)1 
Financial soundness indicators:1 

2017  2018  2019  2020  2021 

94.0 
61.5 

88.6 
60.8 

88.2 
60.9 

98.4 
67.3 

97.5 
- 

54.2 

54.0 

51.0 

48.3 

49.4 

- non-performing loans (% of total loans) 
- capital adequacy ratio (%) 
- return on equity (%) 

9.2 
18.1 
9.1 
NFC credit growth (year-on-year % change) 
1.9 
HH credit growth (year-on-year % change) 
7.2 
Cost-to-income ratio (%)1 
63.7 
Loan-to-deposit ratio (%)1 
74.7 
Central bank liquidity as % of liabilities 
3.5 
Private sector debt (% of GDP) 
76.1 
Long-term interest rate spread versus Bund (basis points)  64.3 
Market funding ratio (%) 
34.0 
Green bond issuance (bn EUR) 
- 

6.0 
17.9 
10.7 
1.5 
6.8 
59.9 
73.1 
3.3 
72.6 
53.4 
34.0 
0.1 

3.4 
18.5 
10.3 
2.7 
6.1 
59.4 
73.3 
2.8 
68.8 
52.8 
32.2 
- 

3.0 
18.3 
11.3 
0.3 
0.7 
59.5 
66.6 
3.5 
69.7 
58.9 
32.2 
- 

2.3 
18.5 
10.1 
7.1 
5.3 
57.3 
65.0 
5.6 
- 
44.4 
- 
- 

1Last data: Q3 2021. 
Source: ECB, Eurostat, Refinitiv. 

56 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
 
 
ANNEX 17: TAXATION 

This  Annex  provides  an 
indicator-based 
overview of Slovenia’s tax system. It includes 
information  on  the  tax  structure,  i.e.  the  types  of 
tax  that  Slovenia  derives  most  revenue  from,  the 
tax  burden  for  workers,  and  the  progressivity  and 
redistributive  effect  of  the  tax  system.  It  also 
provides 
tax  collection  and 
compliance,  and  on  the  risk  of  aggressive  tax 
planning. 

information  on 

Slovenia’s  tax  revenues  in  relation  to  GDP 
are slightly lower than for the EU aggregate 
and  some  relatively  growth-friendly  taxes 
are  underused.  In  2020,  Slovenia’s  labour  tax 
revenues  as  a  percentage  of  GDP  were  slightly 
below  the  EU  aggregate.  At  the  same  time, 
Slovenia  relied  strongly  on  labour  taxation  and 

Table A17.1: Indicators on Taxation  

was  among  the  Member  States  with  the  highest 
share  of  labour taxes  in  total  tax  revenues.  While 
revenues  from  consumption  and  environmental 
taxes  were  above  the  EU  aggregate,  revenues 
from  capital  taxes  were  below. 
In  addition, 
revenues from recurrent property taxes, which are 
considered to be particularly  conducive to growth, 
were  clearly  below  the  EU  aggregate.  A  greater 
use of recurrent property taxes or inheritance and 
gift  taxes  would  have  the  potential  to  boost 
economic  growth,  particularly  in  view  of  the 
adopted personal income tax reductions. 

Slovenia’s  labour  tax  burden  is  relatively 
high  across  income  levels.  The  labour  tax 
wedge  for  Slovenia  in  2020  was  higher  than  the 
EU average at various income levels, i.e. for single 

Slovenia 

EU-27 

2010  2018  2019  2020  2021  2010  2018  2019  2020  2021 

Total taxes (including compulsory 
actual social contributions) (% of 
GDP) 
Labour taxes (as % of GDP) 

38.0 

37.5 

37.3 

37.6    

37.9 

40.1 

39.9 

40.1    

19.6 

18.9 

19.0 

20.1    

20.0 

20.7 

20.7 

21.5    

Consumption taxes (as % of GDP) 

13.7 

13.6 

13.3 

12.3    

10.8 

11.1 

11.1 

10.8    

Capital taxes (as % of GDP) 

Total property taxes (as % of GDP) 
Recurrent taxes on immovable 
property (as % of GDP) 

Environmental taxes as % of GDP 
Tax wedge at 50% of Average 
Wage (Single person) (*) 
Tax wedge at 100% of Average 
Wage (Single person) (*) 
Corporate Income Tax - Effective 
Average Tax rates (1) (*) 
Difference in GINI coefficient 
before and after taxes and cash 
social transfers (pensions excluded 
from social transfers) 
Outstanding tax arrears: Total 
year-end tax debt (including debt 
considered not collectable) / total 
revenue (in %) (*) 

4.7 

0.6 

0.5 

3.6 

4.9 

0.6 

0.5 

3.4 

5.1 

0.6 

0.5 

3.3 

5.2    

0.6    

0.5    

2.9    

7.1 

1.9 

1.1 

2.4 

8.2 

2.2 

1.2 

2.4 

8.1 

2.2 

1.2 

2.4 

7.9    

2.3    

1.2    

2.2    

33.7 

36.1 

37.2 

37.2 

39.5 

33.9 

32.4 

32.0 

31.5 

31.9 

42.5 

43.2 

43.5 

43.1 

43.6 

41.0 

40.2 

40.1 

39.9 

39.7 

17.5 

17.5 

17.5    

19.8 

19.5 

19.3    

10.7 

9.8 

9.3 

9.6    

8.4 

7.9 

7.4 

8.3    

7.3 

6.8    

31.9 

31.8    

VAT Gap (% of VTTL) 

4.1 

7.1    

11.2 

10.5    

Dividends, Interests and Royalties 
(paid and received) as a share of 
GDP (%) 
FDI flows through SPEs (Special 
Purpose Entities), % of total FDI 
flows (in and out) 

2.8 

2.9 

2.4    

10.7 

10.5    

0.0 

0.0 

0.0    

47.8 

46.2 

36.7    

Tax 
structure 

Progressiv
ity & 
fairness 

Tax 
administra
tion & 
complianc
e 

Financial 
Activity 
Risk 

(1) Forward-looking Effective Tax Rate (OECD). 
(*) EU-27 simple average as there is no aggregated EU-27 value. 
Sources: Commission services and OECD. 

57 

 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
Graph A17.1: Indicators on Tax wedge 

The tax wedge measures the difference between the total labour cost of employing a worker and the worker’s net earnings: sum 
of personal income taxes and employee and employer social security contributions, net of family allowances, expressed as a 
percentage of total labour costs (the sum of the gross wage and social security contributions paid by the employer). 

(1) The second earner average tax wedge measures how much extra personal income tax plus employee and employer social 
security contributions the family will have to pay as a result of the second earner entering employment, as a proportion of the 
second earner’s gross earnings plus the employer SSCs due on the second earner’s income. For a more detailed discussion see 
OECD (2016), ”Taxing Wages 2016”, OECD Publishing, Paris. http://dx.doi.org/10.1787/tax_wages-2016-en  
(*) EU-27 simple average as there is no aggregated EU-27 value. 
(2) Annual Report on Taxation 2021 - Publications Office of the EU (europa.eu 
Source: Commission services 

people  at the  average  wage  (100%)  and  at  50%, 
67%  and  167%  of  the  average  wage.  Second 
earners  at  a  wage  level  of  67%  of  the  average 
wage, whose spouse earns the average wage, also 
faced a tax wedge considerably higher than the EU 
average.  Yet  the  difference  between  their  tax 
wedge  and  that  of  single  earners  at  the  same 
wage  level  is  only  slightly  above  the  EU  average. 
Slovenia  has  one  of  the  lowest  income  inequality 
as  measured  by  the  GINI  coefficient  and  the  tax-
benefit system helped reduce income inequality by 
more  than  the  EU  average  in  2020.  The  newly 
adopted personal income tax cuts are expected to 
reduce the labour tax burden in Slovenia at a cost 
of lower labour tax revenues. 

is  doing  moderately  well 

Slovenia 
in 
digitalising  its  tax  administration,  which  can 
help  reduce  tax  arrears  as  well  as  cut 
compliance  costs.  Outstanding  tax  arrears  have 
declined  slightly  by  0.5  pps  to  6.8%  of  total  net 
revenue.  This  is  significantly  below  the  EU-27 
average of 31.8%, though that average is inflated 
by  very  large  values  in  a  few  Member  States. 
in 
However,  compliance  costs  for  companies 

Slovenia  are  much  higher  than  the  EU  average, 
both  for  completing  tax  returns  as  well  as  for 
complying  with  corporate  income  tax  audits (61). 
The  VAT  gap  (an indicator  of  the  effectiveness  of 
VAT enforcement and compliance) has increased in 
Slovenia from 4.1% to 7.1%, but is still below the 
EU-wide  gap  of  10.5%.  Furthermore,  the  average 
forward-looking  effective  corporate  income  tax 
rate  was  at  17.5%,  slightly  below  the  EU-27 
average at 19.3% in 2020. 

(61)  European Commission, Directorate-General for Taxation and 
Customs Union, Annual Report on Taxation 2021 : review of 
taxation policies in the EU Member States, Publications 
Office, 2021, https://data.europa.eu/doi/10.2778/294944, 
see section 2.1.4 Improving tax administration of the Annual 
Report on Taxation 2021 for further details 

58 

39.540.443.646.444.1At 50% of Average Wage (Singleperson)At 67% of Average Wage (Singleperson)At 100% of Average Wage (Singleperson)At 167% of Average Wage (Singleperson)For second earner at 67% of AverageWage (Two earner couple, 1st earner100% of AW) (1)Tax wedge 2021 (%)SIEU-27 (*) 
                                                 
  
 
ANNEX 18: KEY ECONOMIC AND FINANCIAL INDICATORS 

Table A18.1: Key economic and financial indicators 

(1) NIIP excluding direct investment and portfolio equity shares   
(2) domestic banking groups and stand-alone banks, EU and non-EU foreign-controlled subsidiaries and EU and non-EU foreign-
controlled branches.     
Source: Source: Eurostat and ECB as of 2022-05-02, where available; European Commission for forecast figures (Spring forecast 
2022)         

59 

2004-072008-122013-1820192020202120222023Real GDP (y-o-y)5.2-1.02.73.3-4.28.13.73.1Potential growth (y-o-y)3.41.81.22.72.42.73.13.3Private consumption (y-o-y)3.10.91.64.8-6.611.64.12.5Public consumption (y-o-y)2.90.91.02.04.23.90.41.1Gross fixed capital formation (y-o-y)7.8-8.92.95.5-8.212.33.85.0Exports of goods and services (y-o-y)13.10.66.24.5-8.713.24.96.0Imports of goods and services (y-o-y) 12.6-1.65.74.7-9.617.44.35.7Contribution to GDP growth:Domestic demand (y-o-y)4.2-1.51.63.9-4.39.03.02.6Inventories (y-o-y)0.8-0.90.4-0.90.10.80.00.0Net exports (y-o-y)0.11.50.70.3-0.1-1.60.70.5Contribution to potential GDP growth:Total Labour (hours) (y-o-y)0.10.10.00.60.80.60.90.9Capital accumulation (y-o-y)1.60.6-0.20.3-0.10.30.40.6Total factor productivity (y-o-y)1.71.11.41.81.81.71.71.7Output gap4.3-1.2-2.83.5-3.21.92.52.3Unemployment rate5.96.98.14.45.04.84.84.6GDP deflator (y-o-y)2.81.71.32.21.22.63.33.7Harmonised index of consumer prices (HICP, y-o-y)3.12.70.81.7-0.32.06.13.3Nominal compensation per employee (y-o-y)6.32.72.25.03.55.43.65.5Labour productivity (real, hours worked, y-o-y)5.1-0.11.80.60.62.41.70.8Unit labour costs (ULC, whole economy, y-o-y)2.22.90.94.27.4-1.10.83.9Real unit labour costs (y-o-y)-0.61.2-0.31.96.1-3.6-2.40.2Real effective exchange rate (ULC, y-o-y)0.30.60.01.3....Real effective exchange rate (HICP, y-o-y)-0.4-0.20.4-0.40.5-0.4..Net savings rate of households (net saving as percentage of net disposable income)9.65.04.26.516.3...Private credit flow, consolidated (% of GDP)14.03.6-2.00.8-0.9...Private sector debt, consolidated (% of GDP)80.8111.987.068.869.7...of which household debt, consolidated (% of GDP)20.329.027.826.927.8...of which non-financial corporate debt, consolidated (% of GDP)60.583.059.241.941.9...Gross non-performing debt (% of total debt instruments and total loans and advances) (2)..11.42.62.4...Corporations, net lending (+) or net borrowing (-) (% of GDP)-6.70.04.60.33.53.73.73.7Corporations, gross operating surplus (% of GDP)18.818.919.619.820.922.322.622.8Households, net lending (+) or net borrowing (-) (% of GDP)4.83.64.25.011.46.32.01.8Deflated house price index (y-o-y)12.8-3.70.75.35.2...Residential investment (% of GDP)3.73.42.22.22.32.2..Current account balance (% of GDP), balance of payments-2.6-1.34.96.07.43.30.71.7Trade balance (% of GDP), balance of payments-0.70.87.88.79.35.6..Terms of trade of goods and services (y-o-y)-0.7-0.90.50.50.7-2.4-2.30.4Capital account balance (% of GDP)-0.30.00.0-0.4-0.50.1..Net international investment position (% of GDP)-15.2-41.4-30.1-15.9-15.2-7.1..NENDI - NIIP excluding non-defaultable instruments (% of GDP) (1)-8.0-37.8-17.61.12.08.6..IIP liabilities excluding non-defaultable instruments (% of GDP) (1)72.5107.5101.587.1101.491.2..Export performance vs. advanced countries (% change over 5 years)35.28.51.214.020.8...Export market share, goods and services (y-o-y)4.0-4.63.50.82.12.90.21.6Net FDI flows (% of GDP)0.5-0.3-1.7-1.60.6-1.0..General government balance (% of GDP)-1.1-4.7-4.00.4-7.8-5.2-4.3-3.4Structural budget balance (% of GDP)-3.1-4.1-2.4-1.1-6.2-6.1-5.5-4.5General government gross debt (% of GDP)25.638.976.065.679.874.774.172.7forecast 
 
 
 
  
 
 
 
ANNEX 19 DEBT SUSTAINABILITY ANALYSIS 

This  annex  assesses  fiscal  sustainability 
risks  for  Slovenia  over  the  short,  medium 
and  long  term.  It  follows  the  same  multi-
dimensional  approach  as 
the  2021  Fiscal 
Sustainability Report, updated on the basis of the 
Commission 2022 spring forecast. 

Table  1  presents 
the  baseline  debt 
projections.  It  shows  the  projected  government 
debt and its breakdown into the primary balance, 
the  snowball  effect  (the  combined  impact  of 
interest  payments  and  nominal  GDP  growth  on 
stock-flow 
the  debt  dynamics)  and 
adjustment.  These  projections  assume  that  no 
new fiscal policy measures are taken after 2023, 
and  include  the  expected  positive  impact  of 
investments under Next Generation EU.  

the 

Graph  1  shows  four  alternative  scenarios 
around the baseline, to illustrate the impact 
of changes in assumptions. The ‘historical SPB’ 
scenario  assumes  that  the  structural  primary 
balance  (SPB)  gradually  returns  to 
its  past 
average level. In the ‘lower SPB’ scenario, the SPB 
is  permanently  weaker  than  in  the  baseline.  The 

Table A19.1: Debt sustainability analysis for Slovenia 

‘adverse interest-growth rate’ scenario assumes a 
less  favourable  snowball  effect  than  in  the 
baseline.  In  the  ‘financial  stress’  scenario,  the 
country  temporarily  faces  higher  market  interest 
rates in 2022.  

Graph  2  shows  the  outcome  of  the 
stochastic  projections.  These  projections  show 
the  impact  on  debt  of  2  000  different  shocks 
affecting  the  government’s  budgetary  position, 
economic  growth,  interest  rates  and  exchange 
rates.  The  cone  covers  80%  of  all  the  simulated 
debt paths, therefore excluding tail events.  

Table  2  shows  the  S1  and  S2  fiscal 
sustainability 
indicators  and  their  main 
drivers.  S1  measures  the  consolidation  effort 
needed to bring debt to 60% of GDP in 15 years. 
S2  measures  the  consolidation  effort  required  to 
stabilise  debt  over  an  infinite  horizon.  The  initial 
budgetary  position  measures  the  effort  required 
to  cover  future  interest  payments,  the  ageing 
costs component accounts for the need to absorb 
the  projected  change  in  ageing-related  public 
expenditure  such  as  pensions,  health  care  and 

Source: European Commission 

60 

Table 1. Baseline debt projections20192020202120222023202420252026202720282029203020312032Gross debt ratio (% of GDP)65.679.874.774.172.772.071.571.873.074.075.477.379.782.5Change in debt-4.714.2-5.1-0.6-1.4-0.7-0.50.31.21.01.41.92.42.8of whichPrimary deficit-2.16.23.93.22.32.62.83.23.74.04.34.64.85.1Snowball effect-2.03.7-6.6-3.8-3.7-3.3-3.3-2.9-2.6-3.0-2.9-2.6-2.5-2.3Stock-flow adjustment-0.64.3-2.40.00.00.00.00.00.00.00.00.00.00.0Gross financing needs (% of GDP)6.920.913.915.013.813.713.613.814.314.614.915.315.816.5S1S2Overall index (pps. of GDP)4.611.1of whichInitial budgetary position1.93.7Debt requirement1.0Ageing costs1.77.4of whichPensions1.15.3Health care0.41.0Long-term care0.21.0Others0.00.1                                                                       Table 2. Breakdown of the S1 and S2 sustainability gap indicators45505560657075808590952019202120232025202720292031BaselineHistorical SPB scenarioLower SPB scenarioFinancial stress scenarioAdverse 'r-g' scenarioGraph 1. Deterministic debt projections (% of GDP)p10-p20p20-p40p40-p60p60-p80p80-p9045556575859520192020202120222023202420252026Graph 2. Stochastic debt projections(% of GDP)MedianBaseline 
 
 
  
 
Table A19.2: Heat map of fiscal sustainability risks for Slovenia 

(1) Debt level in 2032: green: below 60% of GDP, yellow: between 60% and 90%, red: above 90%. (2) The debt peak year 
indicates whether debt is projected to increase overall over the next decade. Green: debt peaks early; yellow: peak towards the 
middle of the projection period; red: late peak. (3) Fiscal consolidation space measures the share of past fiscal positions in the 
country that were more stringent than the one assumed in the baseline. Green: high value, i.e. the assumed fiscal position is 
plausible by historical standards and leaves room for corrective measures if needed; yellow: intermediate; red: low. (4) Probability 
of the debt ratio exceeding in 2026 its 2021 level: green: low probability, yellow: intermediate, red: high (also reflecting the initial 
debt level). (5) The difference between the 90th and 10th percentiles measures uncertainty, based on the debt distribution under 
2000 different shocks. Green, yellow and red cells indicate increasing uncertainty 
Source:  European Commission (for further details on the Commission’s multi-dimensional approach, see the 2021 Fiscal 
Sustainability Report). 

long-term  care,  and 
requirement 
measures  the  additional  adjustment  needed  to 
reach the 60% of GDP debt target. 

the  debt 

risk 

sustainability 

Finally,  the  heat  map  presents  the  overall 
classification 
fiscal 
(Table A19.2).  The  short-term  risk  category  is 
based  on  the  S0  indicator,  an  early-detection 
indicator of fiscal stress in the upcoming year. The 
medium-term  risk  category  is  derived  from  the 
debt  sustainability  analysis  (DSA)  and  the  S1 
indicator. The DSA assesses risks to sustainability 
based on several criteria: the projected debt level 
in 10 years’ time, the debt trajectory (‘peak year’), 
the plausibility of fiscal assumptions and room for 
tighter  positions  if  needed  (‘fiscal  consolidation 
space’),  the  probability  of  debt  not  stabilising  in 
the next 5 years and the size  of uncertainty. The 
long-term  risk  category  is  based  on  the  S2 
indicator and the DSA.  

On the other hand, the sustainability gap indicator 
It  signals  that  a 
S1  points  to  high  risks. 
consolidation  effort  of  4.6  pps.  of  GDP  would  be 
needed to reduce debt to 60% of GDP in 15 years’ 
time  (Table 2).  Overall,  the  high  risk  reflects  the 
currently large deficit and significant debt, as well 
as  the  projected  increase  in  public  pension  and 
health care expenditure. 

Long-term  risks  to  fiscal  sustainability  are 
high.  Over  the  long  term,  the  sustainability  gap 
indicator  S2  (at  11.1  pps.  of  GDP)  points  to  high 
risks,  driving  the  overall  assessment.  The  S2 
indicator  shows  that,  to  stabilise  debt  over  the 
long  term,  it  will  be  necessary  to  address  the 
unfavourable initial budgetary position and future 
budgetary  pressures  stemming  from  population 
ageing, related to pension, health care, and long-
term care expenditure (Table 2).   

short-term 

Overall, 
fiscal 
sustainability are low. The Commission’s early-
detection  indicator  (S0)  does  not  signal  major 
short-term fiscal risks (Table A19.2). 

risks 

to 

Medium-term  risks  to  fiscal  sustainability 
are high. On the one hand, the debt sustainability 
analysis  (DSA),  points  to  medium  risks.  It  shows 
that  government  debt  is  projected  to  overall 
increase  from  74.1%  of  GDP  in  2022  to  around 
83%  of  GDP  in  2032  in  the  baseline  (Table 1). 
This debt path is also sensitive to possible shocks 
to  fiscal,  macroeconomic  and  financial  variables, 
as 
illustrated  by  alternative  scenarios  and 
stochastic  simulations  (Tables  A19.1  and  A19.2). 

61 

BaselineHistorical SPBLower SPBAdverse 'r-g'Financial stressOverallMEDIUMLOWMEDIUMMEDIUMMEDIUMLOWDebt level (2032), % GDP8270888883Debt peak year20322021203220322032Fiscal consolidation space90%62%94%90%90%Probability of debt ratio exceeding in 2026 its 2021 level39%Difference between 90th and 10th percentiles (pps. GDP)26Short termMedium termLong termOverall                               (S0)Overall     (S1+DSA)S1Debt sustainability analysis (DSA)S2Overall     (S2+DSA)OverallHIGHHIGHDeterministic scenariosStochastic projectionsLOWHIGHHIGHMEDIUM