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

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   EUROPEAN COMMISSION  Brussels, 23.5.2022  COM(2022) 626 final  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 {SWD(2022) 626 final} - {SWD(2022) 640 final}  
 
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 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Articles 121(2) and 148(4) thereof, 

Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of 
the  surveillance  of  budgetary  positions  and  the  surveillance  and  coordination  of  economic 
policies1, and in particular Article 5(2) thereof, 

Having regard to the recommendation of the European Commission, 

Having regard to the resolutions of the European Parliament, 

Having regard to the conclusions of the European Council, 

Having regard to the opinion of the Employment Committee, 

Having regard to the opinion of the Economic and Financial Committee, 

Having regard to the opinion of the Social Protection Committee, 

Having regard to the opinion of the Economic Policy Committee, 

Whereas: 

(1) 

Regulation  (EU)  2021/241  of  the  European  Parliament  and  of  the  Council2,  which 
established  the  Recovery  and  Resilience  Facility,  entered  into  force  on  19  February 
2021.  The  Recovery  and  Resilience  Facility  provides  financial  support  for  the 
implementation of reforms and investment, entailing a fiscal impulse financed by the 
Union.  It  contributes  to  the  economic  recovery  and  to  the  implementation  of 
sustainable and growth-enhancing reforms and investment, in particular to promote the 
green and digital transition, while strengthening the resilience and potential growth of 
the Member States’ economies. It also helps strengthen sustainable public finances and 
boost growth and job creation in the medium and long term. The maximum financial 
contribution  per  Member  State  under  the  Recovery  and  Resilience  Facility  [was] 
updated on [XX] June 2022, in line with Article 11(2) of Regulation (EU) 2021/241.  

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2 

OJ L 209, 2.8.1997, p. 1. 
Regulation  (EU)  2021/241  of  the  European  Parliament  and  of  the  Council  of  12  February  2021 
establishing the Recovery and Resilience Facility (OJ L 57, 18.2.2021, p. 17). 

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(2) 

(3) 

(4) 

On  24  November  2021,  the  Commission  adopted  the  Annual  Sustainable  Growth 
Survey,  marking  the  start  of  the  2022  European  Semester  for  economic  policy 
coordination.  It  took  due  account  of  the  reaffirmed  joint  commitment  of  the  Porto 
Social Summit of May 2021 to further implement the European Pillar of Social Rights 
proclaimed  by  the  European  Parliament,  the  Council  and  the  Commission  on  17 
November  2017.  The  European  Council  endorsed  the  priorities  of  the  2022  Annual 
Sustainable Growth Survey on 25 March 2022. On 24 November 2021, on the basis of 
Regulation  (EU)  No  1176/2011,  the  Commission  also  adopted  the  Alert  Mechanism 
Report, in which it did not identify Slovenia as one of the Member States for which an 
in-depth review3 would be needed. On the same date, the Commission also adopted a 
recommendation  for  a  Council  recommendation  on  the  economic  policy  of  the  euro 
area, which was adopted on 5 April 2022 by the Council, as well as the proposal for 
the 2022 Joint Employment Report analysing the implementation of the Employment 
Guidelines  and  the  principles  of  the  European  Pillar  of  Social  Rights,  which  was 
adopted by the Council on 14 March 2022. 

Russia’s  invasion  of  Ukraine,  in  the  wake  of  the  global  pandemic,  has  significantly 
altered the geopolitical and economic context. The impact of the invasion on Member 
States’  economies  has  been  felt  for  example  through  higher  energy  and  food  prices 
and weaker growth prospects. The higher energy prices weigh particularly on the most 
vulnerable households experiencing or at risk of energy poverty. The EU is also seeing 
an unprecedented inflow of people fleeing Ukraine. In this context, on 4 March 2022, 
the  Temporary  Protection  Directive  was  triggered4  for  the  first  time,  granting 
displaced persons from Ukraine the right to legally stay in the EU, as well as access to 
education and training, labour market, healthcare, housing and social welfare. 

Taking  account  of  the  rapidly  changing  economic  and  geopolitical  situation,  the 
European Semester resumes its broad economic and employment policy coordination 
in 2022, while evolving in line with the implementation requirements of the Recovery 
and  Resilience  Facility,  as  outlined  in  the  2022  Annual  Sustainable  Growth  Survey. 
The  implementation  of  the  adopted  recovery  and  resilience  plans  is  essential  for  the 
delivery of the policy priorities under the European Semester, as the plans address all 
or a significant subset of the relevant country-specific recommendations issued in the 
2019  and  2020  Semester  cycles.  The  2019  and  2020  country-specific 
recommendations  remain  equally  relevant  also  for  recovery  and  resilience  plans 
revised, updated or amended in accordance with Articles 14, 18 and 21 of Regulation 
(EU) 2021/241, in addition to any country-specific recommendations issued up to the 
date of submission of the modified plan.  

(5) 

The General Escape Clause has been active since March 20205. In its Communication 
of  3  March  20216,  the  Commission  set  out  its  view  that  the  decision  on  the 

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Regulation (EU) No 1176/2011 of the European Parliament and of the Council of 16  November 2011 
on the prevention and correction of macroeconomic imbalances, OJ L 306, 23.11.2011, p. 25. 
Council Implementing Decision (EU) 2022/382 of 4 March 2022 establishing the existence of a mass 
influx of displaced persons from Ukraine within the meaning of Article 5 of Directive 2001/55/EC, and 
having the effect of introducing temporary protection, OJ L 71, 4.3.2022, p. 1.   
Communication from the Commission to the Council on the activation of the general escape clause of 
the Stability and Growth Pact, Brussels, 20.3.2020, COM(2020) 123 final. 
Communication  from  the  Commission  to  the  Council  on  one  year  since  the  outbreak  of  COVID-19: 
fiscal policy response, Brussels, 3.3.2021, COM(2021) 105 final. 

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(6) 

(7) 

deactivation or continued application of the general escape clause should be taken as 
an overall assessment of the state of the economy, with the level of economic activity 
in the EU or euro area compared to pre-crisis levels (end-2019) as a key quantitative 
criterion. Heightened uncertainty and strong downside risks to  the economic outlook 
in  the  context  of  war  in  Europe,  unprecedented  energy  price  hikes  and  continued 
supply  chain  disturbances  warrant  the  extension  of  the  general  escape  clause  of  the 
Stability and Growth Pact through 2023.  

Following the approach in the Council opinion of 18 June 2021 on the 2021 Stability 
Programme,  the  fiscal  stance  is  currently  best  measured  as  the  change  in  primary 
expenditure  (net  of  discretionary  revenue  measures),  excluding  COVID-19  crisis-
related  temporary  emergency  measures  but  including  expenditure  financed  by  non-
repayable  support  (grants)  from  the  Recovery  and  Resilience  Facility  and  other  EU 
funds,  relative  to  medium-term  potential  growth7.  Going  beyond  the  overall  fiscal 
stance, in order to assess whether national fiscal policy is prudent and its composition 
is conducive to a sustainable recovery consistent with the green and digital transitions, 
attention  is  also  paid  to  the  evolution  of  nationally-financed8  primary  current 
expenditure  (net  of  discretionary  revenue  measures  and  excluding  COVID-19  crisis-
related temporary emergency measures) and investment. 

On  2  March  2022,  the  Commission  adopted  a  Communication  providing  broad 
guidance  for  fiscal  policy  in  2023,  aiming  at  supporting  the  preparation  of  Member 
States’  Stability  and  Convergence  Programmes  and  thereby  strengthening  policy 
coordination9.  The  Commission  noted  that,  based  on  the  macroeconomic  outlook  of 
the  2022  winter  forecast,  transitioning  from  an  aggregate  supportive  fiscal  stance  in 
2020-2022  to  a  broadly  neutral  aggregate  fiscal  stance  would  appear  appropriate  in 
2023,  while  standing  ready  to  react  to  the  evolving  economic  situation.  The 
Commission announced that the fiscal recommendations for 2023 should  continue to 
differentiate  across  Member  States  and  take  into  account  possible  cross-country 
spillovers. The Commission invited the Member States to reflect the guidance in their 
Stability  and  Convergence  Programmes.  The  Commission  committed  to  closely 
monitor  the  economic  developments  and  adjust  its  policy  guidance  as  needed  and  at 
the latest in its Semester spring package of late May 2022. 

(8)  With  respect  to  the  fiscal  guidance  provided  on  2  March  2022,  the  fiscal 
recommendations  for  2023  take  into  account  the  worsened  economic  outlook,  the 
heightened uncertainty and further downside risks, and the higher inflation compared 
to the winter forecast. Against these considerations, the fiscal response has to expand 
public investment for the green and digital transition and energy security, and sustain 
the purchasing power of the most vulnerable households so as to cushion the impact of 
the energy price hike and help limit inflationary pressures from second round effects 
via targeted and temporary measures; fiscal policy has to remain agile so as to adjust 
to  the  rapidly  evolving  circumstances,  and  be  differentiated  across  countries 

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The  estimates  on  the  fiscal  stance  and  its  components  in  this  recommendation  are  Commission 
estimates  based  on  the  assumptions  underlying  the  Commission  2022  spring  forecast.  The 
Commission’s estimates of medium-term potential growth do not include the positive impact of reforms 
that are part of the Recovery and Resilience Plan and that can boost potential growth.  
Not financed by grants from the Recovery and Resilience Facility and other EU funds. 
Communication  from  the  Commission  to  the  Council:  Fiscal  policy  guidance  for  2023,  Brussels, 
2.3.2022, COM(2022) 85 final. 

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depending on their fiscal and economic situation, including as regards the exposure to 
the crisis and the inflow of displaced persons from Ukraine. 

(9) 

On 30 April 2021, Slovenia submitted its national recovery and resilience plan to the 
Commission, in accordance with Article 18(1) of Regulation (EU) 2021/241. Pursuant 
to  Article  19  of  Regulation  (EU)  2021/241,  the  Commission  assessed  the  relevance, 
effectiveness,  efficiency  and  coherence  of  the  recovery  and  resilience  plan,  in 
accordance with the assessment guidelines of Annex V to that Regulation. On 28 July 
2021,  the  Council  adopted  its  Decision  on  the  approval  of  the  assessment  of  the 
recovery  and resilience  plan for Slovenia10. The release of instalments  is  conditional 
on  a  decision  by  the  Commission,  taken  in  accordance  with  Article  24(5)  of 
Regulation  (EU)  2021/241,  that  Slovenia  has  satisfactorily  fulfilled  the  relevant 
milestones  and  targets  set  out  in  the  Council  Implementing  Decision.  Satisfactory 
fulfilment  presupposes  that  the  achievement  of  preceding  milestones  and  targets  has 
not been reversed. 

(10)  On  28  April  2022,  Slovenia  submitted  its  2022  National  Reform  Programme  and  its 
2022 Stability Programme. To take account of their interlinkages, the two programmes 
have  been  assessed  together.  In  accordance  with  Article  27  of  Regulation  (EU) 
2021/241,  the  2022  National  Reform  Programme  also  reflects  Slovenia’s  bi-annual 
reporting on the progress made in achieving its recovery and resilience plan.  

the 

(11)  The Commission published the 2022 country report for Slovenia11 on 23 May 2022. It 
relevant  country-specific 
in  addressing 
assessed  Slovenia’s  progress 
recommendations adopted by the Council in 2019, 2020 and 2021, and took stock of 
Slovenia’s  implementation  of  the  recovery  and  resilience  plan,  building  on  the 
Recovery  and  Resilience  Scoreboard.  Based  on  this  analysis,  the  country  report 
identified gaps with respect to those challenges that are not addressed or only partially 
addressed  by  the  recovery  and  resilience  plan,  as  well  as  the  new  and  emerging 
challenges,  including  those  emerging  from  Russia’s  invasion  of  Ukraine.  It  also 
assessed Slovenia's progress on implementing the European Pillar of Social Rights and 
on achieving the EU headline targets on employment, skills and poverty reduction, as 
well as progress in achieving the UN’s Sustainable Development Goals. 

(12)  On 29 April 2022, Slovenia submitted its 2022 Stability Programme, in line with the 
deadline  established  in  Article  4  of  Regulation  (EC)  No  1466/97.  The  Council  has 
examined  the  2022  Stability  Programme  of  Slovenia  and  its  opinion12  is  reflected  in 
particular in recommendation (1) below. 

(13)  On  23  May  2022,  the  Commission  issued  a  report  under  Article  126(3)  TFEU.  This 
report discussed the budgetary situation of Slovenia, as its general government deficit 
in  2021  exceeded  the  3%  of  GDP  Treaty  reference  value.  The  report  concluded  that 
the  deficit  criterion  was  not  fulfilled.  In  line  with  the  Communication  of  2  March 
2022,  the  Commission  did  not  propose  to  open  new  excessive  deficit  procedures  in 
spring 2022 and it will re-assess the possible opening of excessive deficit procedures 
in autumn 2022. 

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Council Implementing Decision of 20 July 2021 on the approval of the assessment of the recovery and 
resilience plan for Slovenia (ST 10612/2021; ST 10612/2021 ADD 1).  
SWD(2022)626 final. 
Under Article 5(2) of Council Regulation (EC) No 1466/97. 

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the  economy  and  support 

(14)  On  20  July  2020,  the  Council  recommended  Slovenia  to  take  in  2020  and  2021  all 
necessary measures, in line with the general escape clause, to  effectively address the 
pandemic,  sustain 
the  ensuing  recovery.  It  also 
recommended  Slovenia  to  pursue,  when  economic  conditions  allow,  fiscal  policies 
aimed  at  achieving  prudent  medium-term  fiscal  positions  and  ensuring  debt 
sustainability,  while  enhancing  investment.  In  2021,  based  on  data  validated  by 
Eurostat,  Slovenia’s  general  government  deficit  fell  from  7.8%  of  GDP  in  2020  to 
5.2%  in  2021.  The  fiscal  policy  response  by  Slovenia  supported  the  economic 
recovery in  2021, while temporary emergency support measures  declined from  5.1% 
of GDP in 2020 to 3.8% in 2021. The measures taken by Slovenia in 2021 have been 
in  line  with  the  Council  Recommendation  of  20  July  2020.  The  discretionary 
budgetary  measures  adopted  by  the  government  in  2020  and  2021  were  mostly 
temporary  or  matched  by  offsetting  measures.  Based  on  data  validated  by  Eurostat, 
general government debt stood at 74.7 % of GDP in 2021. 

(15)  The  macroeconomic  scenario  underpinning  the  budgetary  projections  in  the  2022 
Stability  Programme  is  favourable  in  2022  and  realistic  thereafter.  The  government 
projects  real  GDP  to  grow  by  4.2%  in  2022  and  3.0%  in  2023.  By  comparison,  the 
Commission’s 2022 spring forecast projects a lower real GDP growth of 3.7% in 2022 
and 3.1% in 2023. In its 2022 Stability Programme, the Government expects that the 
headline  deficit  will  decrease  to  4.1 %  of  GDP  in  2022,  and  to  3.0%  in  2023.  The 
decrease  in  2022  mainly  reflects  the  unwinding  of  most  emergency  measures. 
According to the Programme, the general government debt-to-GDP ratio is expected to 
decrease to 73.3% in 2022, and to decline to 71.5% in 2023. Based on policy measures 
known  at  the  cut-off  date  of  the  forecast,  the  Commission  2022  spring  forecast 
projects  a  government  deficit  for  2022  and  2023  of  4.3%  of  GDP  and  3.4% 
respectively. This is higher than the deficit projected in the 2022 Stability Programme, 
mainly due to higher projected current expenditure and lower projected revenues from 
income  tax.  The  Commission  2022  spring  forecast  projects  a  higher  general 
government debt-to-GDP ratio, of 74.1% in 2022 and 72.7% in 2023. The difference is 
due to the higher deficits in both years and lower projected economic growth in 2022.  

Based  on  the  Commission  spring  2022  forecast,  the  medium-term  (10-year  average) 
potential output growth is estimated at 2.5%. However, this estimate does not include 
the  impact  of  the  reforms  that  are  part  of  the  Recovery  and  Resilience  Plan  and  can 
boost Slovenia’s potential growth. 

(16) 

In 2022, the government phased out the majority of measures taken in response to the 
COVID-19 crisis, such that the temporary emergency support measures are projected 
to  decline  from  3.8%  of  GDP  in  2021  to  0.5%  in  2022.  The  government  deficit  is 
impacted  by  the  measures  adopted  to  counter  the  economic  and  social  impact  of  the 
increase in energy prices, which in the Commission spring 2022 forecast are estimated 
at 0.4% of GDP in 2022 and are expected to be phased out in 2023.13 These measures 
mainly consist of social transfers to poorer households, cuts to indirect taxes on energy 
consumption,  exemption  from  paying  network  charges  and  price  caps  on  retail  and 
wholesale fuel prices. These measures have been announced as temporary. However, 
in case energy prices remain elevated also in 2023, some of these measures could be 

13 

The figures represent the level of annual budgetary costs of those measures taken since autumn 2021, 
including current revenue and expenditure as well as – where relevant – capital expenditure measures. 

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continued.  Some  of  these  measures  are  not  targeted,  notably  the  price  cap  on  fuel 
prices  and  the  across  the  board  cuts  in  excise  duties.  The  government  deficit  is  also 
impacted by the costs to offer temporary protection to displaced persons from Ukraine, 
which in the Commission 2022 spring forecast are projected at 0.1% of GDP in both 
2022 and 2023.14 

(17)  On  18  June  2021,  the  Council  recommended  that  in  2022  Slovenia15  maintains  a 
supportive  fiscal  stance,  including  from  the  impulse  provided  by  the  Recovery  and 
It  also 
Resilience  Facility,  and  preserves  nationally-financed 
recommended  Slovenia  to  pursue,  when  economic  conditions  allow,  a  fiscal  policy 
aimed  at  achieving  prudent  medium-term  fiscal  positions  and  ensuring  fiscal 
sustainability  in  the  medium  term,  and  at  the  same  time,  to  enhance  investment  to 
boost growth potential. 

investment. 

(18) 

In  2022,  based  on  the  Commission’s  2022  spring  forecast  and  including  the 
information incorporated in its 2022 Stability Programme, the fiscal stance is projected 
to be supportive at -2.6% of GDP.16 Slovenia plans to provide continued support to the 
recovery by making use of the Recovery and Resilience Facility to finance additional 
investment  as  recommended  by  the  Council.  The  positive  contribution  to  economic 
activity of expenditure financed by Recovery and Resilience Facility grants and other 
EU funds is projected to increase by 0.2 percentage points of GDP compared to 2021. 
Nationally-financed investment is projected to provide an expansionary contribution to 
the  fiscal  stance  of  0.9  percentage  points  in  2022.17  Therefore,  Slovenia  plans  to 
preserve nationally financed investment, as recommended by the Council. At the same 
time,  the  growth  in  nationally-financed  primary  current  expenditure  (net  of  new 
revenue measures) in 2022 is projected to provide an expansionary contribution of 1.6 
percentage  points  to  the  overall  fiscal  stance.  This  significant  expansionary 
contribution  includes  the  additional  impact  of  the  measures  to  address  the  economic 
and social impact of the increase in energy prices (0.4% of GDP) as well as the costs 
to offer temporary protection to displaced persons from Ukraine (0.1% of GDP). The 
higher increase in consumer prices compared to the GDP deflator is projected to affect 
the  expansionary  contribution  of  nationally  financed  primary  current  expenditure  in 
2022,  by  increasing  spending  on  government  consumption  of  goods  and  services,  as 
well as on social benefits as a result of indexation and on public wages as a result of 
increasing wage pressure. 

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The total number of displaced persons from Ukraine to the EU is assumed to gradually reach 6 million 
by  the  end  of  2022,  and  their  geographical  distribution  is  estimated  based  on  the  size  of  the  existing 
diaspora, the relative population of the receiving Member State, and the actual distribution of displaced 
persons from Ukraine across the EU as of March 2022. For budgetary costs per person, estimates are 
based on the Euromod microsimulation model of the Commission’s Joint Research Centre, taking into 
account both cash transfers people may be eligible for as well as in-kind benefits such as education and 
healthcare. 
Council  Recommendation  of  18  June  2021  delivering  a  Council  opinion  on  the  2021  Stability 
Programme of Slovenia, OJ C 304, 29.7.2021, p. 116.  
A negative (positive) sign of the indicator corresponds to an excess (shortfall) of primary expenditure 
growth  compared  with  medium-term  economic  growth,  indicating  an  expansionary  (contractionary) 
fiscal policy. 
Other  nationally-financed  capital  expenditure  is  projected  to  provide  a  neutral  contribution  of  0.0 
percentage points of GDP. 

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(19) 

In 2023, the fiscal stance is projected in the Commission 2022 spring forecast at -0.1% 
of GDP on a no-policy  change assumption.18 Slovenia is  projected to  continue using 
the  grants  from  the  Recovery  and  Resilience  Facility  in  2023  to  finance  additional 
investment in support of the recovery. The positive contribution  to economic activity 
of  expenditure  financed  by  Recovery  and  Resilience  Facility  grants  and  other  EU 
funds  is  projected  to  increase  by  0.6  percentage  points  of  GDP  compared  to  2022. 
Nationally-financed investment is projected to provide an expansionary contribution to 
the fiscal  stance of  0.2 percentage points in  2023.19 At the same time, the  growth in 
nationally-financed  primary  current  expenditure  (net  of  new  revenue  measures)  in 
2023 is projected to provide a contractionary contribution of 0.7 percentage points to 
the overall fiscal stance. This includes the impact from the phasing out of the measures 
addressing the increased energy prices (0.4% of GDP). 

(20) 

In  the  2022  Stability  Programme,  the  general  government  deficit  is  expected  to 
gradually decline to 2.1% of GDP in 2024 and to 1.7% by 2025. Therefore, the general 
government deficit is planned to reach 3% of GDP by 2023 and remain below 3% of 
GDP  over  the  Programme  horizon.  According  to  the  Programme,  the  general 
government debt-to-GDP ratio is expected to decrease by 2025, specifically falling to 
69.5%  in  2024  and  declining  further  to  68  %  in  2025.  Based  on  the  Commission’s 
analysis, debt sustainability risks appear high over the medium term.  

(21)  Public  financing  of  the  health  system  is  below  the  EU  average  (72.8%  in  2019  vs 
79.7%  in  the  EU).  However,  healthcare  spending  is  expected  to  increase  by  1.5 
percentage  points  of  GDP  between  2019  and  2070  and  long-term  care  costs  will 
double  by  2055.  Besides  healthcare  and  long-term  care  accessibility  issues  that  are 
already well covered in the recovery and resilience plan, Slovenia is facing high fiscal 
sustainability  risks  in  the  medium  and  long-term,  driven  by  spending  related  to  the 
ageing  population.  The  country  has  started  comprehensive  reforms  in  healthcare  and 
long-term care in recent years. They will be implemented in several steps and mostly 
extend access to high-quality services and improve social rights and inclusion. While 
this will put an additional strain on public finances, it will be crucial for Slovenia to 
put  forward  a  set  of  measures  that  establishes  a  stable  revenue  base  that  does  not 
undermine the fiscal balance in the medium and long-term.  

(22)  On  11  March  2022,  the  National  Assembly  has  adopted  changes  to  the  personal 
income tax law which are estimated to have a negative incremental budgetary impact 
of  0.4%  in  2022,  0.3%  in  2023,  0.3%  in  2024  and  0.3%  in  2025.  Simulations  by 
Slovenia’s Fiscal Council show that the personal income tax cuts could increase public 
debt  by  between  4  and  14  percentage  points  of  GDP  in  the  medium  term.  No 
compensating measures have been proposed so far, while there is considerable room to 
increase tax revenue in Slovenia. For example, Slovenia could generate more revenue 
from  environmental  taxation,  e.g.  by  eliminating  environmentally  harmful  subsidies 
(such  as  the  excise  duty  refund  for  commercial  transport),  indexing  energy  taxes  or 
introducing  distance-based  charges  for  private  cars.  Another  potential  source  of 
revenue would be higher recurrent taxes on immovable property as the current revenue 

18 

19 

A negative (positive) sign of the indicator corresponds to an excess (shortfall) of primary expenditure 
growth  compared  with  medium-term  economic  growth,  indicating  an  expansionary  (contractionary) 
fiscal policy. 
Other  nationally-financed  capital  expenditure  is  projected  to  provide  a  neutral  contribution  of  0.0 
percentage points of GDP. 

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(23) 

is  relatively  low  in  Slovenia  (0.5%  of  GDP  vs  1.2%  of  GDP  in  the  EU  average). 
Bringing  property  values  in  line  with  market  values  and  factoring  in  the  energy 
performance  of  buildings  could  be  growth-friendly,  reduce  inequality  and  promote 
energy efficiency. 

in  2019  and  2020, 

In accordance with Article 19(3), point (b), and Annex V, criterion 2.2, to Regulation 
(EU) 2021/241, the recovery and resilience plan includes an extensive set of mutually 
reinforcing reforms and investments to be implemented by 2026. These help address 
all  or  a  significant  subset  of  the  economic  and  social  challenges  outlined  in  the 
country-specific  recommendations  addressed  to  Slovenia  by  the  Council  in  the 
European  Semester 
to  any  country-specific 
recommendations  issued  up  to  the  date  of  adoption  of  a  plan.  In  particular,  the  plan 
provides  a  suitable  response  to  a  large  set  of  economic,  social  and  environmental 
challenges faced by Slovenia. The plan introduces reforms and investments addressing 
a  significant  subset  of 
the  country-specific 
recommendations to Slovenia as part of the European Semester. In particular, the plan 
addresses  challenges  related  to  fiscal  policies  and  public  finances,  social  safety  nets, 
employment and social, business environment and investments in R&D, and the green 
and digital transition. 

the  challenges 

in  addition 

identified 

in 

(24)  The  implementation  of  the  recovery  and  resilience  plan  of  Slovenia  is  expected  to 
contribute  to  making  further  progress  on  the  green  and  digital  transition.  Measures 
supporting  the  climate  objectives  in  Slovenia  account  for  42.4%  of  the  plan’s  total 
allocation,  while  measures  supporting  digital  objectives  account  for  21.4  %  of  the 
plan’s total allocation. The fully-fledged implementation of the recovery and resilience 
plan,  in  line  with  the  relevant  milestones  and  targets,  will  help  Slovenia  swiftly 
recover  from  the  fallout  of  the  COVID-19  crisis,  while  strengthening  its  resilience. 
The systematic involvement of social partners and other relevant stakeholders remains 
important  for  the  successful  implementation  of  the  recovery  and  resilience  plan,  as 
well  as  other  economic  and  employment  policies  going  beyond  the  plan,  to  ensure 
broad ownership of the overall policy agenda. 

(25)  Slovenia  has  not  yet  submitted  the  Partnership  Agreement  and/  the  other  cohesion 
policy  programming  documents20.  In  line  with  Regulation  (EU)  2021/1060  of  the 
European  Parliament  and  of  the  Council  of  24  June  2021,  Slovenia  shall  take  into 
account  the  relevant  country-specific  recommendations  in  the  programming  of  the 
2021-2027  cohesion  policy  funds.  This  is  a  prerequisite  for  improving  the 
effectiveness and maximising the added value of the financial support to be received 
from  cohesion  policy  funds,  while  promoting  the  coordination,  complementarity  and 
coherence between these funds and other Union instruments and funds. The successful 
implementation  of  the  Recovery  and  Resilience  Facility  and  cohesion  policy 
programmes also depends on the removal of bottlenecks to investment to support the 
green and digital transition and balanced territorial development. 

20 

Regulation  (EU)  2021/1060  of  the  European  Parliament  and  of  the  Council  of  24  June  2021  laying 
down  common  provisions  on  the  European  Regional  Development  Fund,  the  European  Social  Fund 
Plus,  the  Cohesion  Fund,  the  Just  Transition  Fund  and  the  European  Maritime,  Fisheries  and 
Aquaculture Fund and financial rules for those and for the Asylum, Migration and Integration Fund, the 
Internal  Security  Fund  and  the  Instrument  for  Financial  Support  for  Border  Management  and  Visa 
Policy. OJ L 231, 30.6.2021, p. 159. 

EN 

8 

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(26) 

In  response  to  the  mandate  by  the  EU  Heads  of  State  or  Government  set  out  in  the 
Versailles Declaration, the REPowerEU plan aims to phase out the European Union’s 
dependence on fossil fuel imports from Russia as soon as possible. For this purpose, 
the most suitable projects, investments and reforms at national, regional and EU level 
are being identified in dialogue with the Member States. These measures aim to reduce 
overall reliance on fossil fuels and shift fossil fuel imports away from Russia. 

(27)  Slovenia  is  committed  to  phasing  out  of  coal  in  electricity  production  by  2033.  To 
achieve  this  ambitious  target,  the  Slovenian  recovery  and  resilience  plan  includes 
significant reforms and investments aiming to: (i) raise the share of renewable energy 
sources in gross final energy consumption; (ii) facilitate access and integration to the 
electricity grid of renewable energy sources production facilities, and (iii) improve the 
energy  efficiency  and  renovations  of  public  buildings.  The  measures  under  the  plan 
are an important step in removing permitting barriers, but Slovenia could increase its 
efforts.  The  country  could  take  additional  measures  beyond  its  current  recovery  and 
resilience plan to facilitate the permitting of renewable energy sources, including on-
shore wind and solar projects. In its national energy and climate plan, Slovenia set a 
27%  target  as  its  contribution  to  the  EU’s  2030  renewable  energy  target.  This  is 
significantly  below  the  37%  renewable  share  in  2030  based  on  Annex  II  of  the 
Governance  Regulation  (EU)  2018/1999.  Slovenia  reached  its  2020  share  of  energy 
from renewable sources  in gross final consumption of energy target by using the EU 
mechanism of cross-border cooperation in line with Directive 2018/2001/EU (through 
statistical  transfers).  Further  increase  in  ambition  for  reducing  greenhouse  gas 
emissions and increasing of renewable energy and energy efficiency will be needed to 
be  in  line  with  the  ‘Fit  for  55’  objectives.  Therefore,  the  increased  ambition  for 
renewables at EU level and the need to diversify energy supply, further accentuated by 
the new geopolitical  and  energy market  reality,  will require stepping up policies and 
measures  to  support  the  further  deployment  of  renewable  energy.  While  natural  gas 
accounts for only 11.3% of the energy mix, Slovenia imports 100% of its natural gas 
from  Russia,  compared  to  the  EU  average  of  44%,  according  to  2020  data.  Oil 
represents  30.9%  of  Slovenia’s  energy  mix  but  only  13%  of  this  is  imported  from 
Russia.21  Gas  still  plays  a  significant  role  in  the  energy  mix  of  Slovenia  and  is  an 
essential energy source for the industry, while also providing the necessary flexibility 
in the power sector. Due to the high dependency on Russian gas, there may be a need 
to  improve  interconnections  with  neighbouring  Member  States  and  related  gas 
infrastructure  to  diversify  gas  supply.  New  infrastructure  and  network  investments 
related to gas are recommended to be future-proof where possible, in order to facilitate 
their long-term sustainability through future repurposing for sustainable fuels. 

(28)  While  the  acceleration  of  the  transition  towards  climate  neutrality  and  away  from 
fossil  fuels  will  create  significant  restructuring  costs  in  several  sectors,  Slovenia  can 
make  use  of  the  Just  Transition  Mechanism  in  the  context  of  cohesion  policy  to 
alleviate the socio-economic impact  of the transition  in  the most  affected  regions.  In 
addition,  Slovenia  can  make  use  of  the  European  Social  Fund  Plus  to  improve 
employment opportunities and strengthen social cohesion. 

21 

Eurostat (2020), share of Russian imports over total imports. For the EU27 average, the total imports 
are  based  on  extra-EU27  imports.  For  Slovenia,  total  imports  include  intra-EU  trade.  The  oil  figure 
refers to refined oil products.  

EN 

9 

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(29) 

(30) 

In  the  light  of  this  assessment,  the  Council  has  examined  the  2022  Stability 
Programme and its opinion is reflected in recommendation (1) below. 

In view of the close interlinkages between the economies of euro area Member States 
and  their  collective  contribution  to  the  functioning  of  the  Economic  and  Monetary 
Union,  the  Council  recommended  that  the  euro  area  Member  States  take  action, 
including 
the 
recommendation  on  the  economic  policy  of  the  euro  area.  For  Slovenia,  this  is 
reflected in particular in recommendations (1) and (2) below 

resilience  plans, 

recovery  and 

implement 

through 

their 

to 

HEREBY RECOMMENDS that Slovenia take action in 2022 and 2023 to:  

1. 

2. 

3. 

In 2023, ensure that the growth of nationally-financed current expenditure is in line 
with  an  overall  neutral  policy  stance,  taking  into  account  continued  temporary  and 
targeted support to households and firms most vulnerable to energy price hikes and 
to  people  fleeing  Ukraine.  Stand  ready  to  adjust  current  spending  to  the  evolving 
situation.  Expand  public  investment  for  the  green  and  digital  transition  and  for 
energy  security,  including  by  making  use  of  the  RRF,  RePowerEU  and  other  EU 
funds. For the period beyond 2023, pursue a fiscal policy aimed at achieving prudent 
medium-term  fiscal  positions.  Ensure  the  long-term  fiscal  sustainability  of  the 
healthcare and long-term care systems. Introduce compensating measures to finalise 
the  shift  from  labour  taxes,  including  by  rebalancing  towards  more  green  and 
growth-friendly taxes.  

Proceed with the implementation of its recovery and resilience plan, in line with the 
milestones  and  targets  included  in  the  Council  Implementing  Decision  of  28  July 
2021. Submit the 2021-2027 cohesion policy programming documents with a view to 
finalising  their  negotiations with  the  Commission  and  subsequently  starting  their 
implementation.  

Diversify  imports  of  fossil  fuels  and  reduce  overall  reliance  on  fossil  fuels  by 
accelerating  the  deployment  of  renewables,  in  particular  by  further  streamlining 
permitting  procedures,  and  strengthening  of  the  electricity  distribution  network. 
Increase  implementation  of  energy  efficiency  measures,  notably  in  the  building 
sector,  electrification  of  the  transport  sector,  and  by  ensuring  that  energy 
infrastructure and interconnections have sufficient capacity. 

Done at Brussels, 

For the Council 
The President 

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