Recommendation for a COUNCIL RECOMMENDATION endorsing the national medium-term fiscal-structural plan of Slovenia
Date: 2024-11-26
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: Slovenia, budget deficit, coordination of EMU policies, economic reform, fiscal policy, investment, macroeconomics, national planning, public debt, structural adjustment

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   EUROPEAN COMMISSION  Strasbourg, 26.11.2024  COM(2024) 728 final  Recommendation for a COUNCIL RECOMMENDATION endorsing the national medium-term fiscal-structural plan of Slovenia  
 
Recommendation for a 

COUNCIL RECOMMENDATION 

endorsing the national medium-term fiscal-structural plan of Slovenia 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 121 thereof, 

Having regard to Regulation (EU) 2024/1263, and in particular Article 17 thereof, 

Having regard to the recommendation from the Commission, 

Whereas: 

GENERAL CONSIDERATIONS 

(1) 

(2) 

1 

2 

3 

A  reformed  EU  economic  governance  framework  entered  into  force  on  30  April 
2024. Regulation (EU) 2024/1263 of the European Parliament and of the Council on 
the  effective  coordination  of  economic  policies  and  on  multilateral  budgetary 
surveillance1,  together  with  the  amended  Regulation  (EC)  No  1467/97  on  the 
implementation  of  the  excessive  deficit  procedure2,  and  the  amended  Council 
Directive 2011/85/EU on the budgetary frameworks of Member States3 are the core 
elements of the reformed EU economic governance framework. The framework aims 
at  ensuring  public  debt  sustainability  and  sustainable  and  inclusive  growth  through 
reforms  and  investments.  It  promotes  national  ownership  and  has  a  medium-term 
focus, combined with an effective and coherent enforcement of the rules.  

The  national  medium-term  fiscal-structural  plans  that  Member  States  submit  to  the 
Council and to  the Commission, are at  the centre of the new economic  governance 
framework. The plans are to deliver on two objectives: i) ensuring that, by the end of 
the  adjustment  period,  general  government  debt  is  on  a  plausibly  downward 
trajectory, or stays at prudent levels, and that the government deficit is brought and 
maintained below the reference value of 3% of GDP over the medium term, and ii) 
ensuring the delivery of reforms and investments responding to the main challenges 
identified  in  the  context  of  the  European  Semester  and  addressing  the  common 

Regulation 

(EC)  No 

Regulation  (EU)  2024/1263  of  the  European  Parliament  and  of  the  Council  of  29  April  2024  on  the 
effective  coordination  of  economic  policies  and  on  multilateral  budgetary  surveillance  and  repealing 
Council 
ELI: 
http://data.europa.eu/eli/reg/2024/1263/oj). 
Council  Regulation  (EU)  2024/1264  of  29  April  2024  amending  Regulation  (EC)  No  1467/97  on 
speeding  up  and  clarifying  the  implementation  of  the  excessive  deficit  procedure  (OJ  L,  2024/1264, 
30.4.2024, ELI: http://data.europa.eu/eli/reg/2024/1264/oj). 
Council Directive (EU) 2024/1265 of 29 April 2024 amending Directive 2011/85/EU on requirements 
(OJ  L,  2024/1265,  30.4.2024,  ELI: 
for  budgetary 
http://data.europa.eu/eli/dir/2024/1265/oj). 

the  Member  States 

frameworks  of 

2024/1263, 

30.4.2024, 

1466/97 

(OJ 

L, 

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1 

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priorities of the EU. To that end, each plan is to present a medium-term commitment 
to a net expenditure4 path, which effectively establishes a budgetary constraint for the 
duration  of  the  plan,  covering  four  or  five  years  (depending  on  the  regular  term  of 
legislature in  a Member  State). In  addition,  the plan  is  to  explain how the Member 
State  will  ensure  the  delivery  of  reforms  and  investments  responding  to  the  main 
challenges  identified  in  the  context  of  the  European  Semester,  in  particular  in  the 
country-specific recommendations (including those pertaining to the macroeconomic 
imbalances procedure (MIP), if applicable), and how the Member State will address 
the common priorities of the Union. The period for fiscal adjustment covers a period 
of  four  years,  which  may  be  extended  by  up  to  three  years  if  the  Member  State 
commits  to  delivering  a  set  of  relevant  reforms  and  investments  that  satisfies  the 
criteria set out in Regulation (EU) 2024/1263.  

(3) 

(4) 

Following  the  submission  of  the  plan,  the  Commission  is  to  assess  whether  it 
complies with the requirements of Regulation (EU) 2024/1263. 

Upon  a  recommendation  from  the  Commission,  the  Council  is  to  then  adopt  a 
recommendation to set the net expenditure path of the Member State concerned and, 
where  applicable,  endorse  the  set  of  reform  and  investment  commitments 
underpinning an extension of the fiscal adjustment period. 

CONSIDERATIONS  CONCERNING  THE  NATIONAL  MEDIUM-TERM  FISCAL-
STRUCTURAL PLAN OF SLOVENIA  

(5) 

On  15  October  2024,  Slovenia  submitted  its  national  medium-term  fiscal-structural 
plan to the Council and to the Commission. The submission took place following an 
extension  of  the  deadline  set  out  in  Article  36  of  Regulation  (EU)  2024/1263,  as 
agreed with the Commission in view of the reasons provided by Slovenia.  

Process prior to the submission of the plan   

(6) 

On 21 June 2024, the  Commission  sent,  according to  Article 9 of Regulation (EU) 
2024/1263,  the  reference  trajectory5  to  Slovenia.  The  Commission  published  the 
reference trajectory on 15 October 20246. The reference trajectory is risk-based and 
ensures that, by the end of the fiscal adjustment period and in the absence of further 

4 

5 

6 

Net expenditure as defined in Article 2 of Regulation (EU) 2024/1263, namely government expenditure 
net  of  (i)  interest  expenditure,  (ii)  discretionary  revenue  measures,  (iii)  expenditure  on  Union 
programmes fully matched by revenue from Union funds,  (iv) national expenditure on co-financing of 
programmes funded by the Union, (v) cyclical elements of unemployment benefit expenditure and (vi) 
one-offs and other temporary measures.  
Prior  guidance  transmitted  to  the  Member  States  and  Economic  and  Financial  Committee  includes 
trajectories  without  and  with  an  extension  of  the  adjustment  period  (covering  4  and  7  years, 
respectively).  It  also  includes  the  main  initial  conditions  and  underlying  assumptions  used  in  the 
Commission’s  medium-term  government  debt  projection  framework.  The  reference  trajectory  was 
calculated on the basis of the methodology described in the Commission’s Debt Sustainability Monitor 
2023  (https://economy-finance.ec.europa.eu/publications/debt-sustainability-monitor-2023_en).  It 
is 
based on the European Commission  Spring 2024 Forecast and its medium-term extension up to 2033, 
and  long-term  GDP  growth  and  ageing  costs  are  in  line  with  the  joint  Commission-Council  2024 
Ageing  Report  (https://economy-finance.ec.europa.eu/publications/2024-ageing-report-economic-and-
budgetary-projections-eu-member-states-2022-2070_en). 
https://economy-finance.ec.europa.eu/economic-and-fiscal-governance/national-medium-term-fiscal-
structural-plans_en#slovenia  

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budgetary measures beyond the adjustment period, general government debt is on a 
plausibly downward trajectory or stays at prudent levels over the medium term, and 
the  general  government  deficit  is  brought  below  3%  of  GDP  over  the  adjustment 
period  and  maintained  below  that  reference  value  over  the  medium  term.  The 
medium term is defined as the ten-year period after the end of the adjustment period. 
In  accordance  with  Articles  7  and  8  of  Regulation  (EU)  2024/1263,  the  reference 
trajectory  is  also  consistent  with  the  debt  sustainability  safeguard  and  the  deficit 
resilience safeguard. The reference trajectory of Slovenia sets out that, based on the 
Commission’s  assumptions  and  assuming  a  4-year  adjustment  period,  net 
expenditure  should  not  grow  by  more  than  the  values  provided  in  Table  1.  This 
corresponds  to  average  net  expenditure  growth  of  4.4%  over  the  adjustment  period 
(2025-2028).  

Table 1: Reference trajectory provided by the Commission to Slovenia on 21 June 2024 

Maximum net expenditure growth 
(annual, %) 

Source: Commission’s calculations. 

2025 

2026 

2027 

2028 

Average 2025-2028 

4.9 

4.5 

4.3 

4.2 

4.4 

(7) 

(8) 

(9) 

In line with Article 12 of Regulation (EU) 2024/1263, Slovenia and the Commission 
engaged in a technical dialogue in July and September 2024. The dialogue centred on 
the  net  expenditure  path  envisaged  by  Slovenia  and  its  underlying  assumptions,  as 
well  as  the  envisaged  delivery  of  reforms  and  investments  responding  to  the  main 
challenges  identified  in  the  context  of  the  European  Semester  and  the  common 
priorities  of  the  Union  in  fair  green  and  digital  transition,  social  and  economic 
resilience, energy security and the build-up of defence capabilities. 

In October 2024, in line with Article 11(3) and 36(1), point (c) of Regulation (EU) 
2024/1263,  according to  the information  provided by Slovenia in  its  plan,  Slovenia 
engaged  in  a  consultation  process  with  social  partners  and  other  relevant 
stakeholders.  According  to  the  information  provided  by  Slovenia  in  its  plan,  the 
Economic and Social Committee and other relevant stakeholders commented on the 
draft  plan  including  on  reforms  and  about  assessing  needs  related  to  the  green 
transition. 

The  Slovenian  Fiscal  Council  delivered  an  opinion  on  the  plan  on  21  October.  To 
assess risks to the commitments from the plan, the Fiscal Council prepared its own 
public  finance  projections.  It  concluded  that  deviations  from  the  projected  general 
government balance and debt path could materialise especially in the second part of 
the  adjustment  period,  due  to  increased  expenditure  related  to  the  compensation  of 
public employees and in the field of healthcare. The Fiscal Council indicated a need 
for additional compensatory measures to fulfil the commitments from the plan. 

(10) 

The  draft  plan  was  discussed  in  the  national  parliament  on  4  October  2024.  It  was 
consequently adopted by the government on 10 October 2024. 

Other related processes  

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(11) 

(12) 

On 15 October 2024, Slovenia submitted its Draft Budgetary Plan for the year 2025. 
The Commission adopted an opinion on this Draft Budgetary Plan on [26 November 
2024]7. 

On 21 October 2024, the Council addressed to Slovenia a series of country-specific 
recommendations (CSRs) in the context of the European Semester8.  

SUMMARY OF THE PLAN AND THE COMMISSION’S ASSESSMENT THEREOF  

(13) 

In line with Article 16 of Regulation (EU) 2024/1263, the Commission assessed the 
plan as follows: 

Context: macroeconomic and fiscal situation and outlook  

(14) 

(15) 

Economic  activity  in  Slovenia  grew  by  2.1%  in  2023,  mainly  driven  by  domestic 
demand and net exports. Inventory decumulation, however, lowered GDP growth by 
1.5  percentage  points.  According  to  the  European  Commission  Autumn  2024 
Forecast,  the  economy  is  expected  to  grow  by  1.4%  in  2024,  supported  by  private 
and public consumption and inventory accumulation, despite a negative contribution 
from  net  exports.  In  2025,  real  GDP  is  set  to  increase  by  2.5%,  as  private 
consumption is projected to continue to grow strongly, and investment growth is set 
to  accelerate.  In  2026,  real  GDP  is  expected  to  increase  by  2.6%,  as  private  and 
public  consumption  and  investment  are  forecast  to  continue  growing.  Over  the 
forecast horizon (i.e., 2024-2026), potential GDP growth in Slovenia is expected to 
marginally  decline  from  2.6%  in  2023  to  2.5%  in  2026,  driven  by  a  lower 
contribution  from  labour.  The  unemployment  rate  stood  at  3.7%  in  2023,  and  is 
projected by the Commission to amount to 3.5% in 2024, 3.6% in 2025 and 3.6% in 
2026. Inflation (GDP deflator) is projected to decrease from 7.2% in 2023 to 2.1% in 
2024, and to reach 3.2% in 2025 and 2.1% in 2026.  

Regarding  fiscal  developments,  in  2023  Slovenia’s  general  government  deficit 
amounted  to  2.6%  of  GDP.  According  to  the  European  Commission  Autumn  2024 
Forecast,  it  is  set  to  reach  2.4%  of  GDP  in  2024  and  to  decline  further  to  2.1%  of 
GDP  in  2025  and,  on  a  no-policy  change  basis,  to  stabilise  at  2.1%  in  2026.  The 
European  Commission  Autumn  2024  Forecast  includes  Slovenia’s  draft  budget  for 
2025 that the government proposed to the national parliament in September. General 
government  debt  was  68.4%  of  GDP  at  end-2023.  According  to  the  European 
Commission Autumn 2024 Forecast, the debt ratio is expected to decline to 67.1% of 
GDP at end-2024. It is projected to decline further to 64.4% of GDP at end-2025 and 
63.1%  at  end-2026.  The  fiscal  forecast  by  the  Commission  does  not  consider  the 
policy commitments in the medium-term plans as such until they are underpinned by 
credibly announced and sufficiently specified concrete policy measures. 

Net expenditure path and main macroeconomic assumptions in the plan 

7 
8 

Commission Opinion on the Draft Budgetary Plan of Slovenia, 26.11.2024, C(2024)9064 final. 
Council Recommendation on economic, budgetary, employment and structural policies of Slovenia, not 
yet published. 

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(16) 

(17) 

(18) 

Slovenia’s national medium-term fiscal-structural plan covers the period 2025-2028 
and presents a fiscal adjustment over four years.  

The  plan  contains  all  information  required  by  Article  13  of  Regulation  (EU) 
2024/1263.  

The plan commits to the net expenditure path indicated in Table 2, corresponding to 
an average net  expenditure growth  of 4.5% over the years  2025-2028. The average 
net expenditure growth reported in the plan over the adjustment period (2025-2028) 
is  higher  than  the  reference  trajectory  transmitted  by  the  Commission  on  21 June 
2024.  The  plan  assumes  potential  GDP  growth  to  gradually  decline  from  2.9%  in 
2024  to  2.1%  in  2028.  In  addition,  the  plan  expects  the  growth  rate  of  the  GDP 
deflator to increase from 3.0% in 2024 to 3.7% in 2025, before declining to 2.9% in 
2026 and 2.8% in 2028.  

Table 2: Net expenditure path and main assumptions in Slovenia’s plan  

2024 

2025 

2026 

2027 

2028 

Average over the 
period of validity of 
the plan 

2025-2028 

6.2 

5.6 

4.4 

4.1 

4.0 

4.5 

6.2 

12.1 

17.0 

21.8 

26.6 

n.a. 

2.9 

2.8 

2.4 

2.2 

2.1 

3.0 

3.7 

2.9 

2.9 

2.8 

2.4 

3.1 

Net expenditure 
growth 
(annual, %) 

Net expenditure 
growth 
(cumulative, from 
base year 2023, %) 

Potential GDP 
growth (%) 

Inflation (GDP 
deflator growth) (%) 

Source: Medium-term fiscal-structural plan of Slovenia and Commission calculations 

Implications of the plan’s net expenditure commitments for general government debt  

(19) 

If the net expenditure path committed to in the plan and the underlying assumptions 
materialise,  general  government  debt  would,  according  to  the  plan,  gradually 
decrease from 67.5% in 2024 to 61.2% of GDP at the end of the adjustment period 
(2028), as per the following table. After the adjustment, over the medium term (i.e. 
until  2038),  the  debt  ratio,  is  on  a  declining  path  until  2035  according  to  the  plan, 
reaching 54.5% of GDP. Afterwards it would slowly increase to 55.6% of GDP by 
2038. 

Table 3: General government debt and balance developments in Slovenia’s plan  

2023 

2024 

2025 

2026 

2027 

2028 

2038 

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Government debt 

(% of GDP) 

Government balance 

(% of GDP) 

68.4 

67.5 

65.4 

64.2 

62.8 

61.2 

55.6 

-2.6 

-2.9 

-2.6 

-1.9 

-1.6 

-1.2 

-2.8 

Source: Medium-term fiscal-structural plan of Slovenia 

Thus,  according  to  the  plan,  general  government  debt  would  be  brought  below  the 
Treaty reference value of 60% of GDP over the medium term. This is plausible based 
on the plan’s assumptions, as debt would be projected to stand below 60% of GDP 
by 2038 under all deterministic stress tests of the Commission’s Debt Sustainability 
Analysis.  Therefore,  based  on  the  plan’s  policy  commitments  and  macroeconomic 
assumptions, the net expenditure path put forward in the plan  is consistent with the 
requirement for debt as set out in Articles 6, point (a), and 16(2) of Regulation (EU) 
2024/1263. 

Implications  of  the  plan’s  net  expenditure  commitments  for  the  general  government 
balance 

(20) 

Based  on  the  plan’s  net  expenditure  path  and  assumptions,  the  general  government 
deficit  would  gradually  decrease  from  2.9%  of  GDP  in  2024,  to  1.2%  of  GDP  in 
2028. Thus, according to the plan, the general government balance would not exceed 
the 3% of GDP reference value at the end of the adjustment period 2028. In addition, 
in  the  ten  years  following  the  adjustment  period  (i.e.  until  2038),  the  government 
deficit  would  not  exceed  3%  of  GDP.  Therefore,  based  on  the  plan’s  policy 
commitments and macroeconomic assumptions, the net expenditure path put forward 
in the plan is consistent with the requirement for the deficit as set out in Articles 6, 
point (b), and 16(2) of Regulation (EU) 2024/1263.  

Time profile of the fiscal adjustment 

(21) 

The  time  profile  of  the  fiscal  adjustment,  measured  as  the  change  in  the  structural 
primary balance, as described in the plan, is linear, as required by Article 6, point (c), 
of Regulation (EU) 2024/1263.  Therefore, based on the plan’s policy commitments 
and macroeconomic assumptions, the net expenditure path put forward in the plan is 
consistent  with  the  no-backloading  safeguard  clause  set  out  in  Article  6,  point  (c), 
and  the  transitional  provision  in  Article  36(1),  point  (e),  of  Regulation  (EU) 
2024/1263.  

Table 4: Structural primary balance developments in Slovenia’s plan  

Structural primary balance 

(% of GDP) 

2023 

2024 

2025 

2026 

2027 

2028 

-1.8 

-1.3 

-0.9 

-0.4 

0.0 

0.5 

Change in structural primary balance 

n.a. 

0.5 

0.4 

0.4 

0.4 

0.4 

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(pps.) 

Source: Medium-term fiscal-structural plan of Slovenia 

Consistency of the plan with the deficit resilience safeguard 

(22) 

In accordance with Article 8 of Regulation (EU) 2024/1263, the annual adjustment in 
the structural primary balance should not be less than 0.4 percentage point of GDP if 
the structural deficit remained above 1.5% of GDP in the preceding year, to achieve 
a common resilience margin  in  structural  terms of  1.5% of GDP. The  annual  fiscal 
adjustment  that  results  from  the  plan’s  policy  commitments  and  macroeconomic 
assumptions amounts to 0.4% of GDP throughout the adjustment period. Therefore, 
based  on  the  plan’s  policy  commitments  and  macroeconomic  assumptions,  the  net 
expenditure  path  put  forward  in  the  plan  is  consistent  with  the  deficit  resilience 
safeguard.  

Consistency of the plan with the debt sustainability safeguard 

(23) 

In accordance with Article 7 of Regulation (EU) 2024/1263, as  general government 
debt will be between 60% and 90% of GDP over the adjustment period according to 
the  plan,  the  debt  ratio  is  required  to  decline  by  at  least  0.5  percentage  points  on 
average per year until it falls below 60%. This average decline is calculated over the 
period  2024-2028  and  amounts  to  1.6  percentage  points  (see  Table  3).  Therefore, 
based  on  the  plan’s  policy  commitments  and  macroeconomic  assumptions,  the  net 
expenditure  path  put  forward  in  the  plan  is  consistent  with  the  debt  sustainability 
safeguard.  

Macroeconomic and fiscal assumptions of the plan 

(24) 

The  plan  is  based  on  a  set  of  assumptions  which  differ  from  the  Commission’s 
assumptions  transmitted  to  Slovenia  on  21  June  2024.  In  particular,  the  plan  uses 
different  assumptions  for  eight  variables,  namely  the  updated  historical  data,  the 
2024  starting  position  (including  the  primary  deficit  and  the  share  of  primary 
expenditure in 2024), potential GDP growth, GDP deflator growth, real GDP growth, 
interest  rates,  stock-flow  adjustments  and  one-offs.  A  careful  assessment  of  these 
differences in assumptions is necessary, especially as average net expenditure growth 
in the plan is higher than in the reference trajectory. The differences in assumptions 
with the most significant impact on average net expenditure growth are listed below, 
together  with  an  assessment  of  each  difference  in  assumptions  considered  in 
isolation. 

• 

• 

The  plan  assumes  lower  potential  GDP  growth  by  0.1  percentage  point  on 
average between 2024 and 2033, based on updated model calculations which 
take  revised  and  new  data  into  account,  compared  to  the  assumptions 
underlying the reference trajectory. This assumption is cautious and therefore 
duly justified. It contributes to lower average net expenditure growth over the 
adjustment period in the plan relative to the Commission’s assumptions.  

The  plan  assumes  the  GDP  deflator  for  2025  to  be  considerably  higher 
compared  to  the  assumptions  underlying  the  reference  trajectory,  while 
deflator  growth  for  the  remaining  years  of  the  adjustment  period  remains 

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aligned with that of the reference trajectory. The plan also uses updated data 
based  on  market  expectations.  This  contributes  to  higher  average  net 
expenditure growth over the adjustment period in the plan than according to 
the Commission’s assumptions. The GDP deflator is projected to increase in 
2025 compared to 2024 due to the start of the public sector wage reform and 
higher projected inflation in 2025. Inflation is forecast to increase as a result 
of  the  withdrawal  of  remaining  measures  to  mitigate  the  impact  of  high 
energy  prices  (reintroduction  of  a  contribution  to  support  the  production  of 
electricity  from  renewable  energy  sources  and  co-generation  with  high 
efficiency) as well as additional taxation of beverages (e.g. alcohol beverages 
and beverages with  added sugar). This  assumption  includes the latest  policy 
decisions and the most recent data and is thus deemed to be duly justified. 

The remaining differences do not have a significant impact on average net expenditure 
growth  compared  to  the  Commission’s  assumptions.  Overall,  all  the  differences  in 
assumptions taken together lead to an average net expenditure growth in the plan that 
is  higher  than  the  reference  trajectory.  Based  on  this  assessment,  the  plan  fulfils  the 
requirement under Article 13(b) of Regulation (EU) 2024/1263. The Commission will 
take into account the above assessment of the plan’s assumptions in future assessments 
of compliance with this recommendation.   

Fiscal strategy of the plan 

(25) 

According  to  the  indicative  fiscal  strategy  in  the  plan,  the  commitments  on  net 
expenditure will be delivered through expenditure restraint and discretionary revenue 
increases.  For  2025,  the  plan  announces  a  new  mandatory  long-term  care 
contribution  to  be  levied  as  of  1  July  2025,  a  higher  CO2  emission  tax,  higher 
taxation  for alcoholic beverages  and beverages with  added sugar,  and a withdrawal 
of the remaining measures to mitigate the impact of high energy prices. The revenue 
gains  will  be  partially  offset  by  potential  expenditure  increases  stemming  from  the 
public  sector  wage  reform  to  be  gradually  introduced  over  2025-2028.  The  plan 
states that the Internal Audit Public Finance Service at the Ministry of  Finance will 
start addressing shortcomings of the current internal audit of public finances in 2025. 
In addition, in 2026 and beyond, the plan envisages further tax measures, a pension 
and long-term care reform, and the health reform. The pension, health, and long-term 
care  reforms  and  the  public  sector  wage  reform  are  included  in  the  recovery  and 
resilience  plan  (RRP).  The  government  has  agreed  to  draft  amendments  to  the 
pension legislation and is currently engaged in a consultation with the social partners. 
The  long-term  care  reform  has  been  adopted  and  is  gradually  implemented  with  a 
new  mandatory  contribution  entering  into  force  in  2025.  The  specification  of  the 
policy  measures  to  be  adopted  is  to  be  confirmed  or  adjusted  and  quantified  in  the 
annual  budgets.  At  the  same  time,  there  are  risks  to  the  implementation  of  the 
indicative  fiscal  strategy  in  the  plan,  arising  from  expenditure  overruns  linked  to 
ongoing  reforms  of  the  public  sector  wage  system,  the  long-term  care  and  health 
reforms, as well as to large investment projects. In addition, the Draft Budgetary Plan 
for  2025  specifies  the  policy  measures  through  which  the  net  expenditure 
commitment for 2025 will be achieved9.  

9 

See Commission Opinion on the Draft Budgetary Plan of Slovenia, 26.11.2024, C(2024)9064 final. 

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Reform and investments responding to the main challenges identified in the context of 
the European Semester and addressing the common priorities of the Union  

(26) 

(27) 

(28) 

The plan describes policy intentions concerning reforms and investments to respond 
to the main challenges identified in the context of the European Semester especially 
the CSRs, and to address the common priorities of the EU. The plan includes seven 
comprehensive  reforms  (pension  reform,  health  reform,  long-term  care  reform, 
public  sector  wage  system  reform,  housing  policy,  changes  in  education  and  tax 
changes).  The  plan  also  includes  measures  in  other  areas,  like  on  boosting 
productivity,  the  green  and  digital  transitions.  The  plan  includes  more  than  40 
reforms and investments. 

Concerning the common priority of a fair green and digital transition, including the 
climate  objectives  set  out  in  Regulation  (EU)  2021/1119,  the  plan  includes  several 
legislative and non-legislative acts. Among others, a Climate Act is being prepared to 
tackle  climate  changes  and  achieve  climate  neutrality  in  Slovenia  by  2045.  In  this 
context, Slovenia intends to strengthen measures against climate change and climate 
disasters,  with  a  focus  on  floods.  Several  investments  are  aimed  at  boosting  the 
circular  economy,  by  increasing  the  efficient  use  of  resources,  promoting  eco-
innovations  and  improving  waste  management.  A  Transport  Development  Strategy 
2030  focuses  on  the  comprehensive  planning  of  sustainable  transport  and  mobility. 
Slovenia is implementing goals defined in the Digital Transformation Strategy 2030, 
also reflected in the National Digital Decade Strategic Roadmap 2030. This includes 
measures  in  the  area  of  connectivity  from  the  2030  Gigabit  Infrastructure 
Development  Plan,  in  the  area  of  advanced  digital  technologies  and  infrastructure 
and digital transformation of businesses and digital skills (e.g. Promotion of Digital 
Inclusion Act). Several strategic documents, such as the Gigabit Infrastructure Plan 
2030, the Strategy for Digital Transformation of the Economy 2030 and the Digital 
Public  Services  Strategy  2030,  are  being  implemented.  Several  of  the  measures 
supported by the RRP and cohesion policy funds are also put forward as intended to 
address the common priority of a fair green and digital transition, for instance digital 
transformation  of  the  economy  (business  and  industry),  greening  education 
infrastructure  in  Slovenia,  comprehensive  transformation  of  green  and  digital 
education  and 
infrastructure  capacity.  The  reforms  and 
investments included in the plan intend to address the 2019 and 2020 CSRs to focus 
investment-related  economic  policy  on  research  and  innovation,  low  carbon 
transition, sustainable transport, such as   railways and environmental infrastructure, 
taking  into  account  regional  disparities;  2020  CSR  to  promote  digital  capacities  of 
businesses and strengthen digital skills, e-commerce and e-health; and 2022 CSR to 
expand public investment for the green and digital transition.  

increasing  railway 

Concerning  the  common  priority  of  social  and  economic  resilience,  including  the 
European  Pillar  of  Social  Rights,  the  plan  includes  several  legislative  and  non-
legislative  acts.  The  main  measures  put  forward  are  the  pension  reform,  the 
healthcare  reform  and  the  reform  of  the  long-term  care.  The  plan  states  that  the 
pension reform will ensure the sustainability of the pension system, an adequate level 
of pensions, and will be complemented with further labour market measures, to boost 
participation  of,  in  particular,  older  workers.  The  Plan  describes  several  policy 
measures  and  investments  adopted  and  planned  in  the  area  of  education,  skills  and 
life-long  learning  and  refers  to  a  preparation  of  an  Action  Plan  for  increasing 
productivity and competitiveness. Other measures include a Strategy for Developing 
the Capital Market in Slovenia over 2023-2030. The plan also includes the adoption 

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of  Slovenia’s  startup  strategy.  Changes  in  the  financing  of  scientific  research  and 
innovation activities aim to boost investment in R&D to 3.5% of GDP by 2030. The 
plan includes planned policy measures for the affordability of housing. Several of the 
measures supported by the RRP and EU cohesion policy, including those in the Pillar 
III of the Just Transition Fund, also intend to address the common priority of social 
and  economic  resilience,  for  instance  strengthening  the  stock  of  public  rental 
housing, effective treatment of communicable diseases, faster entry of young people 
into  the  labour  market  and  structural  measures  to  strengthen  the  resilience  of  the 
labour  market,  ensure  skilled  workforce  and  address  labour  shortages.  Several 
measures have been adopted or planned to facilitate and speed up the integration of 
foreign  workers  into  the  labour  market  and  society.  The  reforms  and  investments 
included  in  the  plan  intend  to  address  the  2019  and  2024  CSR  to  ensure  the  long-
term  sustainability  and  adequacy  of  the  pension  system;  2019  CSR  to  increase  the 
employability of low-skilled and older workers; 2019 CSR to improve competition, 
professionalisation  and  independent  oversight  in  public  procurement  (addressed 
through  the  RRP);  2020  CSR  to  enhance  short-time  work  schemes  and  flexible 
working  arrangements  and  ensure  that  these  measures  provide  adequate  protection 
for  non-standard  workers;  2019,  2020,  2022,  2023  and  2024  CSRs  to  ensure  the 
resilience and long-term sustainability of the health and long-term care system; 2022, 
2023  and  2024  CSRs  to  rebalance  tax  revenues  towards  more  growth-friendly  and 
sustainable sources; 2019, 2020 and 2024 CSRs to create high-growth companies by 
improving  the  conditions  for  venture  capital  investment  and  institutional  investors, 
provide liquidity and financing to businesses and support the development of equity 
markets  and  improve  the  business  environment;  and  2024  CSR  to  strengthen 
competitiveness  by  boosting  skills.  However,  the  plan  does  not  include  reforms  to 
address  the  implementation  of  spending  reviews  and  the  management  of  public 
investments. While steps are taken to strengthen the internal control mechanism, no 
specific measures  are included to  improve the planning,  selection and budgeting of 
public  investments  from  2024  CSR  and  no  specific  measures  are  included  to  carry 
out privatisations in line with the existing plans from 2019 CSR. 

Concerning  the  common  priority  of  energy  security,  the  plan  includes  several 
legislative and non-legislative acts. Among other acts, it refers to the adopted Energy 
Act,  and  among  those  still  under  preparation,  to  the  final  updated  National  Energy 
and  Climate  Plan  (NECP)  and  the  Act  on  the  Restructuring  of  the  Velenje  Mine. 
Several  of  the  measures  supported  by  the  RRP,  in  particular  the  REPowerEU 
component, and the Just Transition Fund under EU cohesion policy, also contribute 
to  the  common  priority  of  energy  security,  for  instance  by  strengthening  the 
electricity  distribution  network  and  the  planning  and  financing  of  the  energy 
renovation of buildings in the public sector and  the deployment  of alternative fuels 
infrastructure. The reforms and investments included in the plan intend to address the 
2022  and  2023  CSRs  to  reduce  overall  reliance  on  fossil  fuels  by  accelerating  the 
deployment  of  renewables  and  increase  implementation  of  energy  efficiency 
measures;  and  2022  and  2023  CSRs  to  promote  the  electrification  of  the  transport 
sector.  

Concerning  the  common  priority  of  defence  capabilities,  the  plan  includes  the 
adopted Act on the Provisioning of Investments Funds for the Slovenian Army in the 
2021 to 2026 period, which provides EUR 780 million for the army.  

The  plan  provides  information  on  the  consistency  and,  where  appropriate, 
complementarity,  with  EU  cohesion  policy  funds  and  Slovenia’s  RRP.  The  plan 

(29) 

(30) 

(31) 

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(32) 

refers  to  several  policies  which  are  supported  through  the  RRP  and  EU  cohesion 
funds. Moreover, the plan includes correlation tables on which policy areas, financed 
with the Programme of European Cohesion Policy 2021-2027, address what CSRs. 

The  plan  provides  an  overview  of  the  priority  public  investment  needs  of  Slovenia 
related to the common priorities of the EU. Concerning the common priority of a fair 
green  and  digital  transition,  including  the  climate  objectives,  the  plan  identifies 
investment  needs  in  efficient  use  of  energy,  transport  infrastructure  (railways)  and 
sustainable  mobility.  The  latter  includes  cycling  infrastructure,  multimodal  hubs  as 
well  as  improved  public  transport  infrastructure  and  pedestrian  infrastructure. 
Concerning  the  common  priority  of  social  and  economic  resilience,  including  the 
European Pillar of Social Rights, the plan identifies investment needs in the fields of 
healthcare,  long-term  care  and  housing  policy.  Concerning  the  common  priority  of 
energy  security,  the  plan  identifies  investment  needs  in  connectivity  of  energy 
systems  and  networks,  for  production  capacities  (solar  power  plants)  and  for  just 
transition  of  the  coal  regions.  The  plan  aims  to  contribute  to  meet  the  public 
investment needs of Slovenia related to the common priorities of the EU. Concerning 
the common priority of defence capabilities, the plan identifies investment needs in 
combat  capabilities  and  for  their  support,  logistics,  military  infrastructure  and  in 
capacities  for  command  and  control.  According  to  the  plan,  the  Resolution  on  the 
General  Long-term  Development  and  Equipment  Program  of  the  Slovenian  Armed 
Forces  until  2040  plans  to  achieve  defence  expenditure  at  2%  of  GDP  by  2030,  in 
alignment  with  NATO  commitment.  20%  of  defence  expenditure  is  planned  to  be 
allocated to investment. 

Conclusion of the Commission’s assessment 

(33) 

Overall, the Commission is of the view that Slovenia’s plan fulfils the requirements 
of Regulation (EU) 2024/1263. 

OVERALL CONCLUSION 

(34) 

In  accordance  with  Article  17  of  Regulation  (EU)  2024/1263,  the  net  expenditure 
path as set in the plan should be recommended by the Council to Slovenia. 

HEREBY RECOMMENDS that Slovenia 

1. 

Ensures that net expenditure growth does not exceed the maxima established in Annex 
I to this Recommendation. 

In  addition,  the  Council  invites  Slovenia  to  ensure  the  delivery  of  reforms  and  investments 
responding  to  the  main  challenges  identified  in  the  context  of  the  European  Semester,  in 
particular the country-specific recommendations, and addressing the common priorities of the 
Union.  

ANNEX I 
Maximum growth rates of net expenditure 
(annual and cumulative growth rates, in nominal terms) 
Slovenia 

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Years 

2025 

2026 

2027 

2028 

Growth rates 
(%) 

Annual  

5.6 

4.4 

4.1 

4.0 

Cumulative 

(*) 

12.1 

17.0 

21.8 

26.6 

(*) The cumulative growth rates are calculated by reference to the base year of 2023. 

Done at Strasbourg, 

For the Council 
The President 

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