Updated convergence programme of Slovenia, 2005-2008 - Main contents
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official title
Council opinion of 14 February 2006 on the updated convergence programme of Slovenia, 2005-2008| Legal instrument | Opinion |
|---|---|
| Original proposal | SEC(2006)112  |
| CELEX number i | 32006A0307(12) |
| Document | 14-02-2006 |
|---|---|
| Publication in Official Journal | 07-03-2006; OJ C 55 p. 45-48 |
| End of validity | 31-12-9999 |
7.3.2006 |
EN |
Official Journal of the European Union |
C 55/45 |
COUNCIL OPINION
of 14 February 2006
on the updated convergence programme of Slovenia, 2005-2008
(2006/C 55/12)
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community,
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 policies (1), and in particular Article 9(3) thereof,
Having regard to the recommendation of the Commission,
After consulting the Economic and Financial Committee,
HAS DELIVERED THIS OPINION:
(1) |
On 14 February 2006 the Council examined the updated convergence programme of Slovenia, which covers the period 2005 to 2008. |
(2) |
Following a transition recession in the early nineties, the Slovene economy fully restored robust GDP growth averaging nearly 4 % over the last decade. By the end of 2005, inflationary pressures have been curbed and consumer price growth approached the EU average. The general government balance slipped in 1997 and has stayed negative since then, with deficits averaging 3 % of GDP on an ESA95 basis in the period 2000-2004. |
(3) |
In its opinion of 8 March 2005 on the previous update of the convergence programme, covering the period 2004-2007, the Council invited Slovenia to (i) seize all opportunities to accelerate the reduction of the general government deficit, and (ii) undertake further measures to improve the long-term sustainability of the public finances, including the reforms of the pension and health-care systems. |
(4) |
As regards budgetary implementation in 2005, the general government deficit for 2005 is estimated at 1,7 % of GDP in the Commission services' autumn 2005 forecast, against a target of 2,1 % of GDP set in the previous update of the convergence programme. The preliminary outcome is better than expected as a result of better revenue collection and a net 0,5 % GDP lower general government expenditure. |
(5) |
The updated programme broadly follows the model structure and data provision requirements for stability and convergence programmes specified in the new code of conduct (2). |
(6) |
The macroeconomic scenario underlying the programme envisages that real GDP will grow steadily at around 4 % beyond 2005. Assessed against currently available information, this scenario appears to be based on plausible growth assumptions. Cyclical conditions are likely to improve gradually; the negative output gap, estimated to have stood at 1 % of GDP in 2005, is forecast to close by the end of the period. The programme's projections for inflation also appear realistic. The programme lists a comprehensive set of socio-economic reforms aiming at enhancing the competitiveness of the Slovene industry, the modalities and implementation of which will be determined in the course of 2006. However, the projections consistently follow a no-policy change approach. |
(7) |
The updated programme aims at creating conditions for a successful EMU integration while catching up with average EU income levels. The budgetary strategy is geared to keeping the general government deficit well below 3 % of GDP and targets to achieve the medium-term objective (MTO) for the budgetary position as meant in the Stability and Growth Pact by 2008. The programme announces tax reform measures, leading to a drop in the share of revenue as a percentage of GDP by 1,8 %, and measures on the expenditure side, resulting in a decline in the expenditure ratio by 2,5 % of GDP. The programme envisages a back-loaded consolidation path. In the beginning of the programme period, the general government deficit is expected to linger at 1,7 % of GDP and then slowly decrease to 1,4 % in 2007 and further to 1,0 %... |
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