
Ljubljana – The government has assured that the medium-term sustainability of public finances will remain intact in the coming years, despite an increase in defense spending. On Tuesday, the government approved its stance regarding the Fiscal Council’s evaluation of the draft annual report on progress for 2025. The Fiscal Council raised concerns about potential pressures on public finances stemming from heightened defense expenditures and possible economic downturns, particularly related to ongoing trade tensions.
The European Commission has urged member states to jointly request activation of the national derogation clause, which would permit increased defense spending that exceeds fiscal commitments for the next four years. The Ministry of Finance stated that the government plans to submit this request to both the European Commission and the EU Council, and in compliance with fiscal regulations, the Fiscal Council will issue an opinion on the presence of exceptional circumstances beforehand.
According to the Ministry of Finance, the government will seek to invoke the national derogation clause, considering the Fiscal Council’s assessment, while also submitting the annual report on progress. The deadline to submit this report to the European Commission is April 30. The government is not expected to fully utilize the national derogation clause in the early years, which the Ministry of Finance believes will safeguard the medium-term sustainability of public finances.
Forecasts indicate that the state sector deficit, anticipated to be 0.9 percent of GDP in 2024, is set to increase to 1.9 percent of GDP for this fiscal year, with an average of approximately 1.8 percent of GDP over the following three years. The state budget reported a deficit of 454 million euros during the first quarter of this year, which is nearly 20% higher than the deficit recorded during the same period in 2024. (April 22)













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