Govt Supplements Convergence Programme
The government has adopted supplements to the Convergence Programme, passed in May 2004, and authorised the Finance Ministry to submit it to the European Commission and the Council of Ministers. Preparations for the introduction of the single European currency meanwhile also topped the agenda of a meeting of PM Janez Jansa and Finance Minister Andrej Bajuk with the central bank governor Mitja Gaspari and vice-governor Andrej Rant on Friday.
The principal objective of the Slovenian economic policy in the medium term is to meet the conditions for the adoption of the euro at the beginning of 2007. This requires lower inflation that will be in line with the price stability criterion.
The public finance policy will aim to gradually diminish the general government deficit and to contribute to meeting the nominal and real convergence goal with fiscal policy measures.
Structural deficit is to be gradually reduced from 1.7% of GDP in 2004 to 1.1% of GDP in 2007. The deficit will not exceed the 3% reference limit set by the Maastricht criteria, while the state will continue to fund major infrastructure investments.
In line with the anticipated macroeconomic situation in 2005, the government aims the general government deficit to remain below 2.1% of GDP. The deficit is to be reduced to 1.2% of GDP by 2007 according to the present macroeconomic scenario.
The government plans to meet these goals without increasing the general fiscal burden and gradually restructuring public-finance revenues and expenditures so as to contribute to the competitiveness of the economy and to economic growth.
The general government debt should not exceed 31% of GDP in that period, the Finance Ministry said.
Convergence programmes are drafted as part of the Stability and Growth Pact under the European Monetary Union (EMU). Programmes are updated annually.
Preparations for the introduction of the euro also topped the agenda of a meeting of PM Jansa and Finance Minister Bajuk with the central bank governor Gaspari and vice-governor Rant.
The officials exchanged information and positions regarding the preparations and priorities of the Slovenian entry to the EMU and technical preparations for the introduction of the euro as legal tender in Slovenia, the PM office said.
A session of a group coordinating preparations for euro introduction, co-chaired by a government and central bank officials, is scheduled shortly, the office said.
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