Development Minister Joze P. Damijan resigned for personal reasons on Tuesday, 21 March after heading the government's newly-established Development Office for less than three months. This gave rise to speculations that the reforms he authored, in particular the beleaguered flat tax, will be shelved. Prime Minister Janez Jansa said he "regrets, but respects" the decision. However, he was also quick to point out that the reforms will proceed as planned, also thanks to Damijan.
The resignation also lend credence to reports that he was resigning due to disagreements with Finance Minister Andrej Bajuk over the privatisation of Slovenia's largest bank, NLB, but Damijan denied this in his letter of resignation. Instead, rumours spread that he had been involved in insider trading in shares of telco group Telekom Slovenije, which is in the process of being privatised.
Damijan in effect told business daily Finance on Thursday, 24 March, that he did not resign over abuse of insider information in the privatisation of the telco, rather due to a spat with the cabinet about the privatisation of NLB. "My personal views regarding the withdrawal of the state from the economy are somewhat different from views of some ministers. Therefore, I cannot change my statement that I resigned for personal reasons," Damijan explained.
The responses to the resignation varied: LDS leader Jelko Kacin said the move the PM a chance to appoint a new minister and thus cover up the crisis in government and governance; for the SD, which looks set to join the PM's partnership for reform, the move is not a good sign for the reforms, but neither is it a fatal blow. As for economists, Franci Krizanic said the resignation means the death of the flat tax, while Mico Mrkaic, who used to chair the Government Strategic Council for Economic Development, said that it has now become clear that the government is not serious about reforms.
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