European Commission
Europe 2020

Country-specific Recommendations

The Country-specific Recommendations are documents prepared by the European Commission for each country, analysing its economic situation and providing recommendations on measures it should adopt over the coming 12 months. They are tailored to the particular issues the Member State is facing and cover a broad range of topics: the state of public finances, reforms of pension systems, measures to create jobs and to fight unemployment, education and innovation challenges, etc. The final adoption of Country-specific Recommendations prepared by the Commission is done at the highest level by national leaders in the European Council.

Proposed recommendations for Slovenia 2012

According to the Commission services' 2012 spring forecast, Slovenia's economic activity is projected to further contract in 2012, by 1.4%, before rebounding in 2013. Unemployment is foreseen to continue rising.

No major structural reforms were taken in 2011. The latter part of the year was marked by early elections and the caretaker government took temporary measures. Slovenia lacked a fully-fledged budget for 2012 until mid-May, creating uncertainty, notably over the achievement of the 2012 deficit target. Following the early elections of December 2011, Slovenia is now in the condition to address the structural reforms it needs.

The challenges already identified last year remain relevant in 2012. Indeed, the intensification of market pressures lends new urgency to credible and durable fiscal consolidation, cleaning of bank balance sheets and pension reform. Failure to overcome the other challenges could hamper the economy's adjustment and return to growth. Notably, labour market segmentation remains high in Slovenia and skills mismatches are being observed, with risks of transitions from short-term to long term unemployment. The business environment is not attractive enough for businesses and investors. Finally, given current policy settings, renewed economic growth could reignite wage developments detrimental to competitiveness.

Overview of recommendations

1. Implement the 2012 budget, and reinforce the budgetary strategy for 2013 with sufficiently specified structural measures, standing ready to take additional measures so as to ensure a timely correction of the excessive deficit in a sustainable manner and the achievement of the structural adjustment effort specified in the Council recommendations under the Excessive Deficit Procedure. Thereafter, ensure an adequate structural adjustment effort to make sufficient progress towards an appropriate medium-term objective for the budgetary position, including meeting the expenditure benchmark. Strengthen the medium-term budgetary framework, including the expenditure rule, by making it more binding and transparent.
   More information on Slovenia's economy
2. Take urgent steps to ensure the long-term sustainability of the pension system, while preserving the adequacy of pensions, by (i) equalising the statutory retirement age for men and women; (ii) raising the statutory retirement age in line with increasing life expectancy; (iii) reducing early retirement possibilities; and (iv) reviewing the indexation system for pensions. Increase the employment rate of older workers also by further developing active labour market policies and lifelong learning measures.
   More information on pensions in the EU
3. Take the required steps to build sufficient capital buffers in the banking sector and strongly promote the cleaning of balance sheets so that appropriate lending to productive activities can resume. Obtain fully-fledged third party verification of systemically important banks' stress loan-loss estimates.
   More information on banking and the single market
4. Adjust employment protection legislation as regards permanent contracts in order to reduce labour market segmentation, in consultation with social partners and in accordance with national practices. Further tackle the parallel labour market caused by student work.
   More information on EU policy for labour market's flexibility and security
5. Improve the matching of skills with labour market demand, particularly of low-skilled workers and tertiary graduates, and continue reforms of vocational education and training.
   More information on the European strategic framework on education and training
6. Take further steps to strengthen market opening and speed up the reorganisation of professional services. Improve the business environment through (i) implementing the reform of the Competition Protection Office, (ii) establishing a framework for state-owned enterprises guaranteeing arms-length management and high standards of corporate governance and (iii) improving bankruptcy procedures, in particular in terms of timeliness and efficiency.
   More information on professional services
7. Following consultation with social partners and in accordance with national practice, ensure that wage growth, including minimum wage adaptation, supports competitiveness and job creation.
   More information on wage and unit labour costs

See how Slovenia compares with other EU Member States in key areas

European Semester Documents

National Reform Programme

All Member States have committed to the Europe 2020 strategy. However, each country has different economic circumstances and translates the overall EU objectives into national targets in its National Reform Programme – a document which presents the country's policies and measures to sustain growth and jobs and to reach the Europe 2020 targets. The National Reform Programme is presented in parallel with its Stability/Convergence Programme, which sets out the country's budgetary plans for the coming three or four years.

Macroeconomic indicators

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