Business News

Businesses Fear Grey Economy Will Expand

Portoroz, 07 May (STA) - The grey economy in Slovenia is estimated at EUR 10bn (27% of GDP) by foreign researchers, but its share will probably grow due to the economic crisis, a conference organised by the Chamber of Crafts Industries and Small Business (OZS) was told on Friday.

In the neighbourhood the figure is worse only in Croatia (34% of GDP), whereas Italy (23%) and Hungary (24%) are better and Austria (9%) is a role model, Pavel Sedovnik, deputy secretary general of the OZS, said at the Days of Slovenian Craft and Small Business in Portoroz.

Slovenia is a fertile breeding ground as all factors which experts define as generators of the grey economy are present: poor tax policy, payment delinquency and a rigid labour market, he said.

According to Sedovnik, amendments to the prevention of illegal employment, which the government plans to adopt later this year, were just one of the necessary steps. Measures also have to be taken on the labour market and efforts made to curb payment delinquency.

Jozef Bradesko, a board member at the SID banka export and development bank, expects the grey economy to expand as taxes will almost certainly rise to pay off public debt. He said the biggest problem were "chains of delinquent payments", especially in construction and manufacturing.

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