Business News

Economy Minister Advocates Public Works, Against VAT Rise

Ljubljana, 05 April (STA) - Economic Development and Technology Minister Stanko Stepišnik emphasised the need to tackle the growing jobless figure as a means for dealing with the crisis, including by expanding public works. In the interview with the business daily Finance, he also announced he was opposed to an increase in value added tax.

The only way Slovenia can save itself is through job creation, as it has little room left for austerity, Stepišnik told Friday's edition of the paper.

"Even if it starts laying off public sector workers, this will also present a cost," Stepišnik said of the fact that this would increase the burden on unemployment benefits, which are paid out by the state.

Pointing out that Slovenia's national debt is still relatively low, he stressed that ways must be found to reduce the jobless rate.

One way of achieving this is to expand the scope of public works and to hire people currently on unemployment benefits in this programme.

He assessed that the arrival of the troika of lenders (EU, ECB and IMF) in Slovenia would represent a defeat for Slovenia. Should this happen, the government would have to resign.

"If this happens, we will lose several generations of young people, who will leave to find work elsewhere. I don't know if Slovenians deserve this, as we are a working people. And successful at that."

Stepišnik also spoke out against the proposal to increase the VAT rate as a means of consolidating public finances. If this proposal is put to the government, he will vote against.

He said it would make more sense to reach agreement with the public sector that pay exceeding EUR 1,500 per month be paid out in special one-year bonds.

Touching on the over-indebtedness of Slovenian companies, Stepišnik said that he proposes the creation of a special agency that would buy the loans of companies and in return obtain ownership stakes.

"The agency should buy up the loans of good-standing companies and in return get shares," Stepšnik explained his idea, saying that the agency would then sell the shares on the market.

But he said this model would not work for all companies, as those in serious trouble would likely need state aid. As an example of such a company, Stepišnik gave flag carrier Adria Airways.

He said that one important step for helping troubled companies is changing insolvency legislation, which would give a bigger say to creditors and enable the appointment of crisis administrations.

Asked about privatisation, Stepišnik said that he would sell telco Telekom Slovenije only under the condition that the buyer pledged to develop ultra-fast broadband network in parallel to the European network.

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