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Govt Endorses Stability Programme

Ljubljana, 28 January (STA) - The government on Thursday endorsed the economic stability programme Slovenia is due to send to the European Commission by the end of the month, Finance Minister Franc Krizanic said. The stability programme envisages savings and a restrictive fiscal policy for the next four years to keep the budget deficit below 3% of GDP.

The government decided to reduce the budget deficit by savings but without employing major tax increases, Krizanic told the press after the government session.

The measures are adjusted to an expected 2.5% growth of GDP in 2011, 3.7% in 2012 and 3.5% in 2013.

In order for the budget deficit to drop to 2.9% of GDP by 2012 and then to 1.6% by 2013, the government expects less money to be paid out to public sector employees than if no measures had been introduced. It also expects lower intermediate consumption and the same amount of state investment, but with more EU funds.

The government plans to keep the social transfers flat, lower the income tax for people with lowest income, increase health insurance contributions from secondary income and go through with the pension reform.

Changes in tax rates should bring EUR 31m net more of income tax to the state budget, the government said, adding that gradual raises of excise duties on cigarettes should bring another EUR 45m in 2011, EUR 75m in 2012 and EUR 90m in 2013.

The government will moreover reduce the costs of the public administration and public services either by reducing the employees' benefits or by cutting the number of the employees, or both, Krizanic said.

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