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Pahor and Krizanic Urge Restraint in Public Spending

Ljubljana, 11 October (STA) - PM Borut Pahor and Finance Minister Franc Krizanic presented the budgets for 2011 and 2012 in the National Assembly on Monday, saying that although the crisis is over, restraint in public spending is needed at this stage.

"These are documents for an immediate stabilisation of public finances and the creation of conditions that will allow a continuation of economic recovery," Pahor said, highlighting the strengthening of competitiveness and social cohesion as the government's main goals.

The proposed budgets envisage revenues of EUR 8.3bn and expenditure of around EUR 10bn for 2011 and revenues of EUR 8.7bn and expenditure of EUR 10.1bn for 2012, which means deficits of 4.5% and 3.6%, respectively.

Commenting on what he described as austerity budgets, Krizanic said that "we are sending a clear signal that we are a stable society which is capable of saving in a way that still keeps us socially connected and development oriented".

Pahor urged discipline in public spending, saying that penalties await Slovenia if it fails to bring the budget deficit below 3% of GDP until 2014.

The prime minister said that the consolidation of public finances would not be secured with higher taxes. "We will handle public money just as carefully as each of us tries to handle their own money," Pahor said, announcing cuts in all areas except for investments.

"In order to keep Slovenia a welfare state, our economy will have to be strengthened. We will have to secure greater competitiveness and our citizens provided with quality knowledge that will facilitate this," Krizanic said.

The pair defended the plan to freeze pensions, social transfers and salaries in the public sector in 2011 and 2012, with Krizanic saying that the idea was to limit pay growth temporarily and not scrap existing rights.

Pahor also said that this was a temporary measure based on legitimate grounds. Without these measures and structural reforms, the public debt will grow excessively in the coming years, he noted.

Meanwhile, reiterating theat social security remained the key priority for the incumbent government, Krizanic explained that EUR 2.5bn of the EUR 10.1bn available in 2011 has been earmarked for social transfers, a 21% increase on the pre-crisis year 2008.

Also up is spending for higher education, science, technology and IT (+45%), the job market (+100%), enterprise and competitiveness (+44%), as well as for education and sport, and transport and infrastructure.

MPs only got acquainted with the budgets today, with debates to follow in parliamentary committees this week.

The committees have until 21 October to file amendments, which need the final approval of the parliamentary Finance and Monetary Policy Committee. The committee will meet on 25 October.

The government will then have until 10 November to amend the budgets should it decide to include any of the amendments into account before sending the documents to the National Assembly for adoption.

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