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The sustainability of public finances in Slovenia: medium- and long-term challenges

The sustainability of public finances in Slovenia: medium- and long-term challenges. Per Eckefeldt European Commission Ljubljana, 8 July 2014 The views expressed herein are those of the individual authors and do not necessarily reflect the views of the European Commission.

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The sustainability of public finances in Slovenia: medium- and long-term challenges

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  1. The sustainability of public finances in Slovenia: medium- and long-term challenges Per Eckefeldt European Commission Ljubljana, 8 July 2014 The views expressed herein are those of the individual authors and do not necessarily reflect the views of the European Commission.

  2. Short-term risk for fiscal crisis (S0 indicator and market perceptions) Slovenia 2009 2013 2

  3. Short-term risk for fiscal crisis (S0 indicator) • Risks markedly reduced since 2009 in the EA countries and SI High risk Low risk 3

  4. Gov’t debt prospects (1)SI and EA Stochastic debt projections: Rather stable baseline debt developments in SI while on a downward path in the EA, but with some uncertainty 4

  5. Gov’t debt prospects (2)SI and EA Deterministic debt projections: Risks much higher in both SI and the EA in the event of a return to the historically observed lower structural fiscal positions, and even more so in combination with historical interest (and growth) rates 5

  6. Gov’t debt prospects (3)SI and EA Deterministic debt projections: Risks relating to the fiscal starting point: necessary to sustain a primary surplus so as to keep gov’t debt levels in check in SI (in contrast with past experience) 6

  7. Gov’t debt prospects (4)SI and EA Sensitivity analysis: introducing shocks to the key assumptions underpinning the baseline debt projections 7

  8. Gov’t debt prospects (5)SI and EA Deterministic debt projections:policy scenarios Government debt very high in the SI and the EA, but: firstly, sticking to the EU fiscal rules (SGP); and, secondly, rigorously implementing the fiscal plans laid down in the 2014 SCPs would set it on a clear downward path (towards 60% of GDP) 8

  9. Fiscal sustainability gaps in the medium/long-term significant challenges in SI (1) 9

  10. Fiscal sustainability gaps in the medium/long-term significant challenges in SI (2) 10

  11. Thank you for your attention! 11

  12. Background slides

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