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Parliament passes EUR 3 billion stimulus package

Ljubljana, 2 April - The National Assembly adopted on Thursday a EUR 3 billion stimulus package aiming to cushion the impact of coronavirus on Slovenia's economy and people. The bulk of the measures was also welcomed by the opposition, whose criticism about groups that remain neglected was met with assurances a new set of measures was already in the making.

Ljubljana
UKC Ljubljana, Slovenia's largest hospital, launched a dedicated emergency room entrance for injured persons who suspect they may have been infected with coronavirus.
Photo: Daniel Novakovič/STA

The coronavirus umbrella law brings financial assistance for companies and workers affected by the epidemic as well as for the self-employed, pensioners, students, large families and welfare recipients.

Key measures assisting companies include full state coverage of the 80% pay compensation for temporary redundant workers and for two months of the social contribution costs for those who remain employed. Financial and insurance companies are excluded from both measures.

Companies will moreover be relieved of corporate income tax for the duration of law and will be able to defer loan payments by 12 months, while the state will also chip in with loan guarantees.

Some of the assistance to companies is an upgrade of measures adopted in the first days of the epidemic, while the scheme has been expanded vastly to address the woes of the self-employed and vulnerable groups.

The law provides a two-monthly temporary basic income of EUR 350 and 700 for the former - the category also includes religious workers and farmers - and allowances for the later. Students will for instance get EUR 150 and pensioners with pensions of under EUR 700 between 130 and 300 euro. An extra EUR 150 will also be secured once to welfare recipients.

Moreover, pay bonuses of up to EUR 200 - partly financed by the state via contribution payment exemptions - are envisaged for workers in the private sector who are disproportionately exposed and are working overtime during the epidemic, while a 30% pay cut awaits holders of public office. On the other hand, bonuses of 10-100% of basic hourly pay are envisaged for those working harder in the public sector.

To the dismay of most opposition parties, the umbrella law also features an expansion of police powers, albeit without initial provisions that also included the option for police to track people in quarantine without a court warrant, create photo robots and enter apartments.

The new powers approved allow police to issue fines for violations of lockdown rules, to erect road blocks, temporary limit people's freedom of movement and access sensitive personal data.

Reflecting on the measures adopted, Prime Minister Janez Janša told MPs during the plenary debate that "you're watching the first part of a series".

The government is trying to provide a financial cushion to enable Slovenia to preserve its potential in people, economy, culture and science for after the epidemic.

Aware the bill is not perfect, the government is already working on a second package of measures, which will mostly address liquidity of the Slovenian economy.

The second package will also feature corrections to this bill, Janša said in response to those who have criticised it for overlooking some groups. "We've received many proposals, and many are justified."

He also announced package No. 3. "We'll also prepare a third package, in which you will have to set the exit strategy after the government takes a decision on the end of the epidemic."

These legislative efforts was hailed today by the coalition parties, which pointed to all the groups that will be helped while promising those not included would be tended to later.

Reflecting on the effects on public finances, Marko Pogačnik of the senior coalition Democrats (SDS), the party that had pushed hardest for Slovenia's strict honouring of the fiscal compact in the past, said a balanced budget was not important at this moment. "People's health, companies and jobs are much important," he said.

Finance Minister Andrej Šircelj explained the measures would be financed from the government budget, with reallocated cohesion funds, mechanisms of the ECB and other international institutions, while the government is also considering new borrowing.

Meanwhile, despite assurances additional measures would follow, the opposition Left's Luka Mesec made a point of listing those who he says have been left behind: students depending on student work, precarious workers, self-employed parents and tenants.

In what was a repeated reproach among the opposition parties, Mesec said all of the Left's amendment proposals had been ignored, including one that would commit companies to not eventuality lay off workers whose temporary unemployment allowance will get fully covered by the state.

The SocDems said the government had failed to incorporate the advice of companies, trade unions and NGOs, while the main criticism by the Alenka Bratušek Party (SAB) remained the rejection of its proposal to secure parliamentary oversight of what will be enormous allocations of state money within a short period.

The MPs of the Marjan Šarec List (LMŠ) do not understand why the coalition was not willing to perhaps give what are over 100 articles an extra day of deliberation.

Also, echoing another major reproach of most opposition parties, Marjan Šarec expressed puzzlement over why contentious additional police powers had been forced into an aid package dealing with the economy.

"We don't want this situation to be abused for alleged temporary solutions which, as we all know, can also become permanent," the former prime minister said.

The measures in the coronavirus umbrella law are valid from 13 March when the epidemic was declared in the country until the end of May, possibly a month longer.

The 90-member National Assembly adopted the law by 53 votes in favour. The only MP to vote against was Miha Kordiš of the Left, while fellow party members abstained. The Left announced a constitutional review of the articles expanding police powers, a move that the government hopes to prevent with changes to the referendums act.

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© STA, 2020