Govt allocates EUR 520m for flood relief in draft revised budget
Ljubljana, 10 August - The government adopted on Thursday a draft supplementary budget for this year to allocate EUR 520 million for flood relief measures. There will be no need for further borrowing, Finance Minister Klemen Boštjančič said.
The government went the extra mile to ensure the funds because it is aware of the importance and urgency of rapid aid, and will make sure that the funds are spent carefully, the minister said at a press conference after the government session.
This is the second time the government adjusted this year's budget, the first time being in the spring after the government was restructured at the end of January.
Following the extreme floods at the end of last week, several hundred million euros will also need to be secured for the 2024 budget, the government representatives said earlier.
The EUR 520 million will be allocated to a specific sub-programme which was opened by the Finance Ministry. "The new sub-programme will allow us to show transparently the implementation of crisis measures to deal with the consequences of natural disasters," Boštjančič said.
The EUR 300 million will be redistributed to the sub-programme from the financial asset management budget item, where funds are mainly earmarked for the recapitalisation of companies managed by Slovenian Sovereign Holding, the custodian of state assets.
In order to get the remaining EUR 220 million the government increased the budget expenditure.
The EUR 220 million will result in the somewhat higher deficit in 2023, Boštjančič said. Currently, the budget for 2023 is projected to have a deficit of EUR 2.9 billion, against a budget expenditure of EUR 16 billion. When it comes to a share in the country's GDP, the deficit will increase from 4.5% to 4.9%.
The EUR 300 million will probably not be spent this year but transferred to an extra-budgetary fund aimed at the flood recovery effort in the next years. The fund will be established by the end of the year, the minister said, and will pool funds from other sources as well, including donations.
Projects planned for this year will not be stopped under the revised budget, he said. The exception might be some investments, particularly in construction, he added.
Moreover, the government has no plans for now to raise the ceiling on total expenditure in the budgets for the next two years, which are currently being coordinated. "However, individual ministries will have to take into account the flooding situation and rearrange their priorities," the minister said.
Last weekend's floods devastated two-thirds of Slovenia and left in their wake enormous damage, which is expected to reach billions of euros. Slovenia will receive EUR 400 million from the EU Solidarity Fund, EUR 100 million this year and EUR 300 million in 2024, and the country also has other mechanisms at its disposal to ask for financial assistance.