This presentation was made by Bojan Pogacar, Slovenia, at the 36th Annual Meeting of OECD Senior Budget Officials held in Rome on 11-12 June 2015

1. REPUBLIC OF SLOVENIA
MINISTRY OF FINANCE
11
Slovenia:
Role of fiscal councils and
independent fiscal institutions
June 2015
Bojan Pogačar

2. REPUBLIC OF SLOVENIA
MINISTRY OF FINANCE
2
Fiscal Council
1) Public Finance Act (June 2009) – establishment of Fiscal Council
2
• Fiscal Council as counseling institution of the government for independent
estimate on public finance policy and implementation of structural reforms.
• 7 members, 5 years mandate, elected by government on proposal of the
Finance minister
• Conditions for becoming a member, remunerations, financing of Fiscal Council
• Tasks of Fiscal Council: (i) ex-post view on sustainability and stability of public
finance policy, (ii) gives its view on compliance of public finance policy with
medium-term macro-fiscal framework, (iii) on efficiency of use of public
finance resources, (iv) on sustainability of fiscal policy with reference to the
ageing population,…

3. REPUBLIC OF SLOVENIA
MINISTRY OF FINANCE
3
Fiscal Council (cont.)
2) Rules of Procedures (February 2010)
3
• Organization and operative working arrangements of the Fiscal Council
3) Codex of Fiscal Council (February 2010)
• Behavior principles of members and staff of the Fiscal Council

4. REPUBLIC OF SLOVENIA
MINISTRY OF FINANCE
4
Fiscal Rule
Public Finance Law – regulation (July 2010)
4
g* = gtrend - u×(bt - b*) - v×(ft - f*)
• Gt+1 = Gt × (1 + g*).
Gt+1 expeditures for next year
Gt expeditures of the current year
gtrend arthmetical average of 7 years (Gt-3…Gt+3) of nominal growth rate of potential GDP
bt estimated consolidated debt of the general government for current year (% of GDP)
b* targeted consolidated debt of the general government (% of GDP)
ft estimated primary balance of the general government for current year (% of GDP)
f* targeted primary balance of the general government (% of GDP)
u „speed“ with which targeted consolidated debt of the general government should
be reached (between 0 and 1)
v „speed“ with which targeted primary balance of the general government should
be reached (between 0 and 1)
g* nominal growth of expeditures

5. REPUBLIC OF SLOVENIA
MINISTRY OF FINANCE
5
Constitution (May 2013)
Fiscal Rule
Budget‘s revenues and expenses have to be balanced or in surplus in
the medium-term without any borrowing.
In 6 months constitutional law which determines the manner and
timeframe for implementation of the fiscal rule has to be adopted .
Fiscal Council
Members of the Parliament‘s Constitutional Commission have
rejected inclusion of Fiscal Council into the constitution –
constitution is clear and by itself binds any government and
Parliament that they prepare and adopt budgets in accordance with
fiscal rule.

6. REPUBLIC OF SLOVENIA
MINISTRY OF FINANCE
6
Current Situation
6
• Fiscal Council not in function since April 2012
• Fiscal rule was never in function
• (New) fiscal rule (constitution) is waiting for
constitutional law
• Constitutional law is waiting to get 2/3 majority
Points of discussion/dispute:
o specific fiscal rule formula
o (new) Fiscal Council arrangements!

7. REPUBLIC OF SLOVENIA
MINISTRY OF FINANCE
7
The Influence of Fiscal Council
7
0,0
10,0
20,0
30,0
40,0
50,0
60,0
70,0
80,0
90,0
2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5
S. 13 TOTAL GENERAL GOVERNMENT DEBT
-16,0
-14,0
-12,0
-10,0
-8,0
-6,0
-4,0
-2,0
0,0
2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5
S. 13 GENERAL GOVERNMENT NET LENDING(+)/ NET BORROWING(-)

8. REPUBLIC OF SLOVENIA
MINISTRY OF FINANCE
8
The Influence of Fiscal Council (cont.)
8