WEBVTT 00:00:00.398 --> 00:00:04.005 Hello. During its 58th meeting, the government defined 00:00:04.126 --> 00:00:06.797 the breakdown of budgetary expenditures 00:00:06.938 --> 00:00:11.438 for the draft of changes to the 2024 national budget 00:00:11.598 --> 00:00:14.824 and the draft of the 2025 national budget. 00:00:14.965 --> 00:00:19.811 The government also approved changes to the Recovery and Resilience Plan. 00:00:19.971 --> 00:00:22.831 To present both of these topics in detail, 00:00:22.978 --> 00:00:26.504 here's Finance Minister Klemen Boštjančič. 00:00:26.651 --> 00:00:28.911 Thank you. 00:00:32.805 --> 00:00:34.798 Hello. 00:00:35.298 --> 00:00:39.557 The government is preparing budgetary documents 00:00:39.711 --> 00:00:43.251 for 2024 and 2025. 00:00:43.391 --> 00:00:47.511 Today, we approved a breakdown of expenditures 00:00:47.632 --> 00:00:50.198 by ministries or budget users. 00:00:50.331 --> 00:00:54.397 In 2024, the overall expenditures will amount to 00:00:54.531 --> 00:00:58.244 just more than €15.2 billion, while in 2025, 00:00:58.365 --> 00:01:00.565 they will amount to €15.9 billion. 00:01:00.698 --> 00:01:04.697 This way, the government is fulfilling three key priorities, 00:01:04.851 --> 00:01:08.731 to which is has committed itself in its coalition contract. 00:01:08.918 --> 00:01:13.657 This is, first of all, universal healthcare, 00:01:13.785 --> 00:01:18.417 which includes care for the aged through the Long-Term Care Act. 00:01:18.591 --> 00:01:22.858 Second, there's knowledge, not just the knowledge 00:01:23.018 --> 00:01:26.591 that is covered by education, but also digitalization 00:01:26.745 --> 00:01:31.558 and support for companies that create high-value jobs. 00:01:31.678 --> 00:01:34.204 The third priority is young people 00:01:34.351 --> 00:01:38.611 and associated policies. This includes housing, 00:01:38.738 --> 00:01:41.484 free lunches, and so forth. 00:01:41.631 --> 00:01:44.711 The government is also following fiscal rules, 00:01:44.832 --> 00:01:47.724 which will again come into effect next year. 00:01:47.871 --> 00:01:54.317 When preparing changes to the national budget for 2024 00:01:54.438 --> 00:01:57.158 and the national budget for 2025, 00:01:57.279 --> 00:02:01.691 the Finance Ministry considered the latest macroeconomic forecasts 00:02:01.845 --> 00:02:06.117 prepared by Institute of Macroeconomic Analysis 00:02:06.251 --> 00:02:09.278 and Development as part of its spring report, 00:02:09.431 --> 00:02:13.364 all the obligations of the state, and the fiscal rules. 00:02:13.485 --> 00:02:19.208 In 2024, the expenditures will be some €300 million lower 00:02:19.371 --> 00:02:23.178 than had been planned in the national budget for 2024, 00:02:23.299 --> 00:02:27.319 which was approved by the National Assembly in November 2022. 00:02:27.440 --> 00:02:30.712 This reduction is a part of the effort to reduce 00:02:30.833 --> 00:02:34.977 the public finance deficit to a level below the reference value 00:02:35.125 --> 00:02:39.004 of three percent of the GDP in 2024 00:02:39.151 --> 00:02:42.684 and the continued gradual reduction of the deficit 00:02:42.825 --> 00:02:46.304 over the next few years, as required by the diligent 00:02:46.425 --> 00:02:48.491 management of public finances. 00:02:48.638 --> 00:02:54.057 Despite the gentle decrease in expenditures for 2024, 00:02:54.165 --> 00:02:56.331 compared to the approved budget, 00:02:56.465 --> 00:03:00.531 the expenditures will remain on a very high level 00:03:00.638 --> 00:03:04.857 because they'll be about 10% higher than the realized 00:03:05.011 --> 00:03:10.136 amount in 2022 or about 50% higher 00:03:10.257 --> 00:03:13.617 compared to the pre-Covid level from 2019. 00:03:13.725 --> 00:03:18.578 Such a level allows us to address key development challenges 00:03:18.738 --> 00:03:21.877 and priorities in the years to come. 00:03:22.005 --> 00:03:26.451 It also ensures the rational use of public funds. 00:03:26.584 --> 00:03:29.064 In the case of investment projects, 00:03:29.198 --> 00:03:32.964 the use of EU cohesion funds and funds from the Recovery 00:03:33.085 --> 00:03:36.911 and Resilience Mechanism will be the key. 00:03:37.105 --> 00:03:41.931 By August 22, the ministries will prepare proposals 00:03:42.091 --> 00:03:44.791 of their financial plans, 00:03:44.957 --> 00:03:48.491 while the government will approve the budget documents 00:03:48.612 --> 00:03:52.971 and send them on to the National Assembly by the end of September. 00:03:53.138 --> 00:03:59.111 The final estimate of budgetary revenue will be known then, 00:03:59.271 --> 00:04:02.611 as will the planned deficit, because in September, 00:04:02.732 --> 00:04:06.538 IMAD will publish its fall macroeconomic forecast. 00:04:06.671 --> 00:04:10.457 The government is preparing its budgetary documents 00:04:10.638 --> 00:04:13.551 with an awareness that, in the years ahead, 00:04:13.672 --> 00:04:17.084 we'll once again need to manage budget funds wisely. 00:04:17.205 --> 00:04:20.631 As I have been mentioning for some time, the funding 00:04:20.785 --> 00:04:24.077 of all wishes in neither financially sustainable 00:04:24.258 --> 00:04:28.591 nor to the benefit of our country and its citizens. 00:04:30.045 --> 00:04:35.551 The second topic today was the Recovery and Resilience Plan. 00:04:35.718 --> 00:04:41.431 The government approved a change to the plan today. 00:04:41.558 --> 00:04:46.044 By the end of the week, the Office for Recovery and Resilience 00:04:46.165 --> 00:04:49.564 will send the proposal, with all the documentation, 00:04:49.738 --> 00:04:53.511 to Brussels for its formal coordination and confirmation. 00:04:53.632 --> 00:04:56.851 The final confirmation by European institutions 00:04:56.985 --> 00:04:59.111 is expected in the fall. 00:04:59.258 --> 00:05:02.637 The government has decided to change the proposal 00:05:02.825 --> 00:05:06.858 because of changed circumstances that affect the realization 00:05:07.005 --> 00:05:11.384 of the plan. This refers primarily to a reduction in direct grants 00:05:11.591 --> 00:05:14.364 from the Recovery and Resilience Mechanism 00:05:14.524 --> 00:05:18.051 because of greater development in 2020 and 2021, 00:05:18.204 --> 00:05:21.024 as well as inflation and additional funds 00:05:21.198 --> 00:05:25.124 for the realization of the REPower EU plan. 00:05:25.271 --> 00:05:28.277 With the proposed change, the government 00:05:28.405 --> 00:05:32.437 is not interfering with the basic concept of the plan. 00:05:32.585 --> 00:05:36.011 Instead, it's addressing newly emerged circumstances 00:05:36.145 --> 00:05:40.137 that are preventing the execution of reforms and investments 00:05:40.258 --> 00:05:44.077 as was foreseen when the plan was adopted in August 2021. 00:05:44.225 --> 00:05:47.437 As part of a new chapter in the REPower EU plan, 00:05:47.598 --> 00:05:52.137 for which Slovenia has an additional €122 million in funds available, 00:05:52.305 --> 00:05:55.331 we'll carry out two additional reform measures 00:05:55.452 --> 00:05:58.797 and four investments. As part of this framework, 00:05:59.005 --> 00:06:02.951 we're planning the realization of the Act on the Promotion 00:06:03.111 --> 00:06:06.537 of Devices for the Use of Renewable Energy Sources 00:06:06.664 --> 00:06:10.057 and the Act on Infrastructure for Alternative Fuels 00:06:10.178 --> 00:06:14.977 and the Promotion of the Transition to Alternative Fuels in Transport. 00:06:15.124 --> 00:06:21.144 We're also planning investments to revamp remote systems 00:06:21.318 --> 00:06:25.511 with new, renewable technologies, the efficient use of energy, 00:06:25.632 --> 00:06:28.257 and the decarbonization of the economy. 00:06:28.378 --> 00:06:31.984 There will also be investments into the electric power 00:06:32.105 --> 00:06:34.871 distribution network and infrastructure 00:06:34.992 --> 00:06:37.431 for alternative energy in transport. 00:06:37.578 --> 00:06:44.037 In the process of responding to a decline in direct grants, 00:06:44.198 --> 00:06:47.943 the government has made an effort to retain investment 00:06:48.064 --> 00:06:52.931 that would follow the very condensed planned timeline. 00:06:53.018 --> 00:06:55.671 Only this way can we make successful use 00:06:55.811 --> 00:06:58.211 of EU Recovery and Resilience funds. 00:06:58.332 --> 00:07:01.397 One of the key criteria used by the government 00:07:01.585 --> 00:07:06.184 to identify investments was time-based risk. 00:07:06.378 --> 00:07:09.617 All the investment as a part of the plan 00:07:09.798 --> 00:07:14.804 must be completed by mid-2026, when the state is required 00:07:14.925 --> 00:07:18.916 to provide the European Commission with the final claim 00:07:19.037 --> 00:07:22.451 from the Recovery and Resilience Mechanism. 00:07:22.558 --> 00:07:26.944 The key differences between the original and the final proposal 00:07:27.098 --> 00:07:31.684 in terms of the cut in direct grants are the following: 00:07:31.898 --> 00:07:37.071 After receiving assurances from the University of Ljubljana, 00:07:37.171 --> 00:07:42.657 or rather its Medical Faculty, that the Vrazov Square Campus 00:07:42.805 --> 00:07:46.044 is proceeding according to the planned timeline 00:07:46.238 --> 00:07:49.131 and can be carried out within the deadline, 00:07:49.252 --> 00:07:52.890 the government decided to keep it in the plan. 00:07:53.024 --> 00:07:56.131 We recommend to the European Commission 00:07:56.252 --> 00:08:00.004 that to realize the investment, it should provide funding 00:08:00.158 --> 00:08:03.351 in the amount of €40 million in direct grants, 00:08:03.472 --> 00:08:06.751 while we will provide the remaining €12 million 00:08:06.898 --> 00:08:09.584 from domestic sources. 00:08:10.125 --> 00:08:13.831 When the investment was confirmed, a part of the plan 00:08:13.952 --> 00:08:18.151 called for the building of a new clinic for infectious diseases 00:08:18.272 --> 00:08:22.671 in Maribor. The timeline for that project has been pushed back, 00:08:22.831 --> 00:08:27.751 and there's a substantial risk regarding its execution by mid-2026. 00:08:27.872 --> 00:08:31.964 Failing to meet the deadline of the investment 00:08:32.085 --> 00:08:36.751 could jeopardize the availability of EU Recovery and Resilience funds. 00:08:36.885 --> 00:08:39.537 After repeated deliberation, 00:08:39.631 --> 00:08:43.331 warnings from the Commission regarding this project, 00:08:43.451 --> 00:08:47.451 and estimates of the time-based risk of the investment, 00:08:47.618 --> 00:08:51.384 the government decided to carry out the project 00:08:51.565 --> 00:08:55.471 using domestic funds and its own, more realistic timeline. 00:08:55.592 --> 00:08:59.011 The project will therefore be excluded from the RRP. 00:08:59.191 --> 00:09:02.824 The final key change is the adjustment of the financial 00:09:02.991 --> 00:09:05.444 construction to carry out investments 00:09:05.584 --> 00:09:12.324 to reduce the risk of flooding and other climate-related disasters. 00:09:12.445 --> 00:09:16.237 This is one of our projects intended to combat flooding. 00:09:16.411 --> 00:09:21.104 In the original plan, the government planned to reduce direct funding 00:09:21.271 --> 00:09:24.537 by €10 million to €20 million. 00:09:24.704 --> 00:09:28.571 Based on subsequent information, the government estimates 00:09:28.764 --> 00:09:32.577 that the planned projects for flood prevention, 00:09:32.698 --> 00:09:36.504 which were planned to be financed through the loan portion 00:09:36.625 --> 00:09:39.298 of the Recovery and Resilience Mechanism, 00:09:39.419 --> 00:09:42.785 aren't being carried out according to the timeline. 00:09:42.918 --> 00:09:47.164 Because these are complex projects, in terms of both preparation 00:09:47.311 --> 00:09:51.311 and execution, the government will recommend to the European 00:09:51.432 --> 00:09:56.072 Commission that €120 million of direct grants be set aside 00:09:56.318 --> 00:10:01.991 for this project, and not €280 million as originally planned. 00:10:02.082 --> 00:10:07.781 The projects that won't be a part of the plan 00:10:08.221 --> 00:10:14.048 will be realised with our own funds and on our timeline. 00:10:14.792 --> 00:10:17.511 After we have taken into account the new facts, 00:10:17.631 --> 00:10:22.929 we predict to spend €2.16 billion to realise the plan, 00:10:23.049 --> 00:10:27.741 €1.49 billion of grants 00:10:27.861 --> 00:10:31.414 and €545 million of non-grants. 00:10:32.596 --> 00:10:37.397 We will also allocate €122 million of grants 00:10:37.517 --> 00:10:44.498 for REPowerEU measures. We want to prepare and coordinate reforms 00:10:44.618 --> 00:10:49.248 and get payments from the EU Commission faster 00:10:49.461 --> 00:10:54.185 which is why we suggest to move some goals 00:10:54.305 --> 00:11:00.732 from the first payments to the later ones. This delay 00:11:00.852 --> 00:11:07.397 doesn't mean we will lose funds, but the delay can affect 00:11:07.517 --> 00:11:10.548 how we apply for them. 00:11:11.003 --> 00:11:13.276 This can cause trouble 00:11:13.396 --> 00:11:18.481 with financing the already finished projects. 00:11:18.999 --> 00:11:23.048 If we don't get the money as planned, 00:11:23.168 --> 00:11:28.481 we will have to provide the funds from an integral source. 00:11:28.913 --> 00:11:31.281 We provided the legal basis for it. 00:11:31.909 --> 00:11:36.614 Independently from getting the money from Brussels, 00:11:36.805 --> 00:11:40.548 we are moving forward with projects without delay. 00:11:40.902 --> 00:11:46.417 The projects are being realised. Some have even been finished, 00:11:46.537 --> 00:11:50.947 for instance renovating the Ljubljana-Jesenice railway, 00:11:51.067 --> 00:11:57.355 the railway station in Grosuplje and apartments in Maribor. 00:11:57.475 --> 00:12:02.614 We are also building a new Veterinary Faculty. 00:12:03.929 --> 00:12:09.286 Thank you. There isn't anyone online, but journalists are here. 00:12:09.406 --> 00:12:13.567 Pop TV. Come in front of the microphone. 00:12:13.687 --> 00:12:20.518 Yes. Hello. Anže Božič, Pop TV. I want to know about the budget. 00:12:21.005 --> 00:12:25.571 You said you are returning to a stricter fiscal policy. 00:12:25.691 --> 00:12:30.504 Which ministry had to renounce the most funds 00:12:30.624 --> 00:12:37.582 and which got the most? Could you be more specific about the projects? 00:12:37.702 --> 00:12:44.448 Which are five biggest projects that were removed from the plan? 00:12:45.864 --> 00:12:51.348 We have similar talks about the budget every year 00:12:51.718 --> 00:12:55.181 with different parties. 00:12:55.660 --> 00:13:02.081 They are never completely satisfied with how we allocate the money. 00:13:03.068 --> 00:13:06.414 We said a couple of times 00:13:06.691 --> 00:13:13.681 that next year, the fiscal rules will apply again. 00:13:15.051 --> 00:13:21.758 During past three years, we had two crises 00:13:21.878 --> 00:13:26.554 in Slovenia as well as in Europe and we got used 00:13:26.674 --> 00:13:29.881 to having unlimited funds. 00:13:30.415 --> 00:13:37.317 This has never been the case, but in 2024 and 2025, 00:13:38.092 --> 00:13:43.268 we have to prepare a budget 00:13:43.388 --> 00:13:47.748 that will be sustainable. We did it. 00:13:48.782 --> 00:13:52.091 I don't want to expose any ministries 00:13:52.211 --> 00:13:55.881 because there are no winners and losers. 00:13:56.540 --> 00:13:59.903 If you want, they are all 00:14:00.023 --> 00:14:03.239 dissatisfied on one hand, 00:14:03.359 --> 00:14:06.814 but on the other hand, they understand the situation. 00:14:07.059 --> 00:14:11.240 We talked about it at government meetings 00:14:11.361 --> 00:14:15.781 and separately with every ministry. 00:14:16.534 --> 00:14:22.944 We were very concrete and reached an agreement in the end 00:14:23.064 --> 00:14:29.381 and unanimously confirmed the budget for 2024 and 2025. 00:14:29.540 --> 00:14:33.081 The other question was about the projects. 00:14:34.029 --> 00:14:38.423 We talked a lot about the projects in RRF. 00:14:38.543 --> 00:14:44.614 We were discussing them for quite some time. 00:14:44.734 --> 00:14:50.270 The projects we talked about the most 00:14:50.390 --> 00:14:56.414 are the ones I mentioned. Will we build a new Faculty of Medicine? 00:14:56.647 --> 00:15:00.291 With regard to the timeline, 00:15:00.564 --> 00:15:06.072 we very intently looked for those projects 00:15:06.400 --> 00:15:12.814 that are least likely to be completed by 2026. 00:15:13.165 --> 00:15:18.024 Within this context, we implented a significant change. 00:15:18.204 --> 00:15:23.769 The Faculty of Medicine project will be reincluded in the RRP, 00:15:23.890 --> 00:15:28.057 while the Clinic for Infectious Diseases in Maribor 00:15:28.178 --> 00:15:29.858 will be excluded. 00:15:30.038 --> 00:15:33.475 Of course, this does not mean that the government 00:15:33.596 --> 00:15:37.842 will not allocate funds for the Clinic. On the contrary. 00:15:38.025 --> 00:15:42.609 However, both the government and the European Commission 00:15:42.730 --> 00:15:47.676 believe that this project is so far from being realised, 00:15:48.080 --> 00:15:51.664 that doubts about it being completed on time 00:15:51.785 --> 00:15:55.952 are even greater than with the Faculty of Medicine. 00:15:56.119 --> 00:16:01.986 That is why we adopted this change in recent weeks. 00:16:04.080 --> 00:16:08.408 By the way, the Faculty of Medicine has explicitly guaranteed 00:16:08.529 --> 00:16:11.619 that the project will be concluded by 2026. 00:16:12.009 --> 00:16:14.427 Another broad set of projects 00:16:15.017 --> 00:16:19.381 that will not be financed from the RRP funds 00:16:19.611 --> 00:16:22.948 are flood-protection projects. 00:16:23.580 --> 00:16:28.690 Within this context, I daresay that 00:16:28.811 --> 00:16:32.048 during the preparation of the RRP 00:16:33.143 --> 00:16:37.447 there was a lot of excessive optimism. 00:16:37.932 --> 00:16:41.744 Certain local communities and municipalities 00:16:41.865 --> 00:16:46.260 were called upon to propose projects. 00:16:46.621 --> 00:16:53.481 Now, or even a while ago, it became clear 00:16:53.602 --> 00:16:58.961 that a number of these projects cannot be realised by 2026 00:16:59.082 --> 00:17:03.666 for similar reasons as other infrastructure projects. 00:17:03.929 --> 00:17:11.481 We also concretely addressed this in this RRP. 00:17:11.744 --> 00:17:14.296 Minister Brežan will expand on this 00:17:14.417 --> 00:17:17.123 at his press conference on Wednesday. 00:17:17.244 --> 00:17:19.039 The Ministry of Education 00:17:19.160 --> 00:17:23.296 will also have one on the topic of the Faculty of Medicine. 00:17:23.417 --> 00:17:26.906 Go ahead. -Another question regarding the budget. 00:17:27.027 --> 00:17:31.571 I know that it is not a competition, but these are facts and numbers, 00:17:31.692 --> 00:17:35.032 so, please, if you could be a little more specific, 00:17:35.153 --> 00:17:38.384 which ministries stand to lose and gain the most? 00:17:39.317 --> 00:17:43.497 As I said before, no ministry loses or gains the most, 00:17:43.618 --> 00:17:47.544 as the question is also compared to which budget? 00:17:47.665 --> 00:17:50.915 The budget of 2022, a very specific year 00:17:51.036 --> 00:17:55.196 because of the energy crisis and a number of Covid measures 00:17:55.317 --> 00:17:57.814 that are still being carried out. 00:17:57.935 --> 00:18:02.360 As I stated earlier, 00:18:02.705 --> 00:18:07.228 the government has been following three key priorities, 00:18:07.501 --> 00:18:12.492 which are healthcare, young people and knowledge. 00:18:12.976 --> 00:18:19.195 These three priorities are also reflected in the budget. 00:18:19.422 --> 00:18:21.756 Of course, when I say healthcare, 00:18:21.877 --> 00:18:26.461 I do not only mean the budget of the Ministry of Health. 00:18:26.672 --> 00:18:29.422 One part of the healthcare reserve 00:18:29.543 --> 00:18:33.127 is being planned by the Ministry of Finance, 00:18:33.248 --> 00:18:37.049 namely 330 million euros worth of measures, 00:18:37.893 --> 00:18:40.791 part of which are already known. 00:18:40.994 --> 00:18:43.713 Then there is long-term care, 00:18:43.834 --> 00:18:46.751 a much debated topic in recent weeks 00:18:46.872 --> 00:18:50.190 that we also associate with healthcare. 00:18:50.311 --> 00:18:54.181 It focuses mainly on care for the elderly, 00:18:54.302 --> 00:19:00.065 but it belongs in the same aforementioned set of priorities. 00:19:00.231 --> 00:19:02.550 There has also been much debate 00:19:02.671 --> 00:19:05.676 around young people and the housing policy 00:19:05.796 --> 00:19:08.525 and that we urgently need to accelerate 00:19:08.646 --> 00:19:11.800 the building of non-profit rental apartments. 00:19:11.982 --> 00:19:14.895 Regarding this, by the way, financing, 00:19:15.015 --> 00:19:19.015 meaning the recapitalisation of the Housing Fund, 00:19:19.136 --> 00:19:21.971 will be secured from the B account, 00:19:22.257 --> 00:19:26.053 so it is not part of the budget expenditure breakdown. 00:19:26.174 --> 00:19:31.873 We will allocate funds in line with the state of the projects. 00:19:31.994 --> 00:19:35.411 I hope that in the coming weeks and months 00:19:35.532 --> 00:19:39.032 the competent ministry and the Housing Fund 00:19:39.153 --> 00:19:43.070 will succeed in bringing the projects far enough 00:19:43.191 --> 00:19:46.275 for us to actually allocate the funds. 00:19:46.396 --> 00:19:50.467 Of course, the Ministry of Finance cannot secure funds 00:19:50.588 --> 00:19:55.186 if the projects' timelines and costs are not adequately defined. 00:19:55.546 --> 00:19:57.787 Thank you. Any other questions? 00:19:58.930 --> 00:20:02.347 No? Then we are done. Thank you, Minister, 00:20:02.475 --> 00:20:07.225 and thank you all for coming. Have a nice day. -Thank you.