Prime Minister Janez Janša at AmCham Business Breakfast: Without economic recovery, the future that awaits us looks bleak and lacks stability
This morning, Prime Minister Janez Janša attended the AmCham Business Breakfast, which was held in Union Hall at Grand Hotel Union in Ljubljana.
In talks with the Prime Minister, the participants discussed the strategic view on the economy and opportunities for development, key challenges and important reforms for Slovenia, and Slovenia and its role in the EU and upcoming Presidency of the Council of the EU. The talks also touched on transatlantic cooperation.
"At the moment, our goal – which is something that can be heard all over Europe – is to recover and increase resilience," said the Prime Minister at the outset, adding that it is important to recognise that Slovenia has made only gradual progress in terms of competitiveness in recent years and ranks below 30th place in global competitiveness rankings. "Based on our potential as a nation and as a country, however, we could do better without much difficulty," stressed the Prime Minister. He added that there was also great divide between the way businesses, i.e. the private sector, and the support environment have adapted to modern times in the thirty years of Slovenia’s independence. "As far as businesses are concerned, there was very little lag because companies in the global and European market had to survive during the economic crisis. The support environment, in contrast, fell behind significantly," said the Prime Minister, and continued: "This is my third term of office and the administration that we took over this past March is, unfortunately, the worst one on average thus far; even worse than the one we inherited as the Demos government. Why? Because a wage-levelling policy was in place in this area of state operation," said the Prime Minister, adding that the first government he led provided specific training for young people as part of the Presidency of the Council of the EU; however, these young people subsequently went abroad due to more favourable prospects. "Our first objective – when talking about strategy – is to reduce the gap, i.e. to make sure that the public sector is up with the times and can function as a support environment for business," stressed the Prime Minister, pointing out that the public sector employs competent people and people who work hard and do more than they are paid for "although most match their performance level to their salaries." Furthermore, he said that the advisory group examining the salary system met yesterday.
The Prime Minister commended Slovenian businesses for dealing with the coronavirus epidemic in the spring. "Slovenia is one of the few countries that did not drastically bring industry to a halt during the epidemic in the spring. Wherever it was possible to organise work in line with the new situation, work continued as usual and, as a result, the economic consequences of the epidemic in Slovenia are at least a couple of percentage points less severe than on average in Europe," said the Prime Minister. He pointed out that exports decreased only a few percentage points in the first six months and that exports account for a large part of GDP. "When we look at the epidemiological situation by sector, we see that the most organised sector was Slovenian industry," stressed the Prime Minister, adding that the majority of the service sector also organised itself well. "Of course, some sectors of the economy that were brought to a standstill, i.e. certain services and the events industry, were seriously affected and we are now addressing these problems separately," said the Prime Minister. Nevertheless, Prime Minister Janša believes that developments in the economy during the epidemic in the spring are a sign that Slovenia’s economy is healthy.
When asked about what we can expect in the autumn, the Prime Minister responded that "as we said in the spring, we will be able to survive without major restrictions in the autumn – until an effective cure and vaccine for everyone is found – if we are able to create and start using an app that alerts people as to infection risks. This app is still voluntary to use." According to the Prime Minister, a Europe-wide mandatory version of this application would function well and also allow for normal border crossings, "but it does not exist". "The EU has not been able to agree on such an application; there are too many obstacles concerning the protection of privacy, which is ridiculous because most of the applications we have on our smartphones collect more personal data than an app intended to protect against the coronavirus," he pointed out. "Many restrictions would not be necessary if everyone downloaded the app and consistently followed the measures," said the Prime Minister, whose answer to the question of why, in spite of the large number of infections, an epidemic has not been declared again was that the critical number is not the number of infected patients, but the number of occupied hospital beds. "The critical threshold is the Slovenian healthcare system’s capacities," said Prime Minister Janša, adding that matters are manageable at the moment. He also emphasised that Slovenia is "one of the first European countries to develop a model of future plans and measures, in view of current developments, which will improve predictability." He announced that the plans will soon be presented to the public.
The Prime Minister also said that it does not seem like the economic recovery will take years, as some have predicted. "The Slovenian and European economies are in much better shape than in 2009 or 2008. At that time the banks were also severely affected and a lot of taxpayer money was spent on bank rehabilitation, while this time the banks are working together to resolve the situation by deferring payments, by taking out credit due to their liquidity; measures are therefore taken not only by the state but also by the financial sector, which is why the situation is significantly more favourable," said the Prime Minister, adding that the good outcome of the EU summit in July, which resolved the situation of the European economy for at least this year, means that we can be optimistic for the future. "Slovenian businesses will certainly see opportunities in calls for European funding, but the greater problem is the support environment, which must be brought up to date with the times in which we live," added the Prime Minister, stressing that we must be able to retain our own talent at home and also attract foreign capital. He also said that, unfortunately, the social dialogue in Slovenia predominantly involves the voice of those who oppose change, which is stronger than the voice of those who are aware of the reality of the situation.
Regarding the drawing of European funds, Prime Minister Janša said that the Ministry of Economic Development and Technology is very inclined to collaborate with the business sector and stressed the importance of inviting businessmen to participate now that criteria and plans are being formed and developed. In his opinion, many opportunities could be missed without collaboration in this phase. "We talk about digital Europe and digitalisation, but in practice, European money has so far mainly been invested in building bicycle paths," said the Prime Minister. He added that there is certainly nothing wrong with that, but according to him, the majority of European funds should be invested in research and development, in improving the production of products in actual companies in terms of lowering costs and extending the scope of automation. According to the Prime Minister, the business sector should also be more closely linked to the scientific and research sector, which should be more involved in this aspect of society.
To the question of whether private partnerships could be formed for European projects, the Prime Minister responded that "practice shows that, if there is a direct interest, i.e. a private investor, a project is carried out more rationally and quickly, and achieves its purpose, while in the absence of such interest, as can be seen from the last two multiannual financial frameworks, many projects are only aimed at drawing European funds. I don’t think success lies in spending money or good graphics and statistics, but rather that we should strive for productively investing those funds, meaning that something comes out of them, and that is easier if there is a direct economic interest."
In terms of investing in shares, development projects and municipal and government bonds, the Prime Minister said that this is being discussed not only in Slovenia, but also in other European countries. "People saved more money during the coronavirus crisis, since there was less spending. But now we need to restore confidence in investing in government bonds and reassure people of the security of such investments," pointed out Prime Minister Janša.
The Prime Minister also touched on the demographic fund. "We are certainly not undertaking comprehensive pension scheme reform, because there is no time, but we will do many things to improve the state of the pension insurance fund and reduce the pressure on man-hours," said Prime Minister Janša. He described the demographic fund as a framework based on adequate measures and criteria that would prevent the loss of state property. "We have been discussing a demographic fund for 15 years, but this is the first time we have reached an agreement to simplify it, rationalise it and make it transparent, and an Act has also already been drafted," added the Prime Minister, underlining that with the current management of state property the state loses approximately EUR 50 million. "A great deal of money is lost precisely due to the fragmentation of state property," stressed the Prime Minister.
Speaking of foreign policy, the Prime Minister did not wish to "start a pointless discussion on what Core Europe is or isn’t, what the Visegrad Group is, or what the French-German train is. Slovenia’s goal is to preserve the European Union. What Europe needs now is stability after all the shocks it has experienced recently, such as Brexit, the coronavirus and discussions on a new treaty. Recovery and resilience must also be ensured at the European level. That is why as early as at the beginning of spring two priorities were already included in the programme of the German-Portuguese-Slovenian Presidency trio: developing a European strategic plan for protection against the pandemic and for defence against cyberattacks," said the Prime Minister, adding that it is in the interest of Slovenia that Europe is safe, continues to develop and remains within a framework that is favourable for our country, the framework of the Treaty of Lisbon.
Prime Minister Janša also spoke about the digital services tax. "This matter is more essential for Europe than has been discussed so far. All the IT titans are generating profits in Europe, which are then transferred to California. No individual country is capable of resolving and regulating this issue alone; we need the EU, we need a shared table where the EU and the US can discuss the matter. I believe that, in the coming years, we will remain living in a global world, but there will be new restrictions in areas that prove to be critical," said the Prime Minister.
"Good transatlantic relations are in the interest of both Europe and Slovenia," said Prime Minister Janša, adding that he considers the US to be an equally important factor as 30 years ago when Slovenia became an independent country. "Strategically speaking, Europe and the US constitute a certain whole in terms of values and the economy, at least concerning the key sectors, the field of artificial intelligence and everything we see as a digital and green future," he said, adding that, in many sectors, that represents an integrated whole, "and that fact will impact many relations in the future as well."
"Slovenia does not see itself in the middle of a conflict between Europe and the US and takes its NATO membership seriously, since history has already shown that Europe can, in a sense, count on the US in critical moments," said the Prime Minister. He also believes that Europe should stand on its own two feet as far as security in the neighbourhood is concerned. "We can’t expect that the US will solve the situation in Libya and the issue of illegal migration on European territory; this is a task for Europe to take on. I don’t suppose the US expects Europe to help it with its issues in the Pacific, since that is a task for it to solve on its own," said Prime Minister Janša.
The Prime Minister concluded by saying that every government he has run has always offered to work with the opposition. "We have never excluded anyone," he said. To the question of unity in Slovenia, which already existed 30 years ago, he responded that it is still present. "I’m certain we would agree on strategic issues. If we asked people whether they would like to live in an independent country or become EU or NATO members, I have no doubt about the voting results. However, if we asked them about the demographic fund, foreign investment or economic growth, I doubt they would share the same opinion," said Prime Minister Janša.