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Government guarantees and guarantees by public sector entities

The State may issue guarantees for the liabilities of legal entities from the public or private sectors to promote development in various areas. Acts regulating guarantees prescribe the basic elements of a guarantee, which is governed by a guarantee contract and a guarantee agreement.

Granting government guarantees

Government guarantees for public sector entities are granted in particular for projects of general public interest. These include projects relating to public infrastructure development, energy development, export activities, environmental protection, new technical and technological development projects, health, and education. Government guarantees for private sector entities help businesses obtain funding for prospective programmes and assist companies in difficulty.

Government guarantees are granted pursuant to the Public Finance Act, while annual quotas for government guarantees are set each year by separate acts governing the implementation of the central government budget; the State may also grant guarantees outside this quota where provided for by law.

Government guarantees do not constitute real liabilities but only contingent liabilities on the part of the Republic of Slovenia. Real liabilities only become effective when the primary debtor to whom the guarantor is the State fails to comply with its obligations within the agreed time limit.

The outstanding of government guarantees declines between 2014 and 2018. In 2014 it amounted to EUR 8.3 billion or 22% of GDP, while in 2018 it amounted to EUR 5.8 billion or 12.7% of GDP.
The amount of issued government guarantees was in 2014 EUR 557.7 million, in 2015 EUR 295.1 million, in 2016 EUR 797.8 million, in 2017 EUR 810 million, while in 2018 no guarantees were issued.
The Republic of Slovenia receives commission from issued government guarantees: in 2014 EUR 22.4 million, in 2015 EUR 25.8 million, in 2016 EUR 18.8 million, in 2018 EUR 15.5 millions and in 2018 EUR 13.5 million.
In the reporting period, the Republic of Slovenia paid called guarantees: in 2014 EUR 432.2 million, in 2015 EUR 7.1 million, in 2016 and 2017 the amount was less than EUR 0.5 million, while in 2018 there were no payments. The amount of accts receivable declines between 2014 and 2018: from EUR 530.9 million in 2014 to EUR 59.8 million in 2018. The amount of recived repaids was in 2014 EUR 31.5 million, in 2015 EUR 44.9 million, in 2016 EUR 375.5 million, in 2017 EUR 3.4 million and in 2018 EUR 2.5 million.
Year (EUR million) 2014 2015 2016 2017 2018
Outstanding 8,275.7 7,059.1 6,812.9 6,254.9 5,830.5
Share in GDP 22.0% 18.2% 16.9% 14.6% 12.7%
Issued 557.7 295.1 797.8 810.0 0
Paid 432.2 7.1 0.1 0.5 0
Repaids 31.5 44.9 375.5 3.4 2.5
Commission 22.4 25.8 18.8 15.5 13.5
Accts receivable 530.9 468.5 70.7 64.7 59.8

Guarantees by public sector entities

A public sector entity referred to in Article 87 of the Public Finance Act may issue a guarantee to other legal entities, which then constitutes its contingent debt. If the issue of the guarantees is not a statutory activity of this legal entity, the prior approval of the Ministry of Finance and a prior positive opinion of the line ministry must be obtained before the guarantee is issued. The issuance of a guarantee shall be considered a liability and is included in the debt of the legal entities referred to in Article 87 of the Public Finance Act.

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