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Slovenia needs reforms to reduce public debt - budget agency

Tue 26th May, 2015 4:48pm
By Marja Novak 
    LJUBLJANA, May 26 (Reuters) - Slovenia must reform its 
pension and health systems and cut the number of state agencies 
and funds to reduce the pressure of growing public debt on its 
finances, the head of the national budget-supervisory body said 
on Tuesday. 
    Slovenia was paying annual interest on its debt that was 
higher than the state's entire annual investment budget, Tomaz 
Vesel, the president of the Court of Audit, told Reuters. 
    The Court of Audit supervises public spending in Slovenia, 
which narrowly avoided an international bailout because of its 
debt-laden banks in 2013.  
    From this year to 2017, Slovenia will have to pay about 1 
billion euros a year in interest on its debt. That equals about 
13 percent of annual budget revenues, Vesel said. 
    The public debt rose to 30 billion euros, or 80.9 percent of 
GDP, in 2014 from 21.6 percent in 2008, as the export-oriented 
country was badly hit by the global crisis. The government also  
poured more than 3 billion euros of its own funds into local 
banks to rescue them in 2013. 
    The government expects debt to rise to some 81.6 percent of 
GDP this year, then fall from 2016 on. 
    "Budget spending on pensions has been growing over the past 
years, so the pension system is not sustainable and needs to be 
reformed as soon as possible," Vesel said. 
    "Another option would be to raise taxes, but we cannot 
afford that because it would worsen Slovenia competitiveness," 
he said. 
    Last year, Slovenia spent almost 5 billion euros on 
pensions, up from 3.5 billion euros a decade before, mainly 
because of its rapidly ageing population. 
    In 2013, the country enforced a pension reform that will 
gradually raise the retirement age to 65, from 59 now. The 
Organisation for Economic Cooperation and Development, however, 
said earlier in May that was not enough to make the system 
    Vesel said Slovenia should also cut the high number of state 
agencies and funds. It now has 23 agencies, which regulate 
securities markets and supervise insurers, oversee public data, 
regulate auditing, and supervise Slovenian film production, 
among other things. 
 (Reporting By Marja Novak; Editing by Zoran Radosavljevic and 
Larry King) 
 ((; +386-1-5058805; Reuters 
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