Golob expects up to EUR 1bn aid to be needed for business next year

Ljubljana – Prime Minister Robert Golob has told TV Slovenija in an interview the EUR 40 million package to help businesses cope with high energy prices is focused on this year when problems are still few, while next year up to one billion euro in aid will be needed.

Appearing on the late night news show Odmevi on Monday, Golob announced a meeting within two weeks where the government and business representatives would discuss the situation and potential solutions.

As the National Assembly is to decide on Tuesday on the government’s proposal to reduce VAT on energy from 22% to 9.5%, Golob dismissed the opposition’s proposal for an additional cut to 5% as unnecessary.

“We haven’t just reduced VAT, but have made the whole package, including freezing electricity and gas prices, to which we applied lower VAT […] The goal is for people to survive the winter at lower cost despite high prices,” he said.

The government would prefer using budget funds to reduce VAT on food if necessary than cutting VAT on energy further. “All VAT reduction measures are the most effective when accompanied by price regulation, or else part of the cut spills over into margins or is lost somewhere along the chain.”

Asked about aid for businesses, Golob cited analysis by the Chamber of Commerce and Industry showing that high prices would affect about 27% of the companies this year.

“Next year the cost-of-living crisis will impact on the whole economy, and if this year 40 million euro aid was needed, it could – and we expect to have the measures on the table by September – come up to a billion next year,” said Golob.

Ahead of the autumn EU summit in Prague, which is to discuss new sanctions on Russia, including an end of tourist visas for Russians, Golob said consultations were under way on Slovenia’s position.

“We’re still far from a decision, we’ll have discussion in the government and on the Foreign Policy Committee, only then will we take a decision,” he said.

He believes measures should be proportionate. “I believe we can help Ukraine in other ways and it’s right that we help Ukraine in other ways. Some of the measures that the European Commission took in the past have not necessarily had exactly the effect that we all wanted,” he added.

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