managing economic future: the future has already begun

Managing Economic Future: The future has already begun

The 2010 SEE Management Forum Bled-Kopaonik, 16 September 2010

International environment – key features

Source: SORS; OECD Economic Outlook, May 2010

2009 2010 2011

World GDP growth in % -0.9 4.6 4.5

- USA -2.4 3.2 3.2

- China 8.7 11.1 9.7

- EMU -4.1 1.2 1.8

• Germany -4.9 2.0 2.1

• Slovenia -7.8 1.4 2.4

World trade -11.0 10.6 8.4

Two-speed world recovery (Asia, USA: Europe)Rising risk of inflation, interest rates, commodity pricesSovereign debt crisis(New) sources of growth: innovation, green growth, trade

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Many challenges ahead for businesses

3

0% 10% 20% 30% 40%

Low economic growth potential

Public debt

Financial stability

Access, price and availability of energy and raw materials

Demography

Eff icient use of resources

Climate change

Source: Commission’s analysis of the contributions to the public consultation on Europe 2020, November 2009-February 2010. Nearly 300 business stakeholders replied.

Governments and markets after the crisis: finding a new balance

• Where do we stand with fair and measured regulatory reform to strengthen the global financial system? How to reduce the risks posed to taxpayers and to broader social objectives ?

• What is the respective role of markets and government to rebalance the world economy? What can improved co-ordination and better governance at the supra-national level achieve?

• How to restore the sustainability of public finances without running into persistently high unemployment? Do high levels of public debt impair growth prospects?

• How to match efficiency with fairness in modern welfare systems when public coffers are empty? What are the limits of market-driven growth to combat inequality, poverty and social exclusion?

Post-crisis economic challenges for governments

– Bringing public finance back to sustainable levels

– Bolster growth prospects and strengthen credibility of institutions

– Simultaneously tackle fiscal challenges and competitiveness problems

– Implementation of structural reform efforts– Improving economic governance

Improving EU Economic Governance

• Reinforcing the Stability and Growth Pact and budgetary discipline– Introduction of the European Semester as of 2011– Minimum requirements for national fiscal

frameworks– Strengthening the debt criterion– New or better enforced existing sanctions

• Surveillance of the macroeconomic imbalances in the EU based on a scoreboard

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Europe 2020: Seven Flagship Initiatives

Smart Growth Sustainable Growth

Inclusive Growth

Innovation« Innovation Union »

Climate, energy and mobility

« Resource efficient Europe »

Employment and skills

« An agenda for new skills and jobs »

Education« Youth on the 

move »

Competitiveness« An industrial policy for the 

globalisation era »

Fighting poverty« European platform against poverty »

Digital society« A digital agenda for 

Europe »

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Regional challenge: Danube Strategy Danube Strategy (EUSDR) - a framework for the

implementation of Europe 2020 goals on a macro-regional level (8 EU MS)

Enhanced co-operation of 14 countries of the Danube area in limited number of priority areas, based on existing financial and institutional resources

SEE Management Forum Bled-Kopaonik - a valuable contribution of the management sector to the

EUSDR implementation(to be included in the Action Plan)

Domestic challenge: Slovenian Exit Strategy 2010–2013

The Slovenian Exit Strategy Policy MixB.DEVELOPMENT

PRIORITIES:• SETTING PRIORITY

MEASURES AND PROJECTS TO ACHIEVE DEVELOPMENT

• ADJUSTMENTS OF THE

• COHESION POLICY

A.CONSOLIDATION OF PUBLIC FINANCES:• EXPENDITURE

FISCAL RULE• TARGET DEFICIT

AND PUBLIC DEBT

C.FINANCIAL

INSTRUMENTS FOR DEVELOPMENT:

• GUARANTEE SCHEMES

• COORDINATION OF FINANCING MECHANISMS

• DEALING WITH IMPAIRED ASSETS

D2.SOCIAL COHESION:• SOCIAL RIGHTS TO

PUBLIC FUNDS• SOCIAL

PROTECTION CASH BENEFITS

D1.FLEXICURITY ELEMENTS

ON THE LABOUR MARKET:

• A CEILING ON SOCIAL CONTRIBUTIONS

• ACTIVE EMPLOYMENT POLICY

• IMPROVEMENTS OF LABOUR RELATIONS

E1. INSTITUTIONAL ADJUSTMENTS:· CORPORATE

GOVERNANCE· FINANCIAL

SUPERVISION· PUBLIC SERVICES· COMPETITIONE2. STRUCTURAL

MEASURES:· PENSION SYSTEM· HEALTH SYSTEM· LONG-TERM CARE

Fiscal stability Goal: government deficit reduction below 3% GDP until 2013 Guiding principle: fiscal consolidation to be achieved by

adjusting expenditure and not by increasing taxes Fiscal rule: government expenditure linked to trend in growth

of GDP Program based budgeting: improving budgeting procedures National development priorities:

►creation of new jobs and development of knowledge ► promotion and setting up of innovative businesses

► improved employability - qualifications of individuals► development-oriented transport and energy infrastructure

Sources: SORS, APG-2004; Sambt 2009.

DEFICIT

SURPLUS

DEFICIT

AGE25 years

AGE 56 years

Aging-related challenge

31 years

Labour income

Total consumption

Age

Source: WEF Global Competitiveness Report, 2009.

Improving competitiveness

Source: World Bank: Doing Business, 2007-2010.

2007 2008 2009 2010

Starting a business (rank) 98 120 41 26

Procedures (number) 9 9 5 3

Time (days) 60 60 19 6

Cost (% of income per capita) 9.4 8.5 0.1 0

Min. capital (% of income per capita) 16.1 49.8 46.8 43.3

Construction permits (rank) 63 62 69 59

Procedures (number) 14 15 15 14

Time (days) 207 208 208 197

Cost (% of income per capita) 122 114 112.2 79.9

Employing workers (rank) 146 166 158 162

Difficulty of hiring index (0-100) 61 78 78 78

Rigidity of hours index (0-100) 60 60 60 53

Difficulty of redundancy index (0-100) 50 50 40 30

Rigidity of employment index (0-100) 57 63 59 54

Redundancy cost (0-100) 40 40 37 37

Doing Business-rankings of Slovenia

Simplifying the administrative procedures

Thank you for your attention.