Key developments and challenges

The economy entered a second recession in 2011. As yet the fallout in terms of further increases in unemployment remains contained although estimates of loan delinquencies are rising.

The new government is committed to fiscal consolidation and has initiated pension reform and other expenditure measures. It has reached agreement on key changes with important trade unions, which should make parliamentary Acts less exposed to popular votes.

The government has signalled its support for the substantial Šoštanj Thermal Power Plant (TES). It has announced that it intends to provide a state guarantee for part of a loan.