A Council recommendation published on 22 June 2026 sets out detailed economic, social, employment, structural and budgetary policy guidance for Slovenia, including binding net expenditure growth limits and a series of structural reforms. The recommendation, to be adopted at the Council meeting on 24 June 2026, warns that insufficient corrective measures could lead to an excessive deficit procedure in autumn 2026.
Slovenia must respect maximum net expenditure growth rates of 5.6% in 2025, 4.4% in 2026, 4.1% in 2027, and 4.0% in 2028, with cumulative growth from the 2023 base year reaching 26.6% by 2028. The Council activated the national escape clause for Slovenia on 8 July 2025, allowing deviation from these rates to increase defence spending without endangering fiscal sustainability. Slovenia's general government deficit rose from 0.9% of GDP in 2024 to 2.5% in 2025, projected at 3.3% in 2026 and 3.5% in 2027; debt decreased from 66.4% to 65.7% over the same period, projected at 64.9% in 2026 and 65.1% in 2027. The Commission found the deficit criterion not fulfilled for 2026 but did not open an excessive deficit procedure at this stage, warning that insufficient corrective measures may lead to one in autumn 2026.
The recommendation calls on Slovenia to rebalance its tax mix away from labour taxation, which accounted for 52% of total tax revenues in 2023, by reviewing tax expenditures (5.2% of GDP) and adjusting property taxation. It also urges institutionalising regular spending reviews in social protection (17.1% of GDP), healthcare (8%), economic affairs (5.7%), and education (5.5%) to improve efficiency and targeting. On the business environment, the Council notes that 67% of companies report administrative complexity as a constraint and recommends simplifying procedures, reducing permitting timelines, and lowering regulatory barriers, especially for cross-border services and regulated professions. To boost competitiveness, Slovenia should strengthen skills, research and innovation, climate adaptation, water management, and local services under cohesion policy programmes.
Stakeholder impact The recommendation directly affects Slovenia's government, which must implement fiscal consolidation and structural reforms to avoid an excessive deficit procedure. Businesses, particularly SMEs, stand to benefit from reduced administrative burdens and faster permitting, but may face higher property taxes. Workers could see a shift in tax burden away from labour, potentially increasing net wages, while public sector efficiency gains may improve service delivery. The European Commission will monitor compliance and could trigger an excessive deficit procedure if corrective measures are not taken by autumn 2026.