In Slovenia, 2020 Is the New 1991

The outbreak of the coronavirus epidemic in Slovenia corresponded with a change in government. The first registered case in the country occurred on 4 March, just a few days before 13 March (meaningfully enough, a Friday) when the old, centrist government led by Marjan Šarec was replaced by a new administration led by Janez Janša (located somewhere between right-wing and far-right-wing). Slovenians were thus given the opportunity to observe two very different styles of coping with the crisis.

While Mr. Šarec left most of the decision-making to the Ministry of Health and the National Institute for Public Health, Janez Janša has done exactly the opposite. He immediately ousted the experts and took everything into his own hands. To prove that the new government was taking things seriously, he called in Mr. Jelko Kacin to serve as the spokesperson for the government during the epidemic. The choice was interesting because Kacin served as Minister of Information in 1991 during the ten days of Yugoslav People’s Army aggression against Slovenia—when Janša served as Defence Minister. Since then, the two men have mostly stood on opposing sides: Janez Janša led the conservative bloc, while Jelko Kacin was a prominent member of the liberal bloc. For a short period of time, he even served as president of the Liberal Democratic Party (LDS), the main centre-left party that ruled Slovenia during the transition. Janša is trying to make a simple point: namely, that Slovenia is not confronted with an epidemic: rather, the country is at war. Because it is at war, the population must  overcome political differences and stand together—as he did with his old frenemy, Kacin.

However, the main impression they are trying to make is, to quote Janša, “we are not in an epidemic, we are at war”. That has been the government’s core message since day one. At a late-night session establishing a “Crisis Headquarters”, the new government posed for journalists wearing masks. They explained their intention was to alert “citizens to take the crisis more seriously”, but for everyone concerned that Janša will try to copy-paste the Hungarian model of illiberal democracy, the message sounded more like “This is creepy, those guys are getting ready for a coup.”

Since then, Slovenians have heard messages such as “enjoy while you still can” (Kacin) or “the invisible hand of the market will be replaced by a visible hand of the state” (Janša). That should sound promising to socialists, but it can also be heard as a threat when stressed by an “illiberal democrat”. In just a few days the government imposed numerous extraordinary measures, [1] shutting down public transport, forbidding all public gathering of more than five people, closing all the bars and restaurants, and most notoriously, banning all unnecessary travel from one municipality to the other. Travel for work is allowed, but for visiting family the penalty is 400 euro. The state also tried to grant police authorities to the army. The government’s idea was to send the army to the Croatian border (because the virus, they say, is also transmitted by migrants, and “all risks have to be eliminated”) and use the border police domestically  to control “trespassing” across municipal borders.

Bailouts, but for Whom?

Its handling of the economic crisis is similarly warlike. The government’s first move was to adopt a law transferring all budgetary powers to the state. The Slovenian parliament has no say over the budget. until 1 September, all it gets is a monthly report from the Minister of Finance. Even that was demanded by the opposition, and was the only concession the administration was willing to give on that point. Consequently, the budget as adopted by the parliament de facto does not exist anymore. The government has complete freedom over its handling of public finance. The administration even tried to stop reporting financial transactions to the Commission for Prevention of Corruption (KPK), but stepped back due to the public backlash. However, currently there can be no serious democratic supervision over finance and there is a huge risk for misuse: the public fears that the government will abuse the crisis to starve the budgetary users it wants to get rid of, starve, or eliminate.

Other measures were much more modest in the preliminary package. The government froze all tax payments, permitted the self-employed to delay their taxes (but did not pardon them), and put all credits on freeze—initially only for legal persons, but under pressure from the opposition and the public, it was extended to physical persons. The opposition—and especially our party, Levica—sharply criticized that modesty. Government measures—confinement, lockdown—put a lot of people out of business, leaving many with no income, but the government was giving no sign that it was willing to help. Therefore, Levica’s first move along with the rest of opposition was to highlight the problems of workers, the self-employed, students, precarious workers, and other people who were losing their jobs, demanding crisis measures for them.

These suggestions were initially rejected, but under public pressure and with radical rescue packages being passed abroad, Janša’s government also set up a massive “anti-corona” package. Three are planned, but the first was already worth 3 billion euro—an incredible amount for Slovenia, whose GDP in 2019 was 45 billion euro. Fiscally speaking, it was the largest such package Slovenia has ever adopted. One could say that the “invisible hand of the market was replaced by the visible hand of the state”. The omnibus law (the package is one “mega-law” interfering with dozens of others) introduced various measures taking effect between 13 March and 31 May (and which will be extended, if needed). The most salient solutions are:

• The self-employed are excused from paying taxes and are (under certain conditions) entitled to a “basic income” of 700 euro per month.
• Workers whose jobs were shut down due to quarantine will receive 80 percent of their net salary for the time being, but not less than the minimum wage (700 euro).
• Retirees with pensions lower that 700 euro will get a one-time bonus, ranging from 130 to 270 euro (the smaller the pension, the higher the bonus).
• All people living off welfare benefits and all students residing in Slovenia will receive a one-time bonus worth 150 euro.
• People who work during the epidemics will be rewarded: in the public sector, administrators can give workers raises between 10 and 100 percent, and in the private sector each worker will receive an 200 additional euro per month.
• Firms will receive 200 million euro in non-refundable subsidises and a slew of tax cuts—they are excused from paying contributions to healthcare and pension funds until 31 May . 

Yet the law was riddled with deficiencies, prompting criticism from the opposition. Levica was the most active, filing 35 amendments, while the four opposition parties filed 70 amendments altogether. The main points of critique were:

• All self-employed, not only some, should be entitled to aid. Currently, the regulation is limited only to those who are 100-percent self-employed and able to prove that their business diminished compared to February. Those who had little or no income in February is simply excluded.
• That 150 euro of one-time help for students who must pay rent is a joke, as many students live in rental units (rent for a studio in Ljubljana is 400 euro per month) and many were put out of work. Bars, restaurants, tourism, and service sector were largely shut down. Since they are precarious, they cannot receive unemployment benefits.
• The lack of a rent freeze (or at least, control) could put many bars and restaurants out of business, as well as it cost many students and precarious workers their homes.
• Retirees are placed in a lottery (people with a pension of 699 euro will get an additional 130 euro, but those with 701 get nothing).
• Companies using subsidies to maintain jobs should be forbidden from firing people (there is no such provision now, one can use those subsidies but fire workers anyway).
• Subsidies for the private sector should not be non-refundable, but at least convertible to state shares if not returned after the crisis.
• A lot of people are left out: the unemployed, people without health insurance, asylum seekers, foreign students, etc.

The coalition rejected all 70 amendments. Only one was partly considered, but it is not connected to economy: namely, an expansion of police authorities was foreseen in the final clauses of the law (articles 103 and 104). Police could, under the pretext of better virus management, control the GPS location of people diagnosed with COVID-19. If the police suspected the patient was not at home, they could break in. Those provisions were sharply criticized as unconstitutional. Subsequently, the coalition removed the GPS option and mitigated police authorities.

More of the Same to Come

The government is planning two more “anti-COVID” packages to mitigate the economic shock and curb the loss of jobs. There will be one more during the epidemic—it is planned that the parliament will discuss it at the end of April and it will enter into force on 1 May. The government will probably consider some critiques of the last package, but there is also a rumour that it will use the crisis to pass labour market reforms. We have not yet seen the draft, however, so it is too early to say. The last package is planned after the crisis. Its goal will be to tackle the expected recession that could be worse than the recession of 1929.

The main fear in Slovenia is that Mr. Janša is really leading a war—but the goal is not to liberate the country from the virus, but from liberal democracy. The government is grossly abusing its authorities. He has already cut funds for NGOs working with precarious workers, refugees, or dealing with human trafficking. He has completely frozen the funds for film and book production, and announced that the cultural sector can expect deep budget cuts (the sector is still badly hurt from previous rounds of post-2008 austerity measures). Finally, the government is at constant war with media, the Prime Minister himself threatens the national broadcaster (RTV Slovenija) that “there is too many of them” and that “they are payed too well”, as they sent an international dispatch to the Council of Europe claiming that “most of the Slovenian media originates in the Communist regime” and that “even in late 1990s, editorial positions were packed with former members of the infamous secret police UDBA”.

The game for Mr Janša is thus, as Margaret Thatcher would say, “economics (or epidemics, in our case) are the method—the object is to change the soul”.

[1] A lot of restrictions were put in place already by the previous governments, between March 4 when the “patient zero” occurred and March 13 when govt. was replaced. They closed all public schools, locked dow